Categories: "All About Solar Power"

05/12/20

  06:41:00 am, by Jim Jenal - Founder & CEO   , 949 words  
Categories: All About Solar Power, Residential Solar, Energy Storage

New Rule in SCE Territory Makes Solar + Storage More Valuable

We just learned from our friends at Energy Toolbase that Southern California Edison has just changed a rule about how solar PV systems with Energy Storage can operate, and the result - amazingly enough - results in greater savings for our clients!  Imagine that?!?  Here’s our take…

It used to be in SCE territory that when you added a storage system to your PV array, you could not export energy from the storage system to the grid and receive net metering credit.  That meant that when the storage system was discharging, it could not exceed what the home’s loads were demanding.  If your usage in the evening was low, or say you were out of town, your fully charged battery could not discharge at all - a poor utilization of that expensive storage system.

But now SCE - along with the other IOU’s, PG&E and SDG&E - have changed their rules to allow storage systems to discharge back to the grid and receive full net metering credit for that energy, as long as the storage system is solely charged by the PV array.  When you combine that rule change with electricity rates that favor storage, such as SCE’s TOU-D-Prime rate, the change in the rule can account for significant savings.

To get a handle on how big a change this will be, we went back to the data that we have for a client who we will be installing a small PV array and a 10 kWh Ensemble storage system soon.  (All of our data analysis and visualizations you see here were done using Energy Toolbase, simply the best presentation tool on the market.)

Solar PV & Storage - No Net Metering Discharge

Our client with the small, 4.6 kW, PV system and 10 kWh Ensemble storage system has a system payback of 11.4 years.  (Larger systems would have a faster payback.)  For this analysis, we imported his SCE interval usage data (provided by UtilityAPI) into Energy Toolbase.  ET then takes the performance output from the PV system, the charge and discharge parameters of the storage system, and overlays that on the existing usage - doing that calculation over every fifteen minute interval for a year.

The graph below shows one day, July 8th, as a representative sample.  Let’s break this down:

Solar PV + Storage - no net metering discharge

There’s a lot going on in this image (click on it for a larger version).  The dark gray is the historical usage demand based on the SCE data.  The value is shown at the top as “Current Demand” and at the moment we have focused on - July 8 at 4:15 p.m. - the historical demand was 1.94 kW. 

The green curve shows the modeled PV array output, using the specific parameters for this site - azimuth, tilt, shading, historical weather, specific equipment being used - as determined by NREL’s PVWatts tool (version 5).  Right now it is at 1.17 kW. 

The red line shows the percentage state of charge for the storage system, at this moment it is 83%.  Net Demand is what is being imported (positive number) or exported (negative number) to the grid.  Finally, Battery Power is how much power is being pulled from the storage system which at this moment is 1.94 kW.  At the bottom is the cost parameters for this rate schedule.  Under the pre-solar Domestic rate (which is a tiered rate) the cost of energy is 18.7 cents/kWh, whereas under the new rate structure it is more than twice that at 38.3 cents during the peak, 4-9 p.m. period.

 So… earlier in the day, as the output from the PV increases, and energy charges are cheap, the solar charges the battery for use later when the rates are high. As we cross over into the peak rate period at 4:00, the storage system begins to discharge and its output is exactly the same as the demand, meaning that all of the power from the PV system can be exported to the grid. 

But note that the battery power is only 1.94 kW, even though its continuous peak output is roughly twice that, 3.84 kW.  Under the old rules though, the storage system cannot output more than that, since it is barred from exporting to the grid.  As a result, when the peak rate period ends at 9:00 p.m. the storage system shuts off, even though it is still partially charged (nearly 40% capacity remains in this example).

That’s leaving money on the table!

Solar PV & Storage - Net Metering Discharge Allowed

Consider the same day, only now we can export the full output of the storage system as desired to maximize our time-of-use arbitrage.

Solar PV + Storage - no net metering discharge

Everything is essentially the same until we get to 4:00 p.m. and then things get very different!  Look at the difference in the output from the battery system, it is now putting out it’s maximum sustained power of 3.84 kW, resulting in more than 3 kW being exported during the peak price period

More importantly from an arbitrage perspective, the storage system is completely cycled.  Meaning that we have gotten full utilization from our storage system investment.  

What does that mean overall economically?  Payback is reduced from 11.4 to 10.7 years, a 6.1% improvement.  Gee, thanks, SCE!

So why are they doing this?  Simple: grid support. Having storage systems maximizing their output during the peak demand period (remember the Duck Curve?) helps the utility to manage its load, and reduce the need for expensive peaker capacity. Everybody benefits: our client (with faster payback), the utility (with better grid load management), and even non-solar/storage rate payers (as they don’t have to pay for that additional production capacity.  Win, win, win!

Of course, these economic benefits don’t really apply to a tiered rate structure, such as is used for residential rates in PWP territory.  But if you are in SCE territory, adding smart storage, like the Enphase Ensemble system, just became a lot more lucrative.

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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!

02/29/20

  03:14:00 am, by Jim Jenal - Founder & CEO   , 1167 words  
Categories: All About Solar Power, Commercial Solar, Residential Solar, Ranting

Run on Sun Enters the Drone Era!

Just about a year ago, we really started thinking seriously about what drone technology might add to our solar installation company. The folks over at Scanifly – with their ability to take drone images and convert it into a 3-D model of a potential solar site, without needing to climb onto a roof, was really appealing. And that got us thinking of other ways a drone might be helpful - as with finished project photography, or inspecting existing systems. All of that seemed possible, but certainly there were obstacles in the path.

Well now, a year later, those obstacles have been surmounted, and Run on Sun has officially enter the Drone Era!  Here’s how we did it…

Research

We started by doing some homework.  Lots of it.  Watching videos to see what it would take to make this happen.  The list was fairly long: what drone to purchase (there are a lot of drones out there!), how do you learn to fly one (safely!), what does it take to do this legally?  And on and on.

Choosing a drone…

Drones come in all shapes and sizes - to say nothing of costs.  Last year LG sent out a professional crew to photograph one of our installations (you can see one of those photos here), and they used a $20,000 drone for the task.  Clearly that was going to be too rich for our blood!  A number of years ago, my good buddy Josh - who is always on the bleeding edge of fun tools - had let us use his drone for shooting some video of our reservoir project. Josh did all the real flying, but I did get to take the controls and found it pretty straightforward to fly.  So we had some exposure to some of the different drones out there.

Our Mavic Air, aka Oscar

Our Mavic Air, FAA # FA3NMEK4RF - aka Oscar!

In looking around, it seemed like DJI was the market leader in the types of drones that we might consider.  Ultimately, we settled on the DJI Mavic Air (in Flame Red, thank you very much!), and we purchased the “More Fly Combo” which included two extra batteries, spare props, prop guards and a carrying case.  We also shelled out for a hardshell carrying case, a landing pad, and some neutral density filters.  Total outlay was just over $1,000, and for that we bring you our Mavic Air (nicknamed Oscar by Victoria who insists that it is the only robot she loves), FAA #FA3NMEK4RF. Which brings us to the next point - flying legally!

Making it Legal

Choosing a drone was fairly easy.  Figuring out how to fly it legally, that was more challenging.  Way back in the day, I was a private pilot, but I found that I either had the time, but no money, or the money, but no time.  And living in the greater LA area meant dealing with the most complicated airspace in the country, if not the world!  So I quit flying when my daughter was born and haven’t flown since.

But, that did give me a leg up in learning how to fly legally, since I was generally familiar with the rules and regulations from the Federal Aviation Administration (FAA).  One of the first things you learn is that any drone that weighs more than 0.55 pounds must be registered.  Our Mavic Air weighs in at just over 15 ounces, so registration was a must.  Turns out that is super easy, and can be done online for a nominal fee.  We had our local label maker create registration labels so our Mavic Air is legal everytime it flies!

Of course, getting me licensed was another matter!  I found a number of great resources online, including this great video created by Tony Northrup! Tony’s video is an hour and forty-three minutes long and I watched it multiple times.  He is clear, funny, and amazingly helpful.  I also found an online study guide (currently unavailable as they update it) here.

The test consists of 60 multiple choice questions and you need a 70% to pass.  While a significant number of the questions are really just common sense - like is the FAA going to ever suggest that having a drink of alcohol will improve your visual acuity??? - there are a number of questions that require you to parse a weather report that looks like this: KIAD 180005Z 19008KT 10SM TS SCT060CB BKN090 BKN200 31/21 A3002 RMK AO2 TSB04 FRQ LTGICCCCG SW TS SW MOV NE T03060211 (seriously!), or puzzle through a sectional chart that is one of the densest data presentations ever invented. (Don’t believe me?  You can download it here, but be patient, it will take a while!)

Suffice it to say, I took my test prep seriously, and the result was rewarding: 100%! 

Now all I needed was to start flying!

Flying for (fun) and Profit!

So now that I was a fully licensed drone pilot, it was time to start putting those skills to use.  Here are some recent drone shots and a description of their application.  (In each case, clicking on the image will give you a full-scale picture.

Completed residential solar installation   

Finished Project Photography

One of the really cool uses for the drone is to give homeowners a view of their new system that you just cannot get any other way!

This image shows a just completed tilt-up system on a flat - and very bright white roof!

Garage roof   

Residential Site Evaluation Photography

Another great reason to use the drone is to take imagery that our friends at Scanifly can turn into a 3-D model - all without actually going on the roof!  This is a 25 degree pitch garage roof - not really something you want to walk on if you don’t have to!  Guess what, thanks to the drone, everyone stayed on the ground and we got a great model to use for our proposal!

Array inspection   

Inspection Photography

The other day, one of our clients reported that a neighbor’s tree had fallen on his carport, where our solar system was installed five years ago.  When we came out, the array was completely buried under the tree.  We advised the client to get the tree removed and we would return to survey the array for damage.

Once again, we were able to examine the array closely for signs of damage, without ever breaking out a ladder!

Commercial building   

Commercial Site Evaluation Photography

One of our most anticipated uses if for modeling larger commercial roofs.  Using Scanifly, we can get shading readings for any area on the roof, letting us have very accurate production models, thereby allowing us to provide our commercial and non-profit clients with better proposals than ever before.  And when you try to distinguish yourself by the quality of the information that you can provide, this is a great leap forward!

We really think that the drone brings us a new level of safety and competence.  So when you call us for that site evaluation, don’t be surprised if we never break out the ladder, but instead let Oscar - the newest member of the Run on Sun team - do the hard work for us!

02/28/20

  04:46:00 am, by Jim Jenal - Founder & CEO   , 411 words  
Categories: All About Solar Power, PWP, LADWP, BWP, GWP, Residential Solar, Ranting

SMUD Scheme Threatens New Solar Homes Mandate

With very little fanfare, the Sacramento Municipal Utility District ("SMUD") just convinced the California Energy Commission to allow it to offer a SMUD-owned alternative to installing solar power systems on new homes under California’s just instituted New Solar Homes mandate. As other municipal utilities lined up in support – including PWP, LADWP, BWP and GWP – it is clear that this is nothing short of a full-on assault against the New Solar Homes mandate. Here’s our take…

Solar installed on a new home

Solar added to a new home in Altadena

The intent of the New Solar Homes mandate was to install appropriately sized solar power systems on every new home in California.  There are many benefits to such a program, including providing distributed power across the grid, thereby increasing grid reliability, as well as generating jobs and raising public awareness as solar becomes commonplace. 

The SMUD scheme thwarts all of that.  Instead, a SMUD-owned solar farm would have it production allocated across participating new homes.  (Tellingly, the SMUD scheme does not permit privately built community solar farms to participate in the program!)  Worse yet, the SMUD scheme effectively prevents subsequent home owners from adding local solar, since the first 4,700 kWhs must come from the SMUD-owned facility.

So how did this get approved?  In addition to all of the municipal utilities in California lining up behind SMUD’s power grab, so did much of the building industry (as they can simply fill out paperwork for compliance instead of actually building solar systems), and the IBEW (whose members get employed when utility-scale solar farms are built).  On the short end of the stick are local solar contractors, and consumers who lose the power to choose their own, local solar system because the builder decided to opt-into SMUD’s scheme.

What say you, PWP?

Which brings this back home.  While Pasadena Water and Power did not submit their own letter of support (that we could find), their trade association, the California Municipal Utilities Association, did.  Now there aren’t that many new homes being built in Pasadena at this point, but can we expect to see a similar power grab from PWP?  LADWP did submit their own letter and there are plenty of new homes going up within the City’s boundaries - is a similar scheme in the works?

The utilities rely on consumers being largely uninformed as to these schemes to push them through.  We will be keeping an eye on what our local utilities bring forward in the coming months.  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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