Earth Day 2011: PG&E – Change or PR Charade? (Part 3)

I’m hanging out at Asilomar, surrounded by nature. With Earth Day itself in the rear view mirror, I guess I’m basking in an Earth Week glow which began a week ago at San Diego’s gigantic EarthFair and has continued here at one of my favorite places in the world. It seems that every newspaper I pick up has another article pertaining to the Solar Tribe. In Part 1, I wrote about National Solar Quote Month, the EarthFair in San Diego and Lawrence Berkeley National Laboratories’ new study that shows how much value solar adds to solar home prices. In Part 2, I wrote about the benefits of group purchases of solar (exactly the way we do it at WholeSolar) becoming more broadly understood and put into practice. Here, in Part 3 of the Earth Day blogs, we’ll take a slight departure and suspend judgment as to whether this subject calls for Solar Tribe celebration.

Earth Day afternoon was spent at the Monterey Aquarium. What a wonderful place of learning, most of which is interactive in a way that captivates attention and leaves the child or adult with knowledge about the ocean, its living creatures and the climate change challenges it faces. We ended up spending several hours there. We could have spent another day there, as well. If you have not yet experienced the Monterey Aquarium, I highly recommend putting it on your list. As we left the aquarium and walked down Cannery Row, I saw the headlines of the Earth Day edition of the San Francisco Chronicle: “Pacific Gas & Electric CEO Resigns.” My first thought was, “It’s about time. What took him so long?” Then I bought and read the paper and started thinking.

Pacific Gas & Electric Corp.’s top executive is stepping down with a $35 million retirement package following a “challenging year” that included a gas pipeline explosion in a San Francisco suburb that killed eight and destroyed 38 homes, the company announced Thursday. Chairman, chief executive and President Peter Darbee will retire on April 30, PG&E said in a statement.

$35 million for a voluntary resignation. Hmm. I wonder what Californians would think of that, particular the affected PG&E ratepayers. We didn’t have to wait long to read a response (from mercurynews.com):

With outrage growing over PG&E’s plan to award outgoing CEO Peter Darbee $35 million as he retires under a cloud of controversy, Gov. Jerry Brown said Friday that ratepayers should not be required to pay any of Darbee’s retirement package.

“At a moment when so many Californians face foreclosure, unemployment and depressed wages, it’s about time for corporations to rein in executive compensation,” Brown said. “At the very least, California ratepayers should not be footing the bill for this.”

As Brown weighed in on the controversy, however, the California Public Utilities Commission, which regulates PG&E and other utilities, acknowledged late Friday that ratepayers will pick up nearly one-third of the bill for Darbee’s retirement.

It turns out, that with recently issued stock options, Darbee’s actual payoff will be nearer $40 million. I guess this makes up for the $2 million cut in pay that Darbee was forced to take for being CEO during such a tough year for PG&E as 2010. In addition to the San Bruno disaster, Darbee supposedly led the a $45 million spending spree on a statewide initiative to hamstring local competition to PG&E’s power business and followed that losing debacle with a very clumsy roll out of wireless Smart Meters. So, are we to believe that with Darbee gone that PG&E will “straighten up and fly right?”

The irony of all of this was that Peter Darbee had such a promising start as PG&E’s CEO. He was billed as an outsider, a guy with “fresh eyes.” The San Francisco Chronicle wrote it well today in its editorial:

There were striking and bold steps at the start such as his conviction that climate change was real and that PG&E should adopt policies on renewable energy to meet the problem.

What happened? Was the initiative decision his or that of the PG&E Board of Directors? Was Darbee really the problem or was he one of two sacrificial lambs? So far, the PG&E CEO and COO have resigned. Its President, Christopher Johns and its Board remain in their entirety. One of the Board members, Lee Cox, will serve as Interim Chairman and CEO. Cox has been on the PG&E Board for 15 years. According to the Chronicle, speculation is that the search for Darbee’s permanent replacement is nearing completion. Michael Peevey, head of the California Public Utilities Commission, is encouraging that Darbee’s permanent replacement be someone with deep experience in the utility industry. State Assemblyman Jerry Hill, who represents San Bruno, has a totally opposite point of view:

“It has to be someone from outside, someone who can come in with no baggage,” said Assemblyman Jerry Hill. ” The utility industry and the regulators seem to have an incestuous relationship.”

Clearly, it remains to be seen whether Darbee’s resignation is good news or not. Earth Week certainly has not been uneventful.

Earth Day 2011: There Is A Lot To Celebrate (Part 2)

Today is the the 40th anniversary of Earth Day: Earth Day 2011. Earlier, in Part 1 of this blog, I shared about hanging out at Asilomar, reflecting on the recent EarthFair, the last week of National Solar Quote Week and reading many wonderful articles about our industry in the local newspapers. In Part 1, I wrote about reading yesterday of a new study that documents how solar boosts home values.

This morning, I picked up the local Monterey newspaper, the Monterey Herald. It carried an article by Tracy Seipel of the San Jose Mercury News titled, ” ‘Solar Group Buy’ Program launched in California.” This one warmed my heart, because its about EXACTLY what we’ve been doing at WholeSolar for the past couple of years. It turns out that the article was written weeks earlier, but had finally found the its way, through syndication, to Monterey. While the concept is not new (see One Block Off the Grid), it certainly is important enough to repeat again and again.

What the City of San Jose has done is develop a pilot program, with the help of a $100,000 grant from the Federal government, that encouraged city workers “to band together to increase their buying power and simplify the sometimes confusing process of going solar.” They have named the program “SunShares.” The article indicates they have also “launched a new program that will allow businesses and governments throughout the region to take advantage of similar “solar group buys.” The goal in all of this is simple: to bring the cost down, generate jobs and demonstrate how simple it is to go solar.

“It’s the Groupon of Solar”

When I Googled the article title, I found that it is being picked up in strong numbers through syndication across the United States, which is great as far as the goal of Solarizing America. Rafael Reyes, director of the Bay Area Climate Collective put like this:

“It’s the Groupon of solar. Our challenge is to take a good model like San Jose’s and replicate it throughout the region.”

I love the comparison of SunShares to to the extremely popular online coupon program called Groupon. WholeSolar has been championing a version of the SunShares program to both independent installers, as well as homeowners, long before San Jose launched SunShares. It just makes sense. No one of us has the buying power of all of us. Together, we can reduce costs. Together, we can simplify the process of going solar. And in the process of doing so, we will create jobs.

Together, let’s solarize America!

To Be Continued…

Earth Day 2011: There Is A Lot To Celebrate (Part 1)

I’m sitting here at the Asilomar Conference Grounds, one of my favorite places on Earth, enjoying pure nature surrounding me. And it’s the forty year anniversary of Earth Day. For those of you who have not experienced Asilomar, it is located out on the end of the Monterey Peninsula (between Monterey and Carmel). It’s a place where it seems as though mountains meet the sea and wildlife is plentiful. Deer, raccoons, squirrels and blue birds are friendly, and so are the people who stay here. Reading the local paper these past few days has reminded me that the Solar Tribe has much to celebrate.

WholeSolar at EarthFair 2011

First, we’ve got a week to go for our National Solar Quote Month. April has been very good to many of us. WholeSolar was one of many exhibitors at San Diego’s annual EarthFair last weekend. The fair, which is held at the vast Balboa Park, drew more than 70,000 visitors. Needless to say, WholeSolar had a great opportunity to talk about solar, solar quote month and set many appointments with curious homeowners. This was my second time as an exhibitor at EarthFair. I love the people who attend. Mix that with National Solar Quote Month and the experience was a clear winner.

Yesterday I opened the San Francisco Chronicle and read a great article titled Solar Panels Boost Values. In a nutshell, the article reaffirmed what many of us in the industry already knew from a financial valuation perspective, but couldn’t put our arms around  any third party verification. Well here it is:

“Shell out the money to install solar panels on your home, and you’ll probably recoup that investment when it comes time to sell the house. You might even make a little profit. A study to be released today by Lawrence Berkeley National Laboratory found that solar boosts the value of homes, both new and old,” writes David R. Baker, Chronicle staff writer.

In addition, the home owner will get the benefits of reduced or even free electricity while living in the home. We’ve always known that solar increases home values in a manner greater than any home remodeling work does, we just couldn’t point to objective proof. Now we can. And, if you ask me, the study, which analyzed home sales between 2000 and 2009, might still come up short on the real increase in value that can be negotiated at arms-length by an informed home buyer and seller. To the home buyer, the value is derived from the free electricity received as a result of buying a solar home. The realistic question to be negotiated between the parties is the length of time that the buyer will receive this benefit. For example, quality solar panels and inverters will generate free electricity for many years, with minimal maintenance. And what about valuing increasing utility rates during this free electricity period?

The Lawrence Berkeley National Laboratory study documents that on 2,000 home resales, sellers at least recouped the cost they paid for their solar system, and then some. Perhaps it reflects the theory from the buyer’s point-of-view that, notwithstanding how much free electricity the buyer will save, that the maximum amount most buyers are willing to assign to solar is the cost that they would incur installing it themselves. Since the sale and purchase of a home IS a negotiation between two parties, if you are the seller with a solar home, make sure you are represented by a real estate broker who fully understands the benefits and has the ability to present them in terms of present values. If you do, I’ll bet your results will be better than indicated in this new study.

Having said that, it’s wonderful to have the new study as “baseline” third party evidence about the value of reselling a solar home.

To be continued…