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.

Run on Sun is proud to call Pasadena home.  We absolutely love this place.  But it isn’t perfect, as evinced by the latest report on where Pasadena gets its power - that’s right, the 2016 Power Supply Content Label is now out, and it is a mixed bag to say the least!  Here’s our take…

Every year, California utilities are required to post a table that reflects the sources of the power that they provide, the “Power Supply Content Label."  We wrote about PWP’s energy mix when the previous label was published, and at the time we noted that coal constituted 34% of the energy supplied, with natural gas another 6% - a full 40% coming from fossil fuels.  Surely a year later the news would be better, right?

Not so much - here it is, read it and weep:

2016 Power Supply Content Label

Both coal and natural gas went up!  While the overall statewide mix is just 4% coal, PWP gets 10 times that much, a whopping 40%!  Combined with natural gas and 52% of our power comes from fossil fuels.  Moreover, half of the “renewables” comes from burning biomass and waste, thereby also contributing to greenhouse gas emissions!  (One bright spot - utility scale solar now accounts for 5% of all energy, up from zero the year before.)

Lest you think all of the small munis are as bad, not so.  Glendale Water and Power, in particular, is kicking PWP’s backside, with only 5% from coal, and just 29% from natural gas.  GWP also gets 26% of its power from wind!  (Here’s a link to their power label.)

PWP is making some strides, however.  Last year they replaced a 51-year-old steam plant with a combined cycle turbine unit that can produce power within minutes, compared to the 72-hour start time for the old system.  But at 52% fossil fuels, PWP still has a long way to go!

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!

In our first two posts this week recapping the state of solar feed-in tariffs in the Run on Sun service area, we focused on what is happening with the biggest FiT around, that run by LADWP.  But that isn’t, nominally at least, the only game in town so this post will summarize the progress, or lack of same, at the other FiT programs around: Glendale, Anaheim and Riverside.

Glendale

We have written at great length about the problems with the FiT program that Glendale Water & Power designed to meet their state mandate.  We noted that the prices being offerred—which were actually even 10% lower than what was presented to the Glendale City Council when they approved the program—were way too low to pencil out for a project, and that other uncertainties made it highly unlikely that anyone would participate.  In other words, as we told the Glendale City Council, they were approving a program that was designed to fail.

Nine months into the experiment, where do things stand today?  Let’s take a quick look at the FiT queue as of today:

 Ouch. 

All that empty space is just hard on the eyes.

In nine months, GWP has not received a single application for their FiT program—and contrary to how GWP officials refer to their defunct commercial solar incentive program as a “victim of its own success,” this program is a victim of GWP’s design.

Given the failure to attract a single project application, you might think that GWP would take steps to address their failure by increasing the offer price for energy, but you would be wrong.  This table summarizes the progression on GWP’s FiT offer price for energy:

The “City Council” price is what GWP suggested to the City Council the offer price might be when the program went live and that is the price the Council had before it when they approved the program.  The “Program Start” price is what was actually offered to potential project developers when the program went live last July. 

The “Q214″ price is what is being offered today—a reduction of 5.5% for Peak and 4.8% for Off-Peak deliveries.  That’s right, in response to offering a price that was already so low that no one was willing to put forward an application, GWP has responded by cutting its offer price by 5%.  Genius.

GWP will no doubt say that they have no choice, that the formula approved by the City Council for setting the offer price mandates this result, but that’s merely self-referential nonsense.  GWP designed the formula and the City Council confessed that they had no way to assess the technical merit of what was before them.  The formula is supposed to be based, in part, on avoided costs—but guess what?  So is the offer price for the LADWP FiT and yet it is twice what GWP is offering.  Are we to believe, therefore, that GWP’s costs are half of those incurred by LADWP?  If so, we suspect the customers of GWP would be surprised then that there rates are as high as they are.

It is high time that the Glendale City Council call GWP to task and insist that they re-create this FiT program so as to achieve what the state law intended—the actual installation of solar power in the City of Glendale.

Anaheim

The representative from Anaheim Water & Power had told us last year that their program to date, despite being started in 2010, had yet to attract a single application.  Checking in on Anaheim’s FiT website confirms that unbroken string of failure continues to this day with no projects in the queue.

Anaheim’s offer price tells us why: it ranges from 3.883¢/kWh for Off-Peak to 6.472¢/kWh for Mid-Peak to a summer On-Peak price of 9.708¢/kWh.

Riverside

Last year Riverside’s representative told us that they knew that their price was so low no one would bite and that was fine because they didn’t want solar installed in Riverside anyway.  Today, Riverside’s “we don’t want anybody to participate” price for energy is 6.2¢/kWh—exactly the same as GWP’s off-peak price.  Looks like GWP is playing follow the (non)leader.

Pasadena?

Which brings us to our friends at Pasadena Water & Power.  At a meeting yesterday we learned that PWP is considering a Feed-in Tariff program of its own.  Now we are fans of PWP, indeed, we think they are the easiest and best utility around to work with (and for, for that matter).  So that begs the question: What sort of FiT will PWP create?  They could base their program on what has been done at LADWP (with necessary tweaks to make small projects viable) and thereby insure a successful program that reduces pollution, creates local jobs and helps to green PWP’s energy mix.  Or they could follow the misguided path of GWP and its ilk, creating a program in name only, that guarantees that not a single kWh of clean energy will ever be generated.

Needless to say, we will follow FiT development at PWP closely.  Watch this space.