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Run on Sun Monthly Newsletter

Vote No on Prop 23!

Generally speaking this Newsletter is not focused on electoral politics as that is really outside our area of expertise. But when a ballot measure is aimed squarely at the heart of the solar industry in California, we cannot afford to stand by and remain silent. Proposition 23 on tomorrow's ballot would suspend California's program - known as AB 32 - to force large-scale emitters of green house gases to reduce their emissions. One of the best ways to do that is to install solar power systems to create offsets against other sources of emissions. (A similar trading mechanism is what allowed the United States to effectively deal with its acid-rain problem years ago.) Prop 23 is supported almost entirely by out-of-state oil companies, particularly Valero and Tesoro, who have spewed millions of dollars in a deceptive ad campaign to roll-back California's efforts to promote a cleaner energy economy.

From a purely corporatist perspective, Valero and Tesoro have a point. After all, spending a few million dollars on deceptive political ads - surely no one really believes for an instant that their opposition to AB 32 is out of concern for the potential loss of jobs in California? - is chump change compared to what they would need to spend to bring their heavily polluting refineries into compliance with the law.

Yet not all of their shareholders agree that putting profits before the environment is a good, long-term strategy, and the Los Angeles Times reported recently that Valero's political activities in support of Prop 23 have drawn fire from some leading investors.

Those investors understand that clean energy is a necessity and that California's economy stands to profit greatly from investments in renewables - investments that will go elsewhere if AB 32 is suspended:

'If Prop. 23 passes, it would be a considerable setback for renewable energy investment in the U.S.,' said Mayura Hooper, a spokesman for Deutsche Asset Management. 'Investors require consistent and long-term policies, and if a leader like California suspends its regulatory framework for climate change, there is a high risk that other states will follow.'

Of course, what the hi-tech investors fear - that if California falls back, so will others - is just what the fossil fuel industry is hoping will occur.  But they aren't just hoping - they are pouring their shareholders' money into the fray.

To which we can only say in response, Vote No on Prop 23!

Rebates are Falling - Is a Feed-in Tariff a Better Answer?

Last month we reported on the chaos in the Glendale solar program with residential rebates being suspended until next July and commercial rebates being suspended for five years! Unfortunately, we have since learned that both LADWP and PWP are poised to scale back their rebates in dramatic fashion.

Rebate Reductions at LADWP

The Los Angeles Department of Water and Power is seeking Board approval of a Resolution that would slash the amount it pays in rebates to solar power customers by some 21% effective January 1, 2011. Although the new Guidelines are dated November 1, 2010, the program has not yet been adopted. There will be a Board Hearing to adopt the new Guidelines on November 2, 2010 and if approved then, they will take effect January 1, 2011.
Applications received prior to January 1, 2011 will qualify for the current rebate rates.

Hearing location, date and time:

BOARD OF WATER AND POWER COMMISSIONERS
DEPARTMENT OF WATER AND POWER 
Room 1555-H, 111 North Hope Street,
Los Angeles, CA 90012
November 2, 2010 at 10:00 a.m.

If approved, for a typical 4kW residential solar power system, the rebate would decline from the present level of $14,256 to $11,200 a drop of $3,056. As DWP moves through the various steps of its planned program, the cuts get deeper, exceeding a $6,000 rebate decline for a 4kW system as the program moves into Step 8 (it is presently in Step 4).

Please note: Rebates already reserved are unaffected by the program changes.

The report in support of the resolution makes clear that to a large degree LADWP is a victim of its own success. For example, the following interesting facts can be found in the report:

• As of September, the program has paid out more than $100 million to customers for solar rebates.
• LADWP has online 21.9MW of customer installed solar capacity which generates 36,100,000 kWh per year - enough to power 10,000 homes.
• In 2009, during the depths of the worst recession since the Great Depression, 1,200 applications were received for solar rebates, leading to the installation of 4.8MW of solar power systems by LADWP customers.
• LADWP is on pace to receive approximately 1,800 solar rebate applications this year.

It should also be noted that even after these cuts, the rebates from LADWP will exceed those offered by SCE (through the California Solar Initiative program) and far exceed those presently offered by the other two investor-owned utilities, PG&E and SDG&E.

Still, the higher rebates from LADWP helped to take the sting out of dealing with a program that can only be described as byzantine in its complexity. Apparently proud of that complexity, DWP has published a solar rebate flowchart that should never be viewed by children, or anyone else who isn't being paid to deal with its numerous twists and turns. According to DWP's flowchart, the rebate process takes, on average, 5 to 9 months!

The change to the rebate rate also offers some changes to the rebate process, notably adopting the same calculation method and online application tool (PowerClerk), that is used with the CSI program.  We can only hope that this will allow DWP to cuts its timelines dramatically and make the rebate process, which will no longer be so lucrative, at least easier, for its customers.

Rebates Falling at PWP

Meanwhile, we have learned that Pasadena Water & Power (PWP) will be reducing their solar power rebates for residential customers from the present $2.40/Watt to $2.00/Watt as of February 1, 2011. Presumably PWP's rebate rates for all other categories of rebates will also be reduced, but we do not have those details at this time. There had been a rumor that the rebates were going to drop as of December 1, but our sources indicate that is not accurate.

We are being told that the goal of the reduction is to allow more customers to share in a necessarily limited pool of rebate resources.

Feed-in Tariffs to the Rescue?

While rebates are falling, there is another approach to making solar affordable that is starting to gain some traction in the United States. According to a recent Los Angeles Times story on the push to bring the economic sanity of feed-in tariffs to the United States for individual solar installations:

A July study by UC Berkeley researchers estimated that a feed-in tariff program could create 28,000 clean-tech jobs each year for a decade, as well as generate more than $2 billion in tax revenue and pump more than $50 billion in new private investment to the state.

That is 280,000 clean-tech jobs over the next ten years in California from one enlightened policy alone. Rolling the program out across the country would produce even more clean-tech jobs and even more economic development.  Germany has done this for years - which explains why they have four times as much installed solar as the US, even though they get a fraction of the sunlight we get and are one-twentieth our size.  So what is the holdup?

Sadly, but not surprisingly, the utilities - particularly LADWP - seem to be dragging their feet, saying "the Devil is in the details," that the process is "much more complicated than anyone acknowledges,"  and that we need to proceed in a "sober" fashion.

Seriously?  Come on, folks, we already interconnect small solar installations to the grid and net meter those systems.  A feed-in tariff like the one in Germany would simply require the utility to pay for every kilowatt hour generated at a premium price.  How hard is that?  Given a set price for an extended period - typically 20 years - would give homeowners and business owners alike the economic certainty to make the US the world leader in installed solar.

At least one city seems to get it.  Again from the article:

A feed-in tariff program is particularly appealing to residents of Palm Desert. For many homeowners there, the highest expense after the mortgage payment is the power bill, which often hits $1,000 a month.

If homeowners and businesses could easily earn back the cost of solar panels, demand would skyrocket and clean-tech development companies would flock to Palm Desert, said [Jim] Ferguson, the mayor pro tem.

"Solar isn't a luxury for us — it's a lifeline," he said.

We couldn't agree more!

Solar Power to Return to the White House

President Obama and Energy Secretary Chu announced today that solar power - both in the form of solar electricity and solar hot water - will be returning to the White House after a long absence. First installed during the Carter Administration - but subsequently removed when Ronald Reagan became President - this new installation of solar power "reflects President Obama's strong commitment to U.S. leadership in solar energy and the jobs it will create here at home," said Secretary Chu. "Deploying solar energy technologies across the country will help America lead the global economy for years to come."

The Solar Industry - which had been pressing hard for President Obama to take this step - reacted with excitement to the news:

“Putting solar on the roof of the nation’s most important home is a powerful symbol calling on all Americans to rethink how we create energy," said Rhone Resch, President of the Solar Energy Industry Association. "It’s an example of how each one of us can improve energy security, employ Americans and cut energy costs. I can speak from personal experience that taxpayers will benefit. In the four years since I’ve had solar on my house, I’ve gotten a better return on my solar system than on my 401(k).”