Categories: "Solar Economics"

05/26/21

  04:43:00 am, by Jim Jenal - Founder & CEO   , 173 words  
Categories: All About Solar Power, Solar Economics, SCE, Commercial Solar, Residential Solar, Ranting, Non-profit solar, SDG&E

Stop AB1139!

We have written about the perils of AB 1139 and how it would gut net energy metering for all solar owners, regardless of “grandfathering” that they were promised.  Having sailed through two Assembly committees unscathed, it is scheduled for a floor vote in the Assembly tomorrow, Thursday, May 27th. 

We need you to call your Assemblymember NOW to get them to vote No on this terrible bill.

Here is the News Flash that we just sent out to our subscribers:

 AB 1139 Heads to Floor Vote
Take Action Today

AB 1139, the Utility Profit Grab bill to kill rooftop solar and hurt your solar investment heads to an Assembly Floor vote expected TOMORROW. Call your assemblymember to stop the bill right now! Click here to take action.
 

We need to flood the assembly with thousands of phone calls. Phone calls work! So, Please call now. It takes 2 minutes.

When you click the link below, we will help you determine your Assemblymember and set up the call for you - it couldn’t be easier.

 
Call your Assemblymember Now
 

Thank you for your support!

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12/28/20

  02:04:00 am, by Jim Jenal - Founder & CEO   , 605 words  
Categories: All About Solar Power, Solar Tax Incentives, Residential Solar

Happy New Year - the Solar & Storage Tax Credit is Extended!

Ok, so of course it took some last minute drama - this is 2020 after all - but the extension to the federal tax credit for solar and storage has been signed into law!  Read on to see what that means for you!

State of the Law Going into Deliberations

New project for the New Year!

This new project will get the full 26% tax credit next year!

As readers of this blog would surely know, the federal tax credit that had been set at 30% for several years, dropped down to 26% in 2020 (just the first of many not-so-desirable outcomes for a year that would see so many!), and was scheduled to decline to 22% for 2021, before expiring completely in January of 2022 for residential solar projects. 

We have written before that the solar tax credit was quite popular on both sides of the aisle, so there was always some hope that the current credit rates might be extended, but that was by no means a sure thing.  Fingers crossed and all that!

A Bill is Born!

As the negotiations between the Trump Administration and Congressional leaders progressed to try and provide economic stimulus at a time when many are out of work, too many facing potential evictions, and state and local governments facing severe challenges, word came out from CALSSA that the extension of the tax credit was in the draft bill!  Then on December 21st we learned that the extension was in the final bill that was being sent to the President!  (For those who are true gluttons for punishment, here’s a link to the Bill, and the language for the residential extension is on page 4,915!  Crazy, right?)

Excited by this most welcome development at the end of a dark year - and just in time for Christmas! - I was ready to write this blog.  But hey, this is still 2020, so I resolved to keep my powder dry until the Bill had actually been signed!

Drama

Seems my hesitation was warranted, as the President declared the Bill - negotiated by his Administration - a “disgrace” and threatened to veto it!  Instead insisting that the relief payments be substantially increased (something his own party rejected) and the “pork” in the bill be removed.  (News coverage of the President’s displeasure focused on exemptions for “three-martini lunches” (who is doing that these days?) or depreciation schedules for race horses!  The solar tax credit did not seem to be part of the pork in question.)  Of course, one man’s pork is another man’s livelihood, and besides, you cannot really take an agreement that took literally months to hammer together and then redo it in days.  Didn’t the President ever see, “I’m Just a Bill?”

All’s Well that End’s Well

So after much Sturm und Drang, on Sunday the Bill became a Law!  Which means we can tell you exactly how things will progress going forward on the tax credit front:

The 26% credit will now continue for projects “placed in service” between now and the end of 2022.  The 22% credit will apply to projects placed in service between January 1, 2023 and December 31, 2023.  Projects that go into service after January 1, 2024 will receive no credit under this new law.

Given the stimulus value of solar and storage projects - to say nothing of their environmental benefits - this is a most welcome development.  And for projects that got delayed due to the pandemic, the full 26% credit will still be available next year - a relief to many homeowners and solar installers who have been up against the clock.

In the end, the process was messier than it needed to be, but the job got done.  Here’s hoping that 2021 and 2022 can be real boom years for the solar industry, and the broader economy as well!

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!

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.

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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.

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