Categories: "Solar Economics"

07/22/20

  02:36:00 am, by Jim Jenal - Founder & CEO   , 407 words  
Categories: All About Solar Power, Solar Tax Incentives

How do you spell Relief: S O L A R!

United States Capitol buildingAs Congress tries to come to consensus on another stimulus package, we are focused on something that could help rebuild the economy in a greener way.  Here’s our take, and a call to action!

Congress is now back in session, and task number one is to come up with a new round of stimulus spending to try and get the economy moving again, amidst the chaos of the worst pandemic in a century.  This is a big crisis, and it calls for big and bold solutions.

Our friends over at Solar Rights Alliance are good at thinking up big ideas, and they are johnny-on-the-spot now.  Here are a couple of key concepts that should be included in the next stimulus bill:

  • Extend the federal solar tax credit - presently the federal solar investment tax credit (ITC) is set to step down from 26% to 22% at the end of this year, and expire altogether after 2022.  The ITC should be extended at the prior 30% rate through 2025.  This is vitally important as utility-sponsored rebates have disappeared in many areas, leaving the ITC as the primary economic incentive.

  • Turn the ITC into a direct cash payment for at least the next twelve months.  While tax credits are great, if you aren’t working, you can’t use a tax credit.  Direct cash payments upon completion of the project would help close the liquidity gap that would otherwise keep projects from going forward.

These two simple steps would help restart the solar industry, resulting in thousands of good paying, can’t-be-outsourced jobs for workers across this country.  Moreover, home and business owners would lower their energy costs, leaving them with more money in their pocket to spend in their communities.  And on top of all that, we would be helping to green the grid, lowering greenhouse gas emissions - a necessary step in the battle to reverse climate change.

Sounds pretty good, right?  Damn straight!  But in this time of crisis, silent approval isn’t enough - action is required!

Fortunately we can make that action really easy.  Just click on that big, Take Action! button below and you will be redirected to a website where you can send an email to your U.S. Senators and Representative, urging them to take action to grow solar and jobs in the next stimulus.  It takes all of one minute to do it, but the benefit could be felt for years.  So what are you waiting for?  Mash that button now!

 TAKE ACTION!
 Permalink

05/19/20

  01:57:00 am, by Jim Jenal - Founder & CEO   , 424 words  
Categories: Solar Economics, SCE

SCE Hikes Rates 6%

Talk about tone deaf - just as folks are stuck at home, sheltering in place, SCE jacked its rates roughly 6% across the board, because, you know, folks can so much more easily afford a rate hike while people are losing their jobs!  Here’s our (can you say outraged) take…

As of April 13, with little to no fanfare, SCE’s latest rate increase went into effect.  While different rates vary by somewhat different amounts, the overall average of 6.7% is expected to provide SCE with an additional $478 million dollars in revenue.  How nice.

The rate increase is not new; it is part of the CPUC-approved General Rate Case that was adopted in 2018 and covers rates for three years.  Nevertheless, at a time when other utilities, like PWP, are working hard to support their customers during a disastrous financial time, SCE’s willingness to press ahead with the rate increase is baffling, at best.

Using our regular proposal tool - Energy Toolbase - we decided to look at the results for three actual clients: a small usage client, a medium or really typical client, and then a very large usage client to see how the percentages played out.  Here are our results:

SCE rate increase

SCE’s Rate Increase - Click for Larger

The small user, with a total annual usage of 6,093 kWh (16.7 kWh/day) still has an annual bill on the tiered, Domestic rate plan of $1,267 and will experience a 6.24% increase or an extra $79 out of pocket.  Our medium user consumes nearly twice as much annual energy, 11,814 kWh (32.4 kWh/day), but because of the higher costs in the upper tiers of the Domestic rate plan, their bill is more than double.  After the 6.24% increase, the medium user is spending an extra $166.  Our large user - and this is not our largest residential client! - consumes 32,488 kWh (89.0 kWh/day), and has a bill to match, roughly four-times that of the medium user due to essentially living in the top tier of the rate structure.  After a 6.26% increase, they will be spending an extra $633!

We also looked at the same users switched over to a Time-of-Use rate (here, the 4-9 p.m. peak rate structure) and ran the numbers again.  One thing that leaps right out at you is that very large users will do much better on a TOU rate generally since otherwise almost all of their usage is billed in the top tier.  The percentage rate increases under the TOU rate are slightly smaller, with the small user paying an extra  $76, the medium user $160, and the large user $507.

Not exactly the sort of relief that ratepayers need at this time of unprecedented uncertainty.

04/23/20

  06:41:00 am, by Jim Jenal - Founder & CEO   , 725 words  
Categories: All About Solar Power, Solar Economics, Commercial Solar, Residential Solar, Ranting, Non-profit solar

While You Were Sleeping: Will FERC Preempt States' Ability to Regulate Solar?

For the most part, the regulation of the solar industry - particularly the residential and commercial solar industry - is a function of state regulators.  In California, both the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) have been the major players in shaping the policies that govern solar installations, including policies like Net Energy Metering (NEM) which determines the economic value of going solar.  But now, a petition from the other side of the country could change all of that, and force states to turn control over the solar industry to federal regulators.  Here’s our take…

FERC logo

The Federal Energy Regulatory Commission (FERC) is ”an independent agency that regulates the interstate transmission of electricity, natural gas, and oil.” Well, wait a second, what does rooftop solar have to do with the “interstate transmission of electricity"?  At first blush, certainly nothing - the excess power from your home solar might go to power your neighbor’s house, but it certainly isn’t crossing state lines. (As a recovering lawyer I could go into a lengthy discussion of the Constitution’s Commerce clause and how that has been broadly interpreted to cover an amazing array of things that seem local, but are actually interstate commerce - but I will spare you that discussion!)  

The hook here is in the greater detail of what the FERC does: “Regulates the transmission and wholesale sales of electricity in interstate commerce."  Under NEM rules, excess energy put out onto the utility’s grid by a “behind-the-meter” solar system, i.e., all grid-tied residential and commercial PV systems,  is then resold by the utility to its other customers.  A petition to the FERC filed by the New England Ratepayers Association is asking FERC to find that those sales are under the exclusive jurisdiction of the FERC.  From the petition:

The law is incontrovertible. The [Federal Power Act] draws a bright line between state and federal jurisdiction over energy sales. Sales of energy at wholesale are subject to the exclusive jurisdiction of this Commission. Sales of energy at retail are subject to the jurisdiction of the states. The sales at issue in this Petition are wholesale sales because the energy is being sold to the utility for resale to the utility’s retail load…  and therefore the Commission is required to exercise its rate jurisdiction over them. [Emphasis added.]

Wow!  Now that is interesting - energy exported to the grid, for which the PV owner is paid retail rates (or closer there to), and which the customer down the wire pays full retail rates, is somehow transmogrified into a wholesale energy sale!

But what is the point of all this?  Simple - if these are wholesale energy sales, then FERC has sole regulatory control, and pro-solar policies such as NEM would be replaced by, at best, compensation for excess energy exported at the wholesale rate.  Never mind that SCE is charging you anywhere from 19¢ to 40¢, you are only going to be compensated at the 2-6¢ rate!

Much of the “logic” behind the petition argument will be familiar to readers of this blog: rooftop solar is economically inefficient, NEM distorts wholesale energy markets, and imposes unfair burdens on ratepayers without solar.  Nevermind that all of these points have been debunked before (their expert calls those debunking efforts “irrelevant"), what is important to note is that while many of us are locked out and hunkered down during this crisis, are opponents are not.  They are hard at work, hiring top-dollar DC lawyers to press the case while the rest of us are just trying to get through the month.

Make no mistake about it - if this petition is successful, it will be the end of NEM as we know it, and not just in New England, but nationwide!

This is where organizations like CALSSA(for solar installers here in CA) and the Solar Rights Alliance (for solar system owners) are so critical.  If you are a solar installer, or run a solar company and you are not a CALSSA member, shame on you.  Join!  If you have a solar installation on your roof and you don’t belong to the Solar Rights Alliance - wake up!  Join!

NERA’s petition was filed on April 14th and under the fast track rules that NERA requested (and paid a $30,000 filing fee to secure), comments are due by mid-May.   We will update you when we learn more about its progress.  Watch this space.

03/13/20

  07:39:00 am, by Jim Jenal - Founder & CEO   , 436 words  
Categories: All About Solar Power, Solar Economics, Residential Solar, Ranting

Stock Market Scary? Time to Invest in Solar!

The other day we had a potential client postpone a meeting to discuss our proposal for their home due to “market instability."  To say that the market has been unstable is a major understatement, but that got us wondering: in uncertain times, doesn’t investing in solar make sense?  We sure think so - hear me out…

Unstable Times

Market crashing

Instability? Oh yeah!

The worldwide pandemic caused by the novel coronavirus (COVID-19) has induced travel bans, the cancellation of sporting events (MLB, NBA, March Madness, even NASCAR!) and social events (for once the show isn’t going on on Broadway!), and possibly even postponing some Presidential primaries, combined with a sudden drop in oil prices due to feuding between Saudi Arabia and Russian, has done a serious number on the stock market.  In the past 30 days, the Dow Jones has lost 21% of its value (and it would have been far worse but for a close of the week rally).

Instability indeed!

It is certainly reasonable for any investor to be concerned by such numbers, especially when a wild card - like a global pandemic - is the driving factor.  Hard to plan for such an event, yet it can have enormous impact on the economy, at least in the short term.

The Stability of Solar

But now consider what makes installing solar on your home or business such an attractive investment.  Modern equipment, like Enphase microinverters and LG solar panels, come with 25-year warranties, providing peace of mind. And no matter what happens – short of the zombie apocalypse – you are going to continue to need electricity to power your life, and that need is likely to only increase over time (think of your electricity usage twenty years ago compared to today).  Electric utilities, especially the Investor-Owned Utilities like SCE, clearly do not have your personal best interests at heart, and their rates will continue to increase, even as service declines.

Which means that installing solar provides you with a reliable asset that will reduce your out-of-pocket costs for the next 20 years!  We typically see payback periods that range from 5 to 10 years, with a 20 year ROI of 150%+ and IRR of 12-20% (though our largest residential client in SCE territory is looking at an eye-popping ROI of 460% and an IRR of 28%!).

Of course, your mileage may vary.  But it is hard to imagine a scenario where the value of your solar investment drops 21% in a matter of days - but easy to do so for your 401k - because it just did!

If you would like to diversify your portfolio into a less risky investment, give us a call.  We can help you trade up to solar!

04/19/19

  06:53:00 pm, by Jim Jenal - Founder & CEO   , 398 words  
Categories: All About Solar Power, Solar Economics, Residential Solar

Zillow Report: Solar Boosts Home Prices by 4.1%

The folks over at Zillow are out with a study of sale prices for homes with a solar PV system compared to those without and the results are pretty dramatic.  Nationwide, homes with a solar PV system sold on average for 4.1% more than those without.  Let’s take a look at their numbers and see what that might mean for a solar installation in the Run on Sun service area…

Let’s start with the data (always a good place to start!)…

home sale prices with PV

(Data from Zillow, Inc., graph by Run on Sun.)

The graph plots the increase in home price as both a percentage (the blue bars) and total dollars (the gold line).  New York city has the highest percentage increase (5.4%), while San Francisco, because of its sky high home values, has the highest dollar increase, a whopping $41,658!  To derive these numbers, the folks at Zillow analyzed homes “listed for sale and sold from March 1, 2018 to February 28, 2019, controlling for observable attributes of the homes, including bedrooms, bathrooms, square footage, age of the home and location."  In other words, these are the very latest data possible, compiled by people who understand real estate prices!

Good looking solarOf course, Run on Sun doesn’t operate in San Francisco, let alone New York, so what does the data say for our neighborhood?  Overall, Los Angeles percentagewise lags the U.S. average - 3.6% compared to 4.1% - but because our home prices are much higher than the national average, the dollar amount is still dramatic: $23,295!  The Zillow analysis does not say how large the solar power systems were on average, but the increase in Los Angeles sales prices is more than enough to cover the cost of installing an average sized system.  

Doing the math, the Zillow study is showing an average home cost in Los Angeles of roughly $647,000.  Here in Pasadena, the average home price is a good deal higher, which would mean that the increase in the home’s value by adding solar will almost certainly cover the cost (and then some) of even a very large solar power system. To be sure, it helps if the system is installed in a way that also makes the home look better (see above), so you will want to avoid Shortcut Solar for your install!

If you are looking to make an investment in your home that will benefit you both now, and when you go to sell, forget the designer kitchen - go solar!

1 2 3 4 5 ...6 ...7 8 9 10 11 12 ... 58 >>

Search

Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

Ready to Save?

Let’s Get Started!

Give Us a Call!

626.793.6025 or
310.584.7755

Click to Learn More About Commercial Solar Power!

We're Social!



Follow Run on Sun on Twitter Like Run on Sun on Facebook
Run on Sun helps fight Climate Change
b2evo