Category: "PWP Rebates"

04/28/11

  11:29:00 am, by   , 435 words  
Categories: All About Solar Power, Solar Economics, PWP Rebates, PWP, Energy Efficiency

Run on Sun Featured in Pasadena Weekly Article - The City of the Future

The April 28, 2011 edition of the Pasadena Weekly has a very nice article by Sara Cardine titled, The City of the Future, which includes an interview with Run on Sun Founder & CEO, Jim Jenal.

Part of its month-long series of articles on going Green, Cardine’s piece looks specifically at how Pasadena has taken long strides toward turning itself into a truly Green City.  Starting with its adoption of a “Green Action Plan” in 2006 - the same year that Run on Sun was founded - Pasadena is working hard to turn its good intentions into practical actions.  For example, Pasadena has made major reductions in its own energy usage and is pushing to do much more.

From the article:

Since the Green Action Plan was established, the city has seen improvements on multiple levels, said Ursula Schmidt, the city’s sustainability affairs manager. In addition to increased water and energy conservation, renewable energy use and recycling, the city is also making headway in its green building program and in an effort to establish an alternative-fuel fleet.

Last year alone, Pasadena trimmed its peak power demand by 4.45 megawatts and saved enough energy to power 3,640 homes for one year. Officials now hope to see a citywide reduction in greenhouse gas emissions of 25 percent by 2030, along with an increase in the citywide use of green energy sources beyond recently adopted statewide standards. Last month, state lawmakers passed SBX1 2, a law requiring that 33 percent of the state’s energy come from renewable sources by 2020. Pasadena is already pushing itself past that benchmark; last year the City Council adopted a comprehensive integrated resources plan that set a goal of 40 percent renewable energy use by 2020, according to Gurcharan Bawa, PWP assistant general manager.

Encouraging commercial and residential customers to Go Solar is a big part of the strategy to meet those goals.  Caltech, one of the largest energy users in the City, has installed over 1.3 megawatts of solar power on its campus with more planned.  Yet some customers have been reluctant to follow Caltech’s lead.  To get the installer’s view, Cardine interviewed Jim Jenal and quoted him as he described the process of working with an installer to get a proposal and ultimately, an installed system.

Please check out the article online or pick up a print copy (which features a wonderful picture of Jim with that famous Solar Kid) and let us know what you think.

As Cardine concluded:

“This isn’t rocket science — it’s truly something normal, everyday people can understand and feel comfortable with,” Jenal said.
It just begins with a little knowledge and the commitment to make a difference.

We couldn’t agree more!

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03/04/11

What You Need to Know About Commercial Solar Power in Three Easy Lessons - Part 2: Understanding Rebates and Tax Incentives

(Editor’s Note: Part 1 of this series - Understanding Your Bill can be found here.)

Commercial solar power systems are economical now - and in the first part of our series we explained how understanding your bill is the key to understanding what is currently driving your costs and how much you will be able to save.

Now we turn to the next step in preparing to install a commercial solar power system - understanding the applicable rebates and tax incentives.  We have written at great length before about these topics, including a blog post summarizing the year-end state of all solar power rebates in the Run on Sun service area and our solar tax incentives page provides great detail into this topic for all types of system owners - commercial, residential and non-profit.  In this post we will analyze just those rebates and incentives that are applicable to commercial solar power installations.

PBI vs EPBB Rebates for Commercial Solar Power Systems

Rebates for commercial solar power systems come in two flavors - Performance Based Incentives (PBI) and Expected Performance-Based Buydown (EPBB) - but PBI rebates are by far the more common for commercial systems above 30 kW.  EPBB rebates are lump-sum payments made based on the expected performance of the system.  The rebate rate is denoted in dollars per Watt based on the calculated AC Watts for the system.  EPBB rebates are nice for the consumer as the money is paid as soon as the system is approved, but for larger systems, they represent too much upfront risk for the utility.  Since there is usually no requirement to monitor the performance of the system, the utility ends up putting out its money with little guarantee of reaping the expected benefit.

PBI rebates, on the other hand, are paid out over five years based on the actual performance of the solar power system as verified by monitoring devices attached to the system inverter(s).  PBI rebates are denoted in cents per kilowatt hour generated.  Since the utility only pays for power actually provided, rebate dollars are guaranteed of providing the bargained for benefit. However, because of the need to provide the utility with verified performance data, PBI rebates increase the Operations & Maintenance expense of a commercial solar power system - at least for the five years of the rebate.  On the other hand, if your system is well maintained and conservatively designed, you may actually receive more in rebate payments than originally projected.

Each utility will have a threshold system size beyond which the system owner must take a PBI rebate.

Regional Rebate Amounts for Commercial Solar Power Systems

Of late there has been a great deal of turmoil among the local municipal utilities regarding their rebates.  This has lead to uncertainty and delays.  As of this writing, here is the landscape for commercial solar rebates in the Run on Sun service area:

Utility PBI Rate EPBB Rate PBI/EPBB Threshold
SCE 3¢/kWh $0.25/W 50 kW
PWP 21.2¢/kWh $1.40/W 30 kW
BWP Suspended until August 2013 $2.07/W 30 kW
GWP Suspended until 2015 ??? ???
LADWP Suspended until July 2011 ??? ???
Commercial Solar Rebates as of March 2011

This means that as of this writing, only SCE and PWP are paying rebates on commercial solar power systems greater than 30 kW. While LADWP is expected to come back online this summer, in what form remains to be seen.

We believe that these suspensions have come about because the lobby for commercial solar rebates is small and too often silent.  Of course, when no public discussion occurs before the decision is made to suspend rebates - as happened in both Glendale and Burbank - it is pretty hard to organize solar supporters.  Indeed, in Los Angeles, where the plans to severely limit solar rebates were publicly debated, the solar community came out in numbers to argue for those rebates - which resulted in LADWP only suspending their program for a comparatively short time.

The conclusion in inescapable - until there is a statewide feed-in tariff at a reasonable rate that offers predictability along with economic viability, the market for commercial solar in this state will continue to be subject to the caprice of unaccountable bureaucrats.

Tax Incentives for Commercial Solar Power Systems

While the news regarding rebates remains murky, the news on the tax front is - at least for this year - very good.

One caveat before we begin - while we believe this information to be accurate as of the date that it is written, you must always consult with your tax professional as to the applicability of these incentives to your tax situation.  Accountants shouldn’t design solar power systems and we don’t give tax advice.

Commercial solar power systems qualify for a federal Investment Tax Credit of a full 30% on the direct cost of the system.  (By “direct cost” we mean those costs directly associated with installing the solar power system.  The applicability of the Credit to indirect costs - such as deciding to re-roof your building before adding solar - must be decided on a case-by-case basis - see why that tax pro gets paid the big bucks?)  That Credit can be taken over two years and is a substantial incentive if you have the tax liability to offset.  Fortunately for systems that are put in service in 2011, commercial solar power system owners can elect to receive a Grant directly from the Treasury for the full 30%, regardless of their tax appetite.  Moreover, that Grant is paid out typically within 60 days of project completion, as opposed to being credited in the next tax payment cycle.  This provision in the tax code is subject to expiration at the end of this year, and there is no telling whether a more conservative Congress will renew it.  (The tax Credit, however, continues through 2016.)

Commercial solar power systems also qualify for accelerated depreciation.  For the past several years, that was a five year period with 50% in Year 1 and the remaining 50% divided evenly over the next four years.  (California offers a similar depreciation schedule.)  However, once again 2011 is special.  This year alone, that depreciation is 100% in Year 1, meaning that system owners may realize more of their savings sooner.

Collectively, rebates and tax incentives can reduce the cost of a commercial solar power system by 50% or more.  When combined with the savings from the energy generated, it is easy to see why a commercial solar power system is one of the best investments a building or business owner can make.

Up Next - Part 3 of Our Series: Understanding Your Bid for a Commercial Solar Power System

12/23/10

  06:30:03 am, by Jim Jenal - Founder & CEO   , 1687 words  
Categories: Solar Economics, Solar Rebates, PWP Rebates, SCE/CSI Rebates, BWP Rebates, GWP Rebates, LADWP Rebates, Utilities, PWP, SCE, LADWP, BWP, GWP

Solar Economics Heading into 2011 - Part 2 - Rebates

(Editor’s Note: This is Part 2 of our end-of-the-year Solar Economics series. 
You can read Part 1 - Solar Tax Policies - here.)

One of the most important factors in the growth of the local solar industry has been the availability of utility-based rebates for solar power installations.  This year has seen a lot of developments in this area, and unlike the tax arena where the news is all good, the simple, sad truth is that rebates are declining throughout Southern California, with some utilities suspending their rebates altogether and others threatening to do so.  Will the defeat of Prop 23, assuring that AB 32 will go into effect after all, mean that there will be additional funds injected into solar rebates?  Will a feed-in-tarrif finally take hold in California?  And where are rebates now, anyhow?  We will try to answer some of those questions in this post.

Current Rebates - A Utility-by-Utility Review

Please note - for more detail about solar rebates generally, we have an extensive webpage regarding solar rebates and how they work, please check it out.

Southern California Edison (SCE) and the California Solar Initiative (CSI)

SCE is the only local utility that provides rebate funds under the California Solar Initiative (CSI). The bad news? It means that it offers the lowest rebates of any of the utilities in the area. The good news? You can know precisely what those rebates are at any time by checking out the statewide trigger tracker website. The CSI rebate structure is based upon a series of megawatt targets assigned for each of the three investor-owned utilities that are part of CSI. (In addition to SCE, that includes PG&E in Northern California and SDG&E in San Diego.) As each utility reaches the target for a given step, it moves down to the next step in the rebate structure until the megawatt target for that step is reached.  There are 10 steps in the overall program, relating to incentives that started at $2.50/Watt for residential installation when the program began in 2007, and go all the way down to $0.20/Watt at step 10. Each step is further divided into allocations for residential and non-residential (i.e., commercial and non-profit) with the highest rebate rates for non-profit installations (which are given a higher rebate rate because they are ineligibile for tax benefits), then residential and finally commercial.

As of this writing, SCE is on Step 5 for residential customers, meaning that SCE is currently paying them $1.55/Watt.  From an initial allocation of  25 MW in the step, 5.22 MW remain, but SCE has already received applications for 1.41 MW.  Thus, the total remaining in Step 5 is 3.81 MW. After SCE moves to Step 6, the solar rebate rate for residential customers will be $1.10/Watt.

For non-residential customers, SCE is technically still on Step 7.  We say “technically” because from an initial allocation of nearly 82 MW, 22.17 MW remain, but with 26.72 MW of applications already received, the step has a net negative 4.55 MW “remaining". Thus, it is extremely unlikely that a new commercial or non-profit rebate application submitted today would actually be paid a rebate under Step 7. Under Step 8, SCE will be paying $0.35/Watt to commercial customers and $1.10/Watt to non-profits.  (Five-year PBI rebates will be paid out at the rate of $0.05/kWh for commercial and $0.15/kWh for non-profits.  For more on PBI rebates, see our webpage.)

Los Angeles Department of Water & Power (LADWP)

The rebate program at LADWP has been on a roller-coaster ride this year - threatening to sharply lower the amount of rebates before last-minute actions by the LA City Council sent the proposal back to Committee for a re-do. Perhaps in response to the Council’s action, DWP is now reporting on its website that it is out of money for solar rebates until next July!  Here is DWP’s announcement in full:

SOLAR INCENTIVE PAYMENT LIMIT REACHED FOR CURRENT BUDGET YEAR

Due to the popularity of our Solar Incentive Program, the budget for incentive payments for fiscal year 2010/2011 is now fully subscribed. Incentive payments will be processed on a first come, first served basis once new funding becomes available, expected to occur on July 1, 2011. Please be assured that your LADWP solar inspection is unaffected by the incentive budget and will still take place and the system will be turned on by the solar inspector upon passing the solar inspection. The anticipated wait times for an inspection can be found below on this website. The payment delay will not have any affect on the incentive amount. We appreciate your patience and thank you for your participation in our Solar Incentive Program and contributing to the greening of Los Angeles.

It is pretty much anyone’s guess at this point what this all means. While there is strong support for the LADWP solar rebate program from the City Council (to say nothing of the support within the City itself), there is also a major political struggle ongoing between the Council, Mayor and the DWP. One clear loser in all of this - potential solar customers in the City of the Angels.

Glendale Water & Power (GWP)

Once upon a time, Glendale Water & Power offered the highest solar rebates around - until they suddenly didn’t offer any at all. Last summer, in a move that can only be described as bizarre, GWP quietly updated their website to announce that GWP would no longer be providing solar rebates for residential customers until July 2011 - if then! Here is the current update from GWP:

Funds/Incentives for this program are currently unavailable until July 1, 2011.

Thank you for your interest in Glendale Water & Power’s Solar Solutions Program. Due to the success of this program and the high interest from our community, we have received an unanticipated number of applications this year, and unfortunately at this time we are unable to continue offering our solar rebates due to program incentive limitations. However, all applications received before July 27, 2010 will be processed this year, and applications received after that date will be added to a waiting list.
New funding for our Solar Solutions Program will be available July 1, 2011. If you have submitted an application to be put on the waiting list, we will contact you at the beginning of June 2011, to find out if you are still interested in participating in our program. If you are and want to proceed, we will request that you provide us the additional documentation needed to continue the application process.
Please be aware that 2011 funding will also be limited. Applications will be processed off the waiting list in the order they were received.
For more information on our Solar Solutions Program, visit our web site at www.GlendaleWaterandPower.com or call the Solar Solutions Program at (818) 548-2750.

Worse still, GWP has advised us that they are suspending solar rebates for commercial customers for five years! (Curiously, we cannot find anything confirming that on the GWP website.)

If and when GWP gets its financial affairs in order, it is anticipated that their solar rebates in 2011 will be paid out as follows: Systems up to 30kW (DC) $3.22/Watt; systems greater than 30kW (DC) $0.394/kWh.  For affordable housing installations, the numbers are higher: $4.02/Watt and $0.596/kWh, respectively.

Pasadena Water & Power (PWP)

Compared to its neighbors in Los Angeles and Glendale, Pasadena Water and Power is a poster child for how to do things right. (Ok, that is perhaps daming with faint praise given the debacle in LA and Glendale, but still, PWP has been predictable and open about their solar rebates.) PWP last lowered its rebates in July 2010, and has now announced that its next rebate rate reduction (for residential customers only) will occur as of February 1, 2011.

As of this writing, PWP is paying $2.40/Watt for residential, $1.40/Watt for commercial, $2.15/Watt for non-profits and a whopping $4.00/Watt for low income/affordable housing installations.  PWP also offers PBI rebates at $0.363/kWh for residential, $0.212/kWh for commercial, $0.325/kWh for non-profits and $0.632/kWh for low income. The February rebate reduction for residential customers will bring those values down to $2.00/Watt or $0.302/kWh.

Burbank Water & Power (BWP)

Burbank Water and Power is presently on Step 2 of a 9-step solar rebate program.  While there are specified installation amounts associated with each step (as there are with SCE’s CSI program), BWP is also committed to reducing its solar rebates by “at least 7% per year until they are zero by the end of 2016."  The present Step 2 has the smallest installed capacity goal of just 825 kW - and as of this writing, the BWP website is reporting that only 30kW remain. Thus, it is anticipated that BWP’s rebates will step down sometime next year.

For residential customers today, the rebate is $3.14/Watt which will decline to $2.78/Watt when BWP drops to Step 3.  (For systems over 30 kW (AC), those rebate rates are $0.464/kWh and $0.415/kWh, respectively.)  Commercial customers are currently receiving rebates of $2.33/Watt which will decline to $2.07/Watt at Step 3.  (For larger systems over 30kW, those rebate rates are $0.288/kWh and $0.258/kWh, respectively.) Finally, non-profit customers enjoy rebates today of $2.67/Watt, headed down to $.2.36/Watt at Step 3.  (For larger systems those values are $0.311/kWh stepping down to $0.280/kWh.)

Feed-In Tariffs, Anyone?

Against this chaotic backdrop of widely (some would say wildly) varying solar rebates, the need for the market clarity of a true, state-wide feed-in tariff (FIT) stands in stark relief. A FIT established at the state level would provide the missing piece for solar growth - long-term predictability. While there are many FIT models, the essential concept is easy - the utility agrees to pay a set price (which could include increases over time) for every kilowatt hour generated for a specified period (typically ten to twenty years). It was Germany’s FIT that made that nation - with the equivalent amount of annual solar insolation as Maine - the leader in the world for installed solar and allowed its solar industry to explode. There is no reason why that success could not be replicated here - but so far utilities are balking at moving forward and the only programs coming out of the California Public Utilities Commission exclude residential and all but the biggest commercial customers altogether.

California can, and must, do better in the coming year. Are the folks in Sacramento listening? Time will tell.

10/30/10

  08:12:03 am, by Jim Jenal - Founder & CEO   , 195 words  
Categories: Solar Economics, PWP Rebates, PWP

Pasadena Reducing Solar Power Rebates Effective February 1, 2011

Run on Sun has 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.

There is surely more to report on this subject and we will be following up over the next week. Never-the-less, while any rebate reduction is disappointing, PWP deserves credit for managing their rebate process in a more orderly and predictable fashion than some of their neighbors have. Now if we could get them to disclose the statistics of their solar program so that we could all see where their rebate money has gone - as all CSI participants must do - we could really give them kudos, but that is a subject for another post.

05/23/10

  09:36:43 am, by Jim Jenal - Founder & CEO   , 388 words  
Categories: PWP Rebates, PWP

June 30 Deadline for PWP Solar Rebates Coming Fast!

The huge solar rebate reductions coming from Pasadena Water and Power are right around the corner, with rates going down by 24% for residential customers and 30% for commercial customers. There is still time to avoid these reductions, but you must act NOW.

More after the break.

As we reported back in February, PWP has announced some dramatic reductions in their rebates for solar power installations, and the deadline for complete applications is June 30.  Here is what the reductions look like:

PWP Rebate Reduction chart

PWP has explained that these reductions are necessary due to the applications from a few large commercial customers that have locked-up rebate monies for projects that are scheduled to come online later this year.  Nevertheless, PWP is lowering their rebates in every category.

What does this mean for potential customers?  It is important to understand that filing a rebate application does not mean that the project must start right away.  To the contrary, once rebate applications are approved, customers have nine months to complete the installation under PWP regulations, longer for new construction.  But acting now is critical to locking in the higher rebate amount that will be paid when the project is completed (or over the next five years for larger systems receiving PBI rebates).

PWP is insisting that it must receive complete applications by June 30 to qualify for the current rebate amounts.  At a minimum, this requires residential customers to have signed a contract at least one week before the deadline to ensure that all of the rebate paperwork is complete and in PWP’s hands before the deadline.  For commercial customers, a more realistic deadline is June 10th given the greater complexity inherent in any commercial solar rebate application.

At Run on Sun, we have geared up to handle the anticipated rush.  Said Brad Banta, President and COO of Run on Sun, “The last time we saw this type of rebate deadline with PWP was the end of 2008 and we handled 5 times as many rebate applications in the final six weeks as we had in the previous six months.  Given the improving economy and the anticipated increase in PWP’s electric rates later this year, we expect an even greater flood of applications this time around.  We are confident that we will be able to serve all of these new customers in the timely fashion needed to meet this deadline.”

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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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