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.

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…

Smart Grid: It Isn’t As Simple As You Think

By now, most of us know that the demand for solar continued to rise during the recession. Demand continues to grow throughout the world. A couple of days ago, the SEIA published The US Solar Industry Year in Review 2009. The opening sentence of the report stated: ”Despite the Great Recession of 2009, the U.S. solar energy industry grew— both in new installations and employment.” Reuters reported that the “industry surged on incentives.” In February, Todd Woody provided details of how California and New York utilities are playing a key role in solar growth in the New York Times Green Inc. blog. “Over the past few weeks, some 1,300 megawatts’ worth of distributed solar deals and initiatives have been announced or approved. At peak output, that is the equivalent of a big nuclear power plant” wrote Woody. Yes, it’s only one big nuclear power plant, certainly not “As Big As Coal” which needs to be the rallying cry of the Solar Revolution, but, nonetheless, in the midst of the financial meltdown, it’s something.

So, OK, we are moving in the right direction over the last several weeks…but we’ve got a long way to go. There is so much do to on so many levels. As much credit as some will give to the utilities, the truth remains that the Solar Revolution is a grassroots cause. The efforts of the cause as a whole depend on each and every one of us doing what we can to educate and promote the beneits…even the imperitive…of creating solar As Big As Oil. We cannot settle for less. Along these lines, in order to be most effective, we’ve all got to understand the magnatude of unresolved issues that stand in the way of our goal.

In the Solar Industry Magazine (April 2010, Volume 3, Number 3~it is only available via “deadtree media”) that I recently receved, Michael Coddington, Kate Anderson and Benjamin Kropski did a great job of summarizing a New York City case study assessing grid-level effects of distributed photovoltaics. The article identifies many of the technical issues that stand in the way of rapidly connecting distributive PV to the utility networks. On the front page of the same Solar Industry issue, Bob Powell presents a look at utility-scale financing components. I highly recommend these two front page articles. The NYC Study article describes that utilities use two types of electrical distribution systems. By far the most common is these is the simpler radial system, which is designed for electricity to go just one-way. In such a distribution system, a lot of hardware and software is devoted to detecting and protecting against “reverse power flow,” which is “indicative of an upstream supply feeder fault.” Needless to say, this is not good from a net metering and feed-in-tariff point-of-view. The article also discusses the problems caused by the highly variable nature of solar energy supply and the importance of the development of solutions that will make this source of energy more reliable (such as battery technology or eventually a national or worldwide smartgrid). The front page companion piece reminds us that regulators and legistlators are driving the utilities to do the right thng, “either through mandates such as enacted renewable portfolio standards (RPS)…or via less formal expectations that a utility has in response to climate change.” Failure to meet RPS standards will hit the utilities where it hurts them most: earnings. The challenge for the utility becomes how to finance all the change required to achieve the RPS. There is so much great information is these two Solar Industry Magazine articles.

There was also a separate blog by Tom Raftery in the greenmonk blog. First, I want to say, that this blog is one great example of what we each can do to do our part for the Solar Revolution. Tom’s catchy sub-heading says “green from the bottom up; sustainable from the top down.” On April 16, Tom writes about “Are Utility Companies Ready for Full Smart Grids?” Tom takes a look at the IT angle to the new way of doing business. He also has a video interviw with Chris King, the Chief Regulatory Officer of eMeter. Tom writes that he commonly asks “What is a Smart Grid? Almost all the interviewees talk about an infrastructure capable of full end-to-end, two-way communications. That is, communication from utilities down to the appliance level in-home, and from appliances back up to utilities.” Tom probes the challenges that smart grid poses to IT, appliance development and, probably most importantly, consumer education.

So, with this kind of perspective, how are we doing so far with our Big as Oil goal? Well, in a recent Greentechmedia research article titled “Can the U.S. or California Institute a Feed-In Tariff?” Eric Wesoff writes that the RPS in California has failed. “And the U.S. solar market remains thwarted by tight financing, fragmented policies, and spotty permitting, as well as restrictive access to public lands.  Arguably, policy trumps technology in matters of energy, and the U.S. has a long way to go in developing a favorable energy and solar policy.” Wescoff’s article covers an April 14 presentation made by Ted Ko of the FIT Coalition. “California’s renewable energy piece was 14 percent of the energy mix in 2003,” cited Ko in his speech to the Silicon Valley Photovoltaics Society, ”and actually dropped down to 13 percent in 2008.  Further, he asserts that there is little chance that will California achieve its goal of 20 percent in 2010 and 33 percent in 2020.”

The answer, according to Ko, is getting a feed-in tariff imposed in California and in the U.S.  Ko defined the feed-in tariff as a predefined, pre-approved PPA between renewable energy generators and utilities.  He called it “the most effective policy in the world for getting cost-effective renewable energy online. It’s simple, fair and effective.”

As they say, “the Devil’s in the details.” There are so many details to research and understand. We need to continue to feed one another with newly developing information and ideas. Twitter, Facebook and Linkedin are great communication tools for this. So are invididual, company and public blogs. Write your own; subscribe to this one and others. WholeSolar will be starting a blog list. Let’s all share what we’re discovering and believing. Find a solar or renewable energy meetup group in your area. If you can’t find one, start one. Please be a part of Vote Solar and other similar organizations, where our numbers create “power to change power.” And please encourage other to join you in signing the Solar Bill of Rights. Most importantly, take action (if you have not yet) and increase your action (if you have).

Duke Energy Model: It Makes Too Much Sense

We just got back from an RFP Conference with Southern California Edison, followed by the InterSolar trade show. Aside from keeping us busy, the two events were thought-provoking.

At the SCE RFP Conference, I learned a lot about the limitations that current transmission capacity has on expanding solar and wind power. SCE intends to purchase 250MW of renewable energy from private sources under PPA arrangements. one of the major criteria in awarding contracts will be interconnectivity. Much of their power grid is pretty close to being maximized. At the Intersolar show, we saw many, many German, Spain and China companies who are highly motivated to break into the U.S. solar market. One exhibitor had taped a handwritten sign that said “Solar Panels $1.50/Wp.” Although the name of the exhibitor did not sound like that of a solar company, it was an example of how competitive things are getting for the “have nots” in the industry.

All of this got me to thinking about the pilot rooftop program that Duke Energy announced several weeks ago, where they plan to rent rooftops of their customers and install PV solar modules, thereby creating a distributive solar energy capability. There are other utilities around the country who have announced similar programs. It makes a lot of sense. And while they’re at it, why not take advantage of potential new entrants into the U.S. market, thereby keeping the cost down?

There are very good companies, such as CEEG and Best Solar, offering top quality solar panels, offering insured warranties, who would make compelling bids to get their panels on the Duke Energy or other utility rooftops. And there are companies like WholeSolar, who could facilitate these types of deals and help to select qualified installers at the best prices to do the installations.

Gathering of the Tribe

Do you feel it? It is a feeling that starts in each one of us. It’s a feeling of urgency; a feeling of expectancy; a feeling of excitement. Many of us who seem to be very like-minded are finding one another on the Internet through social networking or in the business community at get-togethers and functions. We are a part of the inevitable change of our times. The solar power industry has been around for a long time, as have some of those people being drawn together. Solar has always been “cool,” but it’s also been mostly impractical, unaffordable or just plain too technical — at least, that’s the way it’s been for me until the last three years. For me, it started with a viewing of An Inconvenient Truth in late 2006.

My initial response after viewing An Inconvenient Truth was more about Al Gore and the 2000 Presidential election. I was haunted with the thought of how much different the world would be today if the Supreme Court had gone the other way. Today I believe that sometimes things must fall apart before they can fall together. Anyway, after viewing An Inconvenient Truth, my pathway to solar began by passionately working to convince Al Gore to again run for President. I was one of the hundreds of thousands of “Goristas” carrying the Draft Gore banner though 2007. Then, after the call came from Gore’s office asking that we stop, I shifted my passion to the Biden campaign and then to the Obama campaign. In October 2008, with the election assured, I attended the solar tradeshow in San Diego.

Wow. Walking the aisles of the solar show took me back to some of the Internet tradeshows I attended more than a decade before. The aisles were jammed and there was a palpable air of confidence among the exhibitors. Speaking with the folks who were putting on the event, I found that they had turned away nearly 500 exhibitors, having only contracted for space for about 425 exhibitors. I immediately realized that my passion for solar had been awakened at the same time I got swept up in the Presidential campaign. I was excited to have found a new channel for my passion.

Since then, I am encountering others who have a similar passion for solar. There is a solar tribe. There’s Ken Oatman who was previously involved in the distribution industry and started up a top-notch solar installation business in the Boulder-Denver area. He’s embracing microinverters as the best way to go in designing residential solar solutions. Then there’s Tor Valenza, who many will know as “Solar Fred.” Tor has been in the industry for nearly 30 years and is one of the leaders of our tribe. I totally relate to the 1BOG people, who, like me, were walking neighborhoods for Obama. Today, they are walking neighborhoods for solar power. And then there is my good friend Michael Powers and his partner Kent Harle. They are the founders of one of the best solar installation firms in California, Stellar Solar and the two of them demonstrate to me constantly that solar power is a bi-partisan proposition that we all can agree on. This is but a small cross-section of the solar tribe. Some of our tribe have been here awhile. Some are just arriving. We are coming together at Facebook, Twitter, Linkedin and in our respective communities, just to name a few examples.

Each of us plays a different role – installer, wholesaler, consultant, financier – but together we all have the same job to do: to change the way the world thinks about solar. Coming from the Internet/software development industry, I like to say, “We need to put a better GUI on solar power.” Solar needs a better user interface. I believe it is the mission of our tribe to do this. Within our circles, we are just “preaching to the choir.” Together as a choir, we need to get the word into mainstream and change the paradigm from that of purchasing solar panels to purchasing solar power. Together we need to make acquiring solar power as easy as signing up for cable and DirectTV. Together we need to tear down the walls preventing access to solar power. We must tear the walls all the way down.

So the tribe is being called. Many have heard the call. It’s about cooperation, not competition. It’s about a movement where we can express our passion and earn a living along the way. So, when you see someone’s blog or Tweet or an article that forwards our message or stimulates more creative thinking, pass it on. Together, let’s make history.