Solar Solutions

NerdWallet, a financial advice blog, recently reported on a study about the solar industry and market in all 50 states to determine which ones provided the best conditions for homeowners who want to install solar panels on their rooftops. There are a number of factors that guide someone’s decision to go solar, and while other states may provide certain advantages such as more sunlight or better tax incentives, it’s important to aggregate all of these measures to determine which one produces the ideal conditions for a photovoltaic (PV) installation.

NerdWallet used four main criteria in determining the best state for solar power:

Based on scoring for all four of these measures, California leads the way with its favorable regulatory, tax and natural environment that combine to create ideal conditions for any customers who are planning on going solar.

Fourteen schools in the Jefferson Elementary School District (JESD), located in Northern California just south of San Francisco, will be going solar in an effort to stabilize finances and dramatically reduce its carbon footprint.

The San Francisco Examiner reports that this $12 million project will save the district $17 million over the next 25 years, an important accomplishment given the fact that so many education institutions have suffered from major budget cuts and limited financial resources over the last several years.

The solar installation will provide clean, renewable energy to 14 schools while also producing energy for the district’s administrative building and central kitchen facility. This will reduce the amount of electricity that the district purchases by 85 percent. In addition, the use of California solar energy will prevent 1,000 metric tons of carbon dioxide from being emitted.

Funding for the project came from a number of sources, mainly a local ballot measure that authorized the district to borrow money to pay for energy improvements, as well as appropriations from the California Solar Initiative (CSI).

Additionally, the district has designed a curriculum that will promote solar energy to its students and educate them about the virtues of solar technology. Teachers will be given resources to help their pupils better understand how this move will benefit their schooling, and each school’s main office will be equipped with an LCD display showing data on energy production.

The JESD’s solar project serves as an excellent model for any school administrators who are hoping to implement a similar effort to help their district become more energy independent and financially stable.

Due to a sharp decrease in the price of solar panels, the cost of installing solar energy in California continues to fall. A new report from the Lawrence Berkeley National Laboratory, located at U.C. Berkeley, found that the per watt cost of small rooftop photovoltaic (PV) systems with less than 10 kilowatt capacity declined nationwide from $12 in 1998 to $5.30 in 2012.

In California, the price per watt of installation for small systems dropped from $6.40 in 2011 to $5.70 in 2012.

The report credited 80 percent of these price reductions to the fact that solar panels themselves are becoming cheaper. Between 2008 and 2012, panels dropped by $2.60 per watt. Other factors, referred to as “soft costs” which include employee wages, permitting fees and other equipment needed for installations, remained relatively flat over the same period. The study’s authors pointed out that further reductions could be achieved if these expenditures were lowered through public policy.

“Soft costs are especially important from the perspective of public policy efforts,” said Galen Barbose of Berkeley Lab’s Environmental Energy Technologies Division, and one of the report’s co-authors, in a news release. “Unlike module prices, which are established based on global supply and demand, soft costs can be influenced more directly by local, state and national policies aimed at accelerating deployment and removing market barriers.”

Among the proposals that have been put forward by solar energy industry advocates and lawmakers are reforms to the licensing and permit process to make it more streamlined. There have also been calls to reinvest in the California Solar Initiative, funding for which has largely been spent. But even absent these solutions, it’s clear that a solar electric system is becoming more affordable and accessible to a larger share of the population.

Since the beginning of the year, utility companies have been making headlines with their efforts to eliminate the Net Energy Metering (NEM) program for solar in California. But now, the utilities are making headlines with a new topic: AB 327. This bill can also be seen as a direct threat to the solar industry.

Sponsored by California Assemblyman Henry Perea and backed by Big Energy, the two main goals of the bill is to 1) eliminate the NEM program and phase out the thousands of solar customers who are currently part of the program and 2) level out the tiered pay structure for utility companies including Southern California Edison. In order to accomplish the latter, the utilities would charge all ratepayers a mandatory $10 monthly fee or $120 annually. This fee is for merely accessing the grid and would be in addition to the charges for monthly electricity usage.

Those behind the bill argue that a monthly surcharge is necessary to pay for fixed costs lost to customers who utilize solar energy. Additionally, they claim to need the funds to maintain the state’s transmission grid and prevent outages.

However, solar advocates and those in the solar industry interpret the bill differently. In effect, the utilities are proposing to shift costs now incurred by high rate payers by increasing costs for low rate payers.

What makes this effort unusual is that this charge will be placed into law by the legislature, rather than through due process at the California Public Utilities Commission (CPUC). If passed, legislating similar fees will certainly be considered a path to success in the future by utility lobbyists, and may lead to additional surcharges for whatever utility stockholders believe is possible or necessary to improve the monopoly’s bottom line.

It should come as no surprise that energy monopolies are pushing so strongly for a bill at this point in time. In the last few years, residential “rooftop” solar has experienced explosive growth as many households have chosen to go solar and generate their own renewable energy.

The Net Energy Metering program — which allows solar owners to receive credit for any over-production — has been a large incentive for many to go solar and since the program was instituted in 2007, thousands of solar customers have signed up. By eliminating the NEM program, the utility companies will not only take away a major incentive for potential solar customers but will also renege on a contract that they already signed with those already enrolled.

In addition, the monthly mandatory fee will affect many potential solar customers whose incentive is largely financial. Many of those who are currently interested in solar are getting charged a lot for electricity in the higher tiers. Therefore, they install solar panels in order to reduce their consumption and lower their utility bill.

If AB327 does in fact pass, then the financial incentive to go solar will be severely reduced for small and modest users of energy, and diminished as well for larger users. The average ROI (return on investment) in the first year will decrease by as much as 10% for average consumers (from a modest first year return of 9.7% to 8.6%). Moreover, the payback period for a solar system (now around 5-7 years for most solar installations) will increase to 8-10 years or more, hindering many potential consumers from going solar.

What can we Californians do to fight against AB327? Join AMECO Solar, CALSEIA and thousands of solar supporters by calling your Senator (find out who your Senator is by visiting this website) and asking them to, “Protect All Net-Energy Metering Customers”. Then, spread the word to your friends and colleagues by tweeting, posting on Facebook or sending an email with a link to this blog post. The bill will be voted on this Friday, August 30 so be sure to take action today.