Thoughts on Solar

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 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.

UPDATE - 5/28/16 - Despite our best efforts, AB 2339 was HELD in the Appropriations Committee, effectively killing the bill this session.  Thank you to everyone who took the time to call and voice their support for the bill.  Special thanks to Frank Andorka who created a podcast in support of the bill, all the way from Cleveland!  We lost this battle, but the fight continues.

UPDATE - 5/26/16 - We passed the Assembly Utilities Committee on a 10-2 vote, but right now we are stuck in the Assembly Appropriations Committee, chaired by San Diego Democrat Lorena Gonzalez. The decision of whether to allow AB 2339 to  advance to the Assembly Floor rests in the hands of two people: Chair Gonzalez and Speaker Rendon.  Please take a moment to give them a call and urge them to support the bill.  Here are their numbers:

• Lorena Gonzalez, Chair Assembly Appropriations Committee: 916-319-2080
• Speaker Anthony Rendon: 916-319-2063

Thanks!

Back in February we wrote about the new Net Metering 2.0 rules that the California Public Utilities Commission (CPUC) approved over the objections of the Investor-Owned Utilities (IOUs), SCE, PG&E, and SDG&E.

We noted at the time that the CPUC rulemaking did not directly affect the Municipal Utilities (munis, like Pasadena Water and Power). Boy was that right as muni after muni is looking to shut down Net Metering altogether! Here’s our take, and more importantly, an action item that you can take to preserve Net Metering with the munis.

How We Got Here

The munis  are generally free, within the limits of state law, to set their own policies as confirmed by the local city council.  So here in Pasadena, PWP sets its policy but has to have that policy ratified by the city council’s vote.  When it comes to Net Metering, state law requires that the munis, like the IOUs, offer Net Metering agreements until the amount of solar deployed exceeds “5% of the electric utility’s aggregate customer peak demand.” (CA Public Utilities Code § 2827)  Now if that quote seems like less than a model of clarity, you are quite right.  Before the CPUC, the IOUs argued that it meant that you look at a utility’s highest peak demand as of a certain point in time, and that would be the cap.  Such an interpretation, however, reads the words “aggregate customer” out of the statute.  The CPUC agreed, and the proper interpretation requires the utility to sum the aggregate demand from each customer and that becomes the cap.

The results are dramatic - the proper interpretation effectively doubles the total amount of solar allowed under the cap.  That decision by the CPUC back in 2012 redefined Net Metering, but only for the IOUs.  At the time there was little concern regarding the munis since none was close to reaching their cap. 

Fast forward to today and five munis have already reached their caps, as calculated under the old, pre-CPUC ruling, methodology.  That leaves them free to replace Net Metering with whatever they choose, and at least one, Turlock, has adopted new rules that have resulted in an 85% decline in the solar market there!  (In contrast, LADWP has already agreed to the new methodology thanks to leadership from Mayor Garcetti.)

Support AB 2339!

Fortunately there is a fix in the works.  AB 2339 (Irwin - D-44) will require that the munis calculate their caps in effectively the same way as the IOUs.  The bill is presently in the Assembly Committee on Utilities and Commerce, chaired by Mike Gatto (D-43) - a former student and colleague of mine, and a champion of clean energy.

We need the strongest bill possible coming out of the committee, and you can help make that happen.  How?  Our friends at CALSEIA have compiled a target list of key assembly members who need to here from their constituents on this bill.  From the CALSEIA newsflash:

Target List:

• Jim Patterson (R-Fresno/Clovis) 916-319-2023
• Susan Eggman (D-Stockton/Mountain House/Thornton/Tracy) 916-319-2013
• Mike Gatto (D-Burbank/Glendale/La Canada/La Crescenta) 916-319-2043
• Bill Quirk (D-Hayward/Ashland/Castro Valley/Cherryland/Fairview/ Fremont/ Pleasanton/San Lorenzo/Sunol/Union City) 916- 319-2020
• Miguel Santiago (D-Huntington Park/Vernon) 916- 319-2053
• Eduardo Garcia (D-Imperial/Blythe/Brawley/Calexico/Cathedral City/Coachella/Desert H.Springs/El Centro/Indio) 916- 319-2056
• Christina Garcia (D-LA/Bell Gardens/Bellflower/Cerritos/Commerce/ Downey/Montebello/Pico Rivera) 916- 319-2058
• David Hadley (R-Torrance/Gardena/Lomita/Manhattan Beach/Palos Verdes Estates/Redondo Beach/West Carson) 916- 319-2066
• Phil Ting (D-San Francisco) (916) 319-2019
• Rocky Chavez (R-Oceanside/Calsbad/Encinitas/Vista) (916) 319-2076

If you live in one of those districts, or if you run a business in one, or have customers there, please contact that member.

More generally, there is a website where anyone can go to express their support for expanding the benefits of Net Metering to muni customers throughout the State.  Just click on the button to make this happen:

Sadly, the list of entities opposing this bill includes Pasadena Water and Power - looks like we need some political leadership here in our own backyard to get PWP on board.

We will update this post as the bill progresses through the legislature - watch this space!

The new year is well underway (Happy New Year!), and so it is timely to revisit the question of financial incentives to Go Solar in the Run on Sun service area.  (You can read more detail about all of these incentives on our Solar Financing page.)

Federal Tax Credit

Beyond a doubt, the most significant incentive for going solar is the 30% federal tax credit.  Previously set to expire at the end of this year, the federal solar tax credit was extended late last year, continuing at the present 30% through 2019. 

The credit applies to solar installations in every utility’s territory, so no matter where you live in the U.S., this credit applies to you.  (NB: this is a tax credit, not an income deduction, so you need the tax “appetite” to take full advantage of this incentive - check with your tax advisor.)  For residential clients, the basis for the credit is the full cost of your solar project, less any rebate that you might receive from the utility.  Commercial clients, who must declare any rebate as income, do not need to deduct their rebate from the system cost when calculating the basis.

Utility Rebates

Once common everywhere, utility rebates are going the way of the dodo—with one or two notable exceptions.  We have rank ordered the local utilities below, based on the reliability of their rebate program.

Pasadena Water & Power

The big winner, again and by far, is the solar rebate program operated by our own Pasadena Water and Power.  Year in and year out, PWP offers rebates to its customers in a transparent and consistent manner - something that cannot be said of any of its neighboring utilities.

As of this writing, PWP is offering a rebate of $0.45/Watt for both residential and commercial customers, and a rebate of $0.90/Watt to non-profit customers (who cannot take advantage of the federal tax credit).  Alternatively, PWP also offers a performance-based incentive that is paid out over two years based on the actual production of the system.  Residential and commercial customers are paid 14.4¢/kWh, whereas non-profit customers are paid 28.8¢/kWh.

Los Angeles Department of Water and Power

LADWP offers a rebate, if you have the stamina to receive it. Vexed with the most bureaucratic process to be found this side of Orwell’s 1984 dystopia, applying for and receiving a rebate from DWP often feels like a reward for a life well spent.

That said, LADWP is currently offering rebates of $0.30/Watt to residential customers, $0.40/Watt to commercial, and $1.15/Watt to non-profits.  Just don’t hold your breath.

Burbank Water & Power and Glendale Water & Power

These two municipal utilities often feel like one and the same given their similar approach to rebates - which is to say, now you see ‘em, no you don’t.

Unlike their neighbor to the east, neither BWP nor GWP is able to maintain a rebate program throughout the year.  Instead, both open their rebate windows on or about July 1st (i.e., the start of their fiscal year) and then hand out money until it is gone, at which time the window slams shut until the following July 1.

Burbank’s program operates under a lottery, which last year opened on July 1 and was exhausted by August 15.  In addition, BWP imposes restrictions on the azimuth and pitch of rebated systems, despite their being no technical justification for doing so.

Glendale’s program is even less transparent, and the installation/rebate process is outlined in a 23-step ode to inefficiency.

We will revisit both of these program in mid-June to provide what guidance we can to the residents of these two cities.

Azusa Light & Water

The “Solar Partnership Program” in Azusa is fully subscribed.  There is a wait list that solar-hopeful customers can get on in the hope that at some point there will be rebate funds available - with no guarantees that there ever will be.

Anaheim

The Anaheim Solar Incentive Program was fully subscribed as of October 1, 2015 and is now closed, with no published plans to revise the program in the future.

Southern California Edison

SCE’s rebates, which were part of the larger, California Solar Initiative, have expired and no new funds are anticipated.  Of course, SCE customers still have the highest electricity rates around, which provides its own—albeit perverse—incentive to Go Solar!

UPDATE - We heard back from BWP - details at the end of the post…

The wizards at Burbank Water and Power have announced their solar rebate program will resume, but only for the lucky few who happen to be facing West.  Here’s our take.

Having a stable, predictable solar rebate program is the key to making a solar program successful. Municipal utilities like Pasadena Water & Power, and investor-owned utilities (like SCE) participating in the California Solar Initiative, have had great success with their programs. 

Then there are other munis, like Burbank Water & Power (BWP), that just can’t seem to get it right.  BWP, like its similarly misguided neighbor, Glendale Water & Power, has had an on-again, off-again rebate program that baffles all who attempt to make use of it.  Now, for a brief moment, BWP’s solar rebate program is on-again, sort of.  During the month of August, potential Burbank solar customers are allowed to submit rebate applications (submission deadline is August 29 at 5:00 p.m.) for a lottery to be held on September 8th.  The lucky 60 residential and 15 small commercial (<30 kW) customers who make the grade (no details on how the auction will actually be conducted have been released) will be advised of their good fortune by September 12th.  Rebate amounts are $0.96/CEC AC Watt for residential and $0.73 for small commercial.

But wait, there’s more.

For the first time in our experience, a utility is limiting rebates for solar systems to only those which face in a generally westerly direction.  In fact, systems facing true south are completely ineligible for rebates (as shown in the  image to the left), even though such systems are the most productive! 

BWP is essentially precluding the overwhelming majority of building owners from even having a chance at a rebate in their lottery system.

This continues a trend we have seen with other muni utilities (GWP we are talking about you) where solar programs are designed to be unsuccessful.  It will be interesting to see if we can extract any data from BWP about the results of their lottery.

BWP’s Stated Rationale for Restricting System Azimuth

But why the restriction in the first place?

According to BWP, it is to insure that the power produced comes closest to overlapping with BWP’s peak afternoon demand from 4-7 p.m.  Thus to qualify, systems have to be oriented between 200 and 270 degrees and have a minimum tilt of 5 degrees.

That seemed pretty arbitrary to us. 

While we could understand a utility wanting to limit providing rate payer money to systems that yield the maximum benefit to those rate payers, there is certainly nothing magical about a limit of 200-270 degrees.  In fact, somewhere around 270 should be the sweet spot for afternoon production, with a fall-off on either side.  So why cutoff systems beyond 270 degrees?

We decided to run some models using NREL’s PVWATTS tool.  We assumed a 10 kW system at a 10 degree pitch (a common residential roof pitch) and accepted the other defaults for the model.  We then calculated the hour-by-hour output for systems with azimuths ranging from 200 to 330 degrees.  Here are the results for the critical hours from 4 to 7 p.m.

All of the azimuth angles in the green box are acceptable to BWP, whereas all of the azimuth values in the red box are deemed unacceptable for a rebate from BWP.

But here’s the thing… see that green horizontal line?  That represents the 4-7 p.m. output for our hypothetical array with an approved azimuth of 200 degrees.  Yet five out of six azimuth values modeled here that are rejected by BWP, actually produce more power during the critical period than does our approved system at 200 degrees!

So what exactly is going on here?  BWP’s asserted rationale does not hold up to scrutiny.  Which begs the question, why, really, is BWP so seriously limiting who can participate in their lottery?  It certainly is not justified by their desire to maximize 4-7 p.m. production.  If that were truly the case, they should include azimuth angles all the way to 320 degrees.  They would get more timely power production while opening their rebate lottery to many more potential customers.

How about it, BWP, what is going on here? 

If you are a potential BWP customer who falls outside of the “accepted” azimuth band, you might want to contact the Solar Support program managers:

John Joyce: jjoyce@burbankca.gov or

Alfred Antoun: aantoun@burbankca.gov

If you get a response, please add it to the comments.

UPDATE - We heard back from John Joyce, Solar Support Program Manager at BWP, about the outcome of the lottery process.  According to Mr. Joyce:

105 lottery entries have been submitted and the budget is sufficient to allow each of these applicants to participate, therefore no lottery will be held.

We have a further inquiry in to Mr. Joyce to see if there is still budget left over to allow more applications going forward.  We will update this again if we hear back.

We have just learned that the City of Burbank will once again be offering rebates for a very limited number of solar installations.  Here are the details.

The total program is limited to projects below 30 kW; larger projects need not apply.

The program will pay rebates to residential customers at $1.28/Watt (CEC-AC) and $0.97/Watt for commercial customers.  There is no carve out for non-profits, however they say that such entities “will be given lottery priority."  Burbank says that is anticipates having enough funding for 50 residential and 10 commercial projects, with the allocation evenly split between the two.  That figures to be around a total of 500 kW, 50 residential at 5 and ten commercial at 25 kW each.  Surely the demand in Burbank is greater than that, so how will they handle the inevitable over-subscription?  Easy - Burbank is holding a lottery.

Throughout the month of July, applications can be delivered to the offices of Burbank Water & Power.  Then, on August 12, 2013, Burbank will hold a lottery and application numbers will be selected at random.  (Not sure how that squares with giving non-profits “lottery priority".) The lucky few winners will be notified by August 16, 2013.  “Winning” applications will have 1 year to complete their installation.

Questions about the program can be addressed to Solar Support Program Managers John Joyce or Alfred Antoun.

Not a great program by any stretch, but at least, for a while, Burbank is back in the game.