The Energy Show

Commercial solar has lagged behind utility scale and residential solar for two reasons. The first is that paybacks for commercial solar have historically been longer than CFO’s would like -- anything over 3-4 years is a “big” decision and usually gets pushed aside. The second reason is that the financing structures for commercial solar were complicated; although leases and PPAs are effective in reducing operating costs, they are not necessarily good long term investments. New financing options for commercial solar are changing this picture. Banks are getting more involved in providing unsecured loans for solar installations, and secured solar loans are becoming available that offer relatively low interest rates. Property Assessed Clean Energy, or PACE loans are perhaps the most significant innovation. PACE loans are secured by the property itself, and are paid back as part of annual tax assessments. If the property is sold the loan on the solar improvement automatically goes to the new owner. The loan debt typically does not show up on a company’s balance sheet. And if the property is leased to a tenant with a triple net lease in which the tenant pays an allocated part of the property taxes, then a portion of the solar repayment loan can be automatically passed on to the tenant (who in exchange gets the benefit of free solar electricity). If you own or have a long term lease on a commercial property in a solar friendly state, please Listen Up to this week’s Energy Show on Renewable Energy World for the latest on financing options for your commercial solar installation.

Ahhh….it’s almost springtime. The weather is getting warmer, the trees are starting to bud, and people are starting to think about their next home improvement project. And along with the warming weather, the solar salespeople are starting to swarm on unsuspecting homeowners like locusts from the plagues of Egypt. You may be interested in rooftop solar. But solar products, systems and terminology are confusing. As you do your research you’ll be inundated with TLAs (three letter acronyms)...and the more installers you talk to, the more you’ll get confused. On this week’s Energy Show we’ll review a Four Step Process that you can use to compare different home solar proposals. Step One: Compare Installers. Consider local installers, check references from friends and neighbors, and read online reviews. You will almost always get better service and faster installation turn around with a local company. When hiring someone to work on my house, for accountability purposes I always prefer contractors that have their own trained crews (not subcontractors or temporary works). Step Two: Determine the Cash Price of the Installed System on a Per Watt Basis. Just as buying a car, you always want to shop for the best cash price -- keeping financing out of the picture. Get a quote for the total installed system (no deductions yet for incentives or tax credits). Then determine the total number of DC watts of the system (number of panels times watts per panel). Divide the watts into the dollars to get a $/watt price for your system. Pricing can range from the low $3/watt to over $5/watt. For example, a system priced at $20,000 for 20 panels, each with a rating of 270 watts, will cost $3.70/watt. Don’t get distracted with varying claims about equipment reliability, inverter efficiency or panel degradation -- they are all about the same. Regardless of manufacturer or installer, every system will put out about the same amount of energy (and annual dollar savings) if it has the same DC watt system size. Step Three: Compare Equipment and Services. Solar panels are commodities, but you will pay more for higher efficiency and more well known brand names. All panels have 25 year warranties, and will operate maintenance-free (except for an occasional cleaning if they get very dirty). The only time you need higher efficiency is when you have limited roof space. Nevertheless, you may prefer solar panels that look all black and are mounted flush to the roof, or micro-inverters and optimizers that have built-in safety features, or a system that has monitoring that you can view on your cell phone. Step Four: Compare Financing. There are so many assumptions involved in financing, system output, energy rates and output “guarantees” that it is almost impossible to compare the total savings numbers. That is why it is easiest to compare cash prices or, if you are considering a lone, comparing interest rates. Watch out for escalation rates applied to energy prices (escalation rates will inflate your savings) and monthly payments (escalation rates will increase your repayment costs). Rooftop solar has never been more cost effective and reliable as it is now. Favorable tax policies, local incentives and net metering combine to make solar a great long term investment. So if you’re considering rooftop solar, Listen Up to this week’s Energy Show on Renewable Energy World.

E-6 TOU (Time of Use) Rates Closed to Customers in March, and E-7 Eliminated When the new TOU rates become available this spring, PG&E will end its solar friendly E-6 and E-7 rates. The new TOU rates will not be as favorable to solar customers since the peak rate periods are shifted later in the day when there is less generation from solar (see details below). For most customers we recommend that you immediately change to the E-6 rate so that you can preserve this good rate option for the future. If you are on the current E-6 TOU rate you don’t need to do anything. This E-6 rate is currently slated to stay in place until 2020 or later. If you are on the old E-7 rate we recommend that you immediately change to the E-6 rate. Otherwise, PG&E will automatically switch you to the new TOU rate, which will not save you as much money as the E-6 rate. If you are on an EV rate and charge your vehicle at night, stay on the EV rate. If you are on the current E-1 rate and do not use a lot of electricity during weekday afternoons, we recommend that you change to the E-6 rate. Since the E-1 rate has no time of use component, it is generally good for customers who cannot run their meters backwards during the day (typically smaller solar systems and higher daytime AC electric loads). All current solar customers are on the Net Metering 1.0 program (and grandfathered for 20 years), so you can go back to the E-1 rate if the E-6 rate is not beneficial for you. Clear as mud, right? Unfortunately, these rate changes are complicated. Nevertheless, we want you to achieve the maximum benefits from your rooftop solar system. For more information, please call PG&E at (800) 743-5000 to discuss your rate options and decide whether moving to E-6 is the best option for you. E-7 Rates PEAK: noon to 6pm Monday through Friday, All Year, $0.16-$0.54/kwh OFF-PEAK: all other hours, $0.13-$0.30/kwh E-6 Rates Summer (May 1 through October 31) PEAK: 1pm to 7pm Monday through Friday, $0.34-$0.51/kwh PARTIAL-PEAK: 10am to 1pm and 7pm to 9pm Monday through Friday, plus 5pm to 8pm Saturday and Sunday, $0.23-0.39/kwh OFF-PEAK: All other times, including Holidays, $0.15-$0.32/kwh Winter (November 1 through April 30) PARTIAL-PEAK: 5pm to 8pm Monday through Friday, $0.17-$0.34/kwh OFF-PEAK: All other times, including Holidays, $0.15-$0.32/kwh EV Rates PEAK: 2PM-9PM Monday-Friday, 3PM-7 PM Sat, Sun, Holidays, $0.44/kwh Summer, $0.31/kwh Winter PARTIAL PEAK: 7AM-2PM Monday-Friday, 9PM-11PM M-F, $0.24/kwh Summer, $0.18/kwh Winter OFF PEAK: All other hours. $0.11/kwh FUTURE E-TOU Rates PEAK: 3pm to 8pm Monday through Friday, rates TBD OFF-PEAK: All other times, including Holidays, rates TBD

After gazing into my crystal ball, I see a good year for rooftop solar in 2016. In fact, towards the end of 2016, my crystal ball got even clearer as the ITC was extended through 2021, and California’s Public Utility Commission decided to extend retail net metering -- instead of kill it as was done in Hawaii and Nevada. So here are my Ten Predictions for Rooftop Solar in 2016: 1. The rooftop solar industry will focus on steadier, more sustainable growth. 2. Manufacturers and installers were ramping up capacity to meet expected U.S. demand in the last year of the ITC – but with the ITC cliff gone, there will be excess capacity in 2016, leading to continued price reductions. 3. Local and regional installers will continue to gain market share. 4. Adam Smith’s invisible hand will wave away the impact of the module tariff dispute. 5. Soft costs will continue to go up as a percentage of the total installed cost to homeowners. 6. Even with slightly higher interest rates, homeowners will have more choices for system financing 7. Investments in all segments of the U.S. solar industry will increase. 8. Rooftop solar companies will clean up their act when it comes to fair marketing practices towards consumers. 9. 2016 will not be the year of residential battery storage – although we are gradually getting closer to when battery storage becomes a mainstream product. 10. Product differentiation will become more important than ever as pricing for commoditized products is forced down. For details on how these predictions may impact your segment of the solar business, please Listen Up to the Energy Show on Renewable Energy World.

After driving a diesel truck for the last month and a half it is my opinion that the diesels are dead. Mercedes’ BlueTec system is expensive and incredibly inconvenient. And VW’s TDI system basically doesn’t work without fraudulent software. The reality is that gas vehicles are cleaner and cheaper, and electric vehicles (at least for cars) are the future. Diesel engines have some big benefits: they are more efficient, more durable, and get better miles per gallon. But diesel fuel is more expensive, and the engines emit soot (black smoke), which is a restricted pollutant. To clean up the soot, the BlueTec system requires you to add a few gallons of DEF every three or four tanks. DEF is Diesel Exhaust Fluid, and is almost impossible to find at night on the interstate in the rain. Until VW’s house of cards collapsed, diesels seemed competitive with gas engines. Although there are definitely benefits to diesels, there is no doubt in my mind that gas engines and EVs will prevail for cars. The inconvenience and expense of diesels may be OK for trucks -- at least until batteries get cheaper. For more about the efficiency and costs of diesel and gas engines -- and how they compare to future EVs, please Listen Up to the Energy Show on Renewable Energy World.

After driving a diesel truck for the last month and a half it is my opinion that the diesels are dead. Mercedes’ BlueTec system is expensive and incredibly inconvenient. And VW’s TDI system basically doesn’t work without fraudulent software. The reality is that gas vehicles are cleaner and cheaper, and electric vehicles (at least for cars) are the future. Diesel engines have some big benefits: they are more efficient, more durable, and get better miles per gallon. But diesel fuel is more expensive, and the engines emit soot (black smoke), which is a restricted pollutant. To clean up the soot, the BlueTec system requires you to add a few gallons of DEF every three or four tanks. DEF is Diesel Exhaust Fluid, and is almost impossible to find at night on the interstate in the rain. Until VW’s house of cards collapsed, diesels seemed competitive with gas engines. Although there are definitely benefits to diesels, there is no doubt in my mind that gas engines and EVs will prevail for cars. The inconvenience and expense of diesels may be OK for trucks -- at least until batteries get cheaper. For more about the efficiency and costs of diesel and gas engines -- and how they compare to future EVs, please Listen Up to the Energy Show on Renewable Energy World.

Over the past few months you may have seen or heard a continuous stream of ads warning about the imminent demise of the solar Investment Tax Credit and California’s Net Metering program. Good news for 2016: both of these programs have been extended. The incentive panic is over (for now). The solar industry – as well as homeowners and business owners – can concentrate on a steady transition to clean rooftop solar power. As a result of the hard work at solar advocacy groups SEIA, Vote Solar and CALSEIA, the ITC is good through 2021 (30% in 2016-2019, then 26% in 2020 and 22% in 2021). And unlike their brethren in Nevada and Hawaii, the California Public Utilities Commission has made a preliminary decision to extend retail net metering, albeit at a slightly reduced rate. But there is still real urgency to go solar: the sooner your installation is complete and you flip that switch to “on,” the sooner you’ll reduce your electric bill. Granted, installation costs are likely to be a little lower in future years, but electric rates keep going up and the “cost of doing nothing” will only grow as you pay your monthly electric bill. Many states still have rebate programs and caps on net metering – so check with your local installer to find out the status of incentives for your home or business. For more about the extension of the ITC and local net metering programs, please Listen Up to the Energy Show on Renewable Energy World.

If only all our New Year’s Resolution were this easy. Luckily, saving energy is easier than losing weight after gorging over the holidays. And the best part is that you’ll see results fast! Energy and fuel costs are lower than they have been in years: gasoline is about $2/gallon, natural gas hasn’t been this inexpensive since 1999, and electricity costs are in the range of $0.10/kwh when generated by solar or wind. But even though these energy prices are relatively low, we live a much more energy-intensive lifestyle -- so we all consume more energy per person than any previous generation.. To get the New Year started right, here are ten tips for reducing your energy consumption in 2016. 1. If it’s raining, turn off your outdoor watering system 2. Drive a stake through the heart of your vampire electric loads 3. Replace all of your incandescent bulbs with LEDs, including your outdoor lights 4. Make sure you have a 7 day or smart thermostat, and that it’s working properly 5. Fix the weather stripping around your doors and windows 6. Install rooftop solar; wash your panels if they are very dirty 7. Clean your heating/cooling filters and check your ducts for leaks 8. Buy an EV 9. Install a variable speed pool pump and cut back on the hours of operation 10. Change your electric rate to a Time of Use or Electric Vehicle rate It’s surprisingly easy to reduce your energy expenses in 2016, while at the same time improving our environment. For more details, Listen Up to the Energy Show on Renewable Energy World.

Whenever I land in a city I can’t help noticing how few -- if any -- commercial rooftops have solar panels. Historically, there have been two reasons why commercial solar hasn’t taken off as quickly as residential solar has: complicated financing and high costs for equipment. But now, with more commercial financing options and lower prices for equipment, simple paybacks for commercial systems are often fewer than five years. That’s why big national companies such as Walmart, Safeway, Costco and Home Depot are adding rooftop solar systems to their retail and warehouse buildings. If you own, manage or have a long term lease on a commercial building -- especially in a location where electric rates are high -- you should take a serious look at rooftop solar. Please Listen Up to this week’s Energy Show on Renewable Energy World for an overview of the process, equipment, and key considerations for commercial rooftop solar installations.

$400 billion dollars. That’s how much money is spent every year on electricity in the U.S. It’s a huge industry. But not for long, because new solar and storage technology can provide many of the same services for a fraction of the price. The threat isn’t new solar technology, but the ways in this technology is being deployed and paid for. Historically, utilities generate and distribute electricity, and charge customers for their usage. Indeed, about 5 GW of utility solar will be installed in 2015 -- more than the commercial and residential sectors combined. But the price of electricity to residential and commercial customers continues to increase. Even though utility scale solar is the cheapest new generating source of electricity, customers are not benefitting. To make matters worse, customers can install their own solar power plants and generate their own electricity for less than the utility charges. The centralized monopoly utility business model must change because electricity can now be generated, consumed, stored and even distributed on a local level. John Farrell, senior researcher with the Institute for Local Self Reliance (ILSR), focuses on issues surrounding renewable energy, utility power, and energy-generation. Please join me on this week’s Energy Show on Renewable Energy World as John shares with us his insights on how utilities are trying to adapt to the new world of distributed generation.

Mankind has been in an energy transition ever since two cave-boy scouts rubbed two sticks together and created fire. Although the world’s economy is currently powered by fossil fuels, renewable power sources (primarily wind and solar) are now cheaper than fossil fuels for many applications. This renewable power tipping point implies that a 100% renewable society is feasible, and may be here sooner than we think. But there are many naysayers -- usually from the fossil fuel industry. They claim that renewable power is still too expensive (ignoring direct and indirect subsidies to fossil fuels), that new technology can make fossil fuels cleaner (the myth of clean coal and VW’s TDI diesels), or that we need to go slowly in this transition to prevent a worldwide economic calamity (really just a loss of fossil fuel company profits). Fortunately, these claims are easy to refute with the right data and analyses. My guest this week is Clint Wilder, senior editor at Clean Edge -- a leading advisory firm specialized in reporting the latest in clean energy technology, economic developments, and market trends. Clean Edge recently released a report entitled “Getting to 100, a Status Report on Rising Commitments Among Corporations and Governments to Reach 100% Renewables.” This report focuses on the rapid progress that corporations and governments are making to deploy renewables and related technologies, including energy storage, more efficient buildings and an updated electric grid. Please join me on this week’s Energy Show on Renewable Energy World as Clint explains our progress towards this 100% renewables, and discusses some of the opportunities and roadblocks that we will experience as we make this transition.

I’m wading into an opinionated minefield. We’re not supposed to talk about religion or politics in polite company. But we already did a show on the Pope’s Environmental Encyclical. And politicians are blasting the airwaves with their energy views in the run up to the presidential primaries. So this week’s show is about the politics of clean energy. We have a lot of recent material to work with. There is Obama’s Clean Power Plan, Candidate Clinton’s plan for 500 million solar panels by 2021, and plans from various Republicans reflecting their view of energy and the environment. As usual, the parties are diametrically opposed regarding both the problem and the solution. Both parties are in favor of the environment (apple pie, too), more jobs, cheaper electricity and better economic conditions. But that’s about all they agree on. Republican politicians are adrift on that long river in Egypt when it comes to global warming; hence, their solutions are unlikely to solve the real problem. Democratic politicians are swimming upstream against another river - a river of fossil fuel money. For two different perspectives on our clean energy future, please Listen Up to this week’s Energy Show.

Even with the anticipated El Nino weather conditions on the west coast, the drought in California will continue. Experts say it will take three or four years of very heavy rainfall to replenish above ground reservoirs, and many more years of above average rainfall to refill underground aquifers. The Governor implemented a mandatory 25% water cutback, and people responded with an average 31% reduction. Brown is the new green when it comes to lawns (urban use accounts for 21% of water consumption). Unfortunately, farm output has taken a big hit -- fields are empty and orchards are filled with dead trees (agriculture accounts for 79% of water consumption). But it has been difficult for people to conserve when they do not know what water costs. Anyone who drives a car knows how much gas costs per gallon -- but very few people know how much water costs per gallon. Last year here in the San Jose area our household water cost $0.004 per gallon (about half a penny). We cut our usage in half, but our water rates still more than doubled to $0.009 per gallon (almost a penny). Painful as it may be when it comes to something we take for granted, people respond to price signals. As water rates doubled, consumption dropped. The same behaviour applies to other commodities that we buy -- most noticeably gasoline and electricity. For more about the effect of higher prices on California’s water usage, please Listen Up to this week’s Energy Show.

Recently, a solar worker in Hawaii fell off a roof to his death. Construction work is one of the most dangerous activities, and installing rooftop solar presents additional fall and electric shock hazards. It is up to owners and managers of solar companies to insist that their workers follow appropriate safety procedures -- even though these procedures may be inconvenient, time consuming and expensive. Proper safety procedures can prevent tragedies like this. If you do rooftop installation work, we have three specific suggestions. First, install two or more permanent roof anchors on every job. These anchors are inexpensive (about $15 each), leak-proof, and easy to install. With these anchors installed there is no excuse for your workers not to use ropes and harnesses. Second, follow all of the applicable OSHA procedures for solar contracting, including ladder safety, protective gear, electrical safety, and emergency procedures. Third, consider getting a free OSHA safety inspection audit. Although inconvenient, these audits will help identify gaps in your company’s safety procedures. Solar safety does not end when a system is installed. Homeowners must also be aware of the proper way to clean their panels and check for debris or problems with wiring. Although we're not aware of a serious fire from a properly installed rooftop system, there have been incidences of squirrel or bird damage to wiring, and occasional arc fault problems. By design, rooftop PV systems have many built-in safety features to prevent injury or property damage -- and local jurisdiction inspections are a good final step to help ensure the system is installed safely. For more on homeowner and installer solar safety, please Listen Up to this week’s Energy Show.

$0.25/kwh - what a typical California homeowner pays for electricity (based on current PG&E rates at the U.S. average of 12,000 kwh/yr) $0.12/kwh - what a typical California homeowner pays for Net Metered rooftop solar electricity (based on a 5 kw system installed at $3.75/watt) www.SaveRooftopSolarCA.com - what you can do right now to prevent utilities from killing rooftop solar Rooftop solar electricity is half the price of utility-supplied electricity. No business can survive when their product is that overpriced. EXCEPT a monopoly. As a monopoly, utilities are permitted to set their electric rates so that they earn a minimum 10% profit. Their reaction to cheaper rooftop solar is to bombard the public with misinformation (solar is for wealthy people), fear mongering (more solar will cause the grid to collapse) and dirty tricks (trust us, new electric rates are actually good for consumers). To make matters worse, this advertising and lobbying is paid for by electric ratepayers themselves. Utilities haven’t been able to make rooftop solar illegal (although they have tried); instead, they have insidiously reduced the benefits of Net Metering by increasing fixed charges and reducing Net Metering rates. In Hawaii, Arizona and Nevada these attacks against rooftop solar have been so effective that many solar companies have laid off employees. Effectively, residential and commercial electric rates have gone up. California is the next big battleground for rooftop solar. This battle is being fought at the California Public Utilities Commission (CPUC), where utilities want to eliminate Net Metering. Utilities are proposing solar-only fees and charges that will double the paybacks for new customers (including existing customers who want to expand their systems). Luckily, with 250,000 rooftop systems already in place and over 54,000 people working directly in the solar industry, California can resist this utility bullying. The California Solar Energy Industries Association (CALSEIA) is the focal point for continuing the growth of affordable solar in the state, and Bernadette del Chiaro is CALSEIA’s Executive Director. Please Listen Up to this week’s Energy Show as Bernadette explains the tactics that utilities are using, the reasonable arguments for continuing with retail Net Metering, and the actions that every reader and listener can take to support the growth of the rooftop solar industry. Quick Tip: click on the link at www.SaveRooftopSolarCA.com to add your name to the rooftop solar petition.