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!

TL;DR - We need your help to preserve net metering - Sign the Petition!

Run on Sun has been installing grid-tied solar power system since 2007, and one constant in all of that time has been the hostility towards such systems evinced by the Investor-Owned Utilities (IOUs): SCE, PG&E and SDG&E. Nowhere is that hostility on clearer display than it has been in their efforts to erode, if not eliminate altogether, net metering.  But now, with the IOUs lobbying for the creation of Net Metering 3.0, the battle for the survival of net metering is about to be joined in earnest.  If your right to put solar on your home or business is to be preserved, we are going to need all of you to join the fight.  Here’s our take…

What is Net Metering?

Net Energy Metering (NEM) or just net metering for short, is the basis by which a solar system provides the owner with a significant portion of their financial benefit.  Solar systems on a clear, sunny day produce energy that follows a normal distribution, with the peak energy production occurring around solar noon, and rolling off in a typical “bell curve” on either side.  That energy saves the system owner money twice: first, by directly offsetting the energy usage of the home or business, but secondly, by allowing the excess energy to be exported back to the grid for retail credit.  That retail credit is then applied against energy imported from the grid to power loads at night or on cloudy days.  At the end of the billing cycle, those two values - the amount of energy imported versus the amount of energy exported - are “netted” out, and if the amount imported is greater than what was exported, the difference is charged to the customer.  Conversely, if more energy is exported than imported, the customer has a credit for that period that can be carried forward.

Of course, the energy exported to the grid for which the net metering customer gets credit doesn’t disappear - the utility sells it to another customer for that full retail value.  Moreover, because that energy did not have to be transported from far-off generation facilities, there is less demand to build expensive infrastructure like high-voltage transmission lines - you know, like the lines that have sparked deadly wildfires in the past few years.

So you might think that net metering would be a win-win for everyone - solar clients get a greater financial incentive to foot the bill for installing energy generation systems and the utility gets additional energy without incurring the costs of building or maintaining them.  But you would be wrong.  You see, IOUs don’t make money selling energy.  They make money building things.  In fact, in a stunningly perverse incentive structure, the IOUs get a guaranteed return on investment of 10% for every dollar they spend building stuff: generation plants, transmission lines, etc.  So they see the growth of solar, particularly rooftop solar, as a threat to their antiquated business model, and the best tool at their disposal is to take as big a bite out of net metering as possible.

Where are We Today and Where are the IOUs Trying to Go?

The version of net metering described above actually no longer exists with the IOUs, instead, they transitioned to NEM 2.0 a few years ago.  (Municipal utilities, like PWP, still offer full net metering.)  Under that scheme, a one-time interconnection charge was created, along with what are known as Nonbypassable Charges, which require their customer to pay a relatively small amount for every kilowatt hour of energy imported, even if that energy is actually offset by exported production.  The real kicker was that all solar customers in IOU territory were switched to Time-of-Use rates that made the value of exported solar lower, and energy imported from 4-9 significantly more expensive.

But now, heading into NEM 3.0, the IOUs are going all in!  A recent report by the consulting firm E3 was released by the CPUC and it highlights some options for changing net metering that would seriously impact the value of solar.  In particular, the report proposes fixed monthly charges of between $50 and $70 for all solar customers, combined with a “grid access charge” each month of between $5-$7/kW installed!  That means that under the best case scenario of their proposals, a residential customer with a 4 kW solar system installed would pay an extra $70 per month, every month, just because they have solar - that they paid for - on their home!  That is an $840/year penalty for going green! 

If that doesn’t make you see red, nothing will!

We’re Not Gonna Take It!

To say that the California solar industry is in the fight of its life is an understatement.  But so are all solar customers, who could see the value of their investment greatly eroded by these misguided policy proposals.  And that is where you come in.  We are fighting back and we need you in the fight!  The California Solar and Storage Association (CALSSA - our trade association) and the Solar Rights Alliance are gearing up to organize against the threat.  The first step is in signing a petition to Governor Newsom - we need him as an ally now.  It is super easy to sign on and we are looking to collect 20,000 signatures before April 1.  As of this writing, we are at 923 supporters, so we have a long way to go - and that starts with you!  (We will have more news on ways to fight back in the coming weeks, so watch this space.) 

Please click the big button below and let’s get this done!

A key to the growth of solar, particularly commercial solar, is the availability of affordable storage solutions.  Two recent developments suggest that we are about to see dramatic growth in this vital market sector.

CPUC Decision

One week ago the California Public Utilities Commission (CPUC) voted five to nothing approving a plan to require the three investor-owned utilities (SCE, PG&E, and SDG&E) to procure  1,325 MW of energy storage by 2020, with installation completed by no later than the end of 2024. Both SCE and PG&E are required to procure 580 MW each, with the remaining 165 MW allocated to SDG&E.  200 MW of that 1,325 MW total is to be interconnected at the customer’s site.  In addition, the decision provides a timeline for this to happen with the first 200 MW to be procured by the end of next year.

Other electric service providers, like the munis, will have to procure energy storage equal to 1 percent of their annual peak load by 2020.  Those storage systems can also include customer sited and/or customer-owned storage devices as long as they were installed after January 1, 2010.

Large scale pumped hydro storage (greater than 50 MW) is excluded from the program, but storage obtained from plug-in electric vehicles can be counted.

This is a tremendously significant decision as the mandate will surely drive R&D as well as deployment investment and help provide a ready market for these emerging technologies.

Stem Makes its Move

An announcement this week during Solar Power International shows how that investment is already starting to happen.

Stem - the company with the clever technology for using storage to “smooth out” the demand peaks that drive commercial energy costs - just announced a $5 million project finance fund with Clean Feet Investors (CFI).  From the parties’ press release:

The new financing model, which Stem developed in collaboration with CFI, is designed to open access to a wider pool of customers by removing barriers to adoption, enabling up to 15 MW of energy storage to be deployed. With this financing capability, Stem hopes to follow the dramatic growth trajectory pioneered by the third party ownership model in the solar industry. Stem and CFI plan other innovative financing offers for customers including performance-based and shared savings financing solutions with the capital from this financing.

“In addition to breakthroughs in technology, Stem is focused on driving business model innovation,” said Prakesh Patel, Stem’s vice president of capital markets and strategy. “By working closely with CFI, I believe we have created a unique offering to help accelerate customer adoption of Stem systems. This transaction paves the way for Stem to become one of the first efficiency technologies to achieve bankability.”

“Deployment capital is essential for Stem to get their technology in the hands of their customers – many of whom prefer a “pay as you save” offering,” added Jigar Shah, a principal at Clean Feet, and founder of the largest solar services company, SunEdison.

Allowing companies to install Stem’s technology with little or nothing down will help those companies save money at the same time it allows Stem to ramp up.  This is great news for the solar industry since it is posed to provide the energy that Stem’s system later distributes as needed to offset those costly demand peaks.

Of course, this isn’t exactly great news for the utilities who, if this technology were widely adopted, would see a huge revenue hit as more and more commercial customers were able to lop-off the most expensive energy they now have to procure.  Whether it is the continuation of net-metering on the residential side or the ability to eliminate the worst of demand charges on the commercial side, the pressure on the utilities will only continue to grow.  But for their customers, things have never looked brighter.

We have been teasing out bits and pieces of our new book, Commercial Solar: Step-by-Step, all summer as we neared the end of the publication process.  Well today we can formally announce that it is available both at the Run on Sun Publishing eStore (where we get a better royalty - hint, hint!) and on Amazon.com!

Commercial Solar is intended for two primary audiences: Owners & operators of commercial buildings, and Solar contractors who are looking for a meaningful “leave behind” item to give to their potential commercial clients.

As the title suggests, the book provides an overview of the process by which an interested party - say, a facilities manager - can go from knowing next to nothing about commercial solar to identifying appropriate contractors to provide bids, analyzing those bids to make meaningful comparisons, determining financing options that are appropriate and even overseeing the actual installation process.

The book features a Foreword written by Boaz Soifer, VP of Sales at Focused Energy:

The material could be dry (much of the reading on this subject is), but is instead casual but precise, clearly laid out, and made accessible through handy use of a narrative in which the Facilities Manager of a fictional company undertakes a commercial solar project himself…

In his typical style—approachable, honest, quirky, and occasionally scathing—Jim has thoughtfully flattened out the com­plex world of commercial solar PV into an under­standable roadmap that anyone can follow to project success.

Interested? You can download a two-chapter excerpt of the book for free, here.  Better yet, you can purchase the book today from either our eStore or Amazon for just $9.95.  If you are interested in bulk sales (i.e., ten or more copies), discounts are available.  Please contact us at Bulk Sales for more information.

And of course, we welcome your comments either here on the blog or at Amazon.  Thanks for your support.

It has been said that as with sausage making, one should never watch how legislation is actually made as the process, if not the end result, can be sickening.  That adage seems to be playing out over the anti-solar/pro-solar legislation known as AB 327.

As originally drafted, AB 327 sailed through the Assembly, only to be “gutted & amended” in the Senate into legislation that many in the solar community saw as nothing short of an existential threat.  Online petition campaigns were launched and one prominent solar company started robocalling to urge other solar companies to join the opposition.

(Note to colleagues: the only thing more annoying than robocalls are when the party behind the robocalls denies any knowledge about them - as this company did the three times that I called them.  Bad way to build allies.)

Now the folks over at Greentech Media are reporting that the bill is facing additional amendments that might, perhaps, turn the bill into something of a win for the solar industry.  The piece by Jeff St. John titled - AB 327: From California Solar Killer to Net Metering Savior? - does a fine job of tracking the twists and turns of this legislation and lays out what might be the road ahead.  It is well worth the read.

But with the end of the legislative session looming - all bills must be passed by September 13 - time is tight for this process to be done correctly.  Moreover, given that the CPUC is due to release a study on the costs and benefits of net metering, it is hard to understand the rush to try and get this bill passed now.  The legislative process would be far better served - that is, we would have a far more appetizing result - if we were to take a pass on AB 327, digest the CPUC study, and get all stakeholders to the table to craft a long-term solution.

Will that happen?  Well, betting on nothing happening is always a safer bet than on the right thing happening, particularly in the crunch time that marks the final two weeks of the session.  A break in the action might not be the result we would most relish, but it is probably the most palatable result that we can achieve.