Solar Revolution: Pushing Utilities Into Action

Old 'energy' America is out of gas.

The renewable energy revolution and, specifically, the solar revolution, is on a charge like never before… full charge. It’s a trumpets- blaring kind of charge. The status quo, aka utility companies, are having a difficult time adapting and adopting to the surge in demand. Most likely with the onset of higher energy costs, nuclear meltdown and awareness on price decreases in solar. The adoption rate has occurred at such a high level that LA Department of Water & Power (LADWP), released a statement explaining how they are changing their solar rebate policy because:

A)     The demand has overextended their fiscal budgeting by almost 300%, and;

B)      Citing safety concerns since they don’t have the bandwidth to inspect more than 80% of the installs in a timely fashion.

SB 1 passed in 2006 (coined “The Million Solar Roofs Bill”), requires state municipal utilities to create their own solar rebate program for their utility ratepayers, among other mandated components & enforcement directives through 2016.  The utility companies across the country have typically lobbied against pro-solar legislation, like SB1, so there is natural skepticism as to LADPW  motive of “temporarily” suspending their rebate program.  LADPW isn’t the first utility to maneuver this direction, other utilities in pro solar states like Colorado & Florida have take similar evasive action, too. Regardless, of honest vs. dishonest intentions, the one powerful statement this is making is that Solar ubiquity in America Is for real! Demand/solar adoption rates are increasing, and supply is really the biggest threat to getting the pricing to the sweet spot of making adoption as mainstream as super sizing your french fries.

Pricing at All Time Low

Since 2008, WholeSolar has been bringing solar buyers together to increase their buying power. The result is lower wholesale pricing. It’s like “Groupon” for solar. Pricing has dropped extensively since 2008, but frankly there has never been a better time to buy solar than right now – even if all the utilities who are mandated by State approved rebate programs, revolted.  Literally, at the publication of this post we have negotiated unheard of pricing on behalf of the WholeSolar buying group.  Consumers, are eating this up, given that solar, typically returns that cost within a 6-7 years of savings. More importantly, the home owners “cost-of-doing-nothing” is staggering. Nobody knows where pricing will go later this year and on into 2012.  Even, with a pricing flux, the fact is that more states are going to be passing bills like SB1, and the momentum of the energy revolution in America is going to continue. The solar surge has the momentum that is going to help recharge the economy, and not be stopped by a utility lobby, or a presidential election, unless they want to be on the wrong side of history.

With pricing being at this level of a low & demand increasing to an all time high, utilities like LADPW are going to be forced to seriously review their rebate programs, refine them and meet the demand. Currently, LADPW is budgeted $30 million for 2011 rebate programs, and has confirmed requests for $112 million and we just started the 2^nd quarter of the year! Granted, this reveals that LADPW, most likely under budgeted their rebate program to barely meet the law of the California. But, it tells a terrific legislative success story, and more importantly paints a great economic picture of how solar adoption is slowly changing the way Utilities do business.

What the BP Gulf Oil Spill Means to BP Solar

[THIS BLOG WAS UPDATED ON JUNE 16, 2010 - Please click this link for access]

The recent Deepwater Horizon oil rig explosion in the Gulf of Mexico left eleven dead and wide ranging debate about the future of offshore drilling. Clearly the full extend of damages has yet to be assessed and BP has agreed to pay the costs of the leak catastrophe, but ironically, one of the interesting questions coming out of this mess is what will become of BP Solar?

While BP Solar has been one of the major players in the photovoltaic solar panel industry over the past several years, rumors have been flying around the past couple of years that BP would be exiting the solar space. All along BP has held steadfast to its commitment to BP Solar, even while cutting 600 jobs last year. So, how will negative publicity affect BP Solar strategic partner relationships? BP Solar’s relationship with Home Depot comes to mind, as an example. BP Solar panels are the only solar panels currently offered to Home Depot customers. How will consumers react to the negative BP publicity? How much will BP Solar sales take a hit? Will it matter anyway, in the midst of a slump in retail traffic?

On the other, if BP remains committed to solar, does BP Solar represent a public relations opportunity to put a more positive face on who they are and where they are going? They are, after all, the only Big Oil company in the PV market. They have been and continue to be a major sponsor for the American Solar Energy Society (ASES) and the Solar Power International trade shows.

Installers that I have been speaking with are concerned. Many are taking a wait-and-see attitude, buying panels from other manufacturers while they wait. What is the extent of brand damage and will it be overcomable? And if the rumors of the past about BP getting out of the solar business had no real basis in truth, will the oil spill push the old rumor into the reality category? It’s ironic that the only Big Oil company actively participating in the PV solar arena, is the one who caused unimaginable damage from the “Drill-Baby-Drill” side of its business. It’s ironic that the a catastrophe involving the energy of the past could have such a negative effect on the energy of the future, but such is life when your corporate name is really British Petroleum.

Here’s to hoping that, in the end, BP Solar, Home Depot, BP solar’s partners and installers all overcome this unfortunate setback.