PG&E burns, solar rises

It goes without saying — but, here we say it — that last week was a really bad week for PG&E. Surprising? No, it was a runaway train wreck apt to happen, particularly as PG&E’s liabilities for the San Bruno gas line explosions and wildfires over the past two years amplified. A few months ago — pre-PGE bankruptcy — California PUC Chairman Michael Picker opined, “PG&E is too big to succeed.”

What’s next for PG&E? Myriad opinions have been tendered over the past week. While there’s no consensus, one thing is clear: PG&E’s rates are going to increase; we, the ratepayers, will bear part of the burden.

There’s also consensus that those of us who have solar (300,000+ net-metering customers in PG&E territory) are safe. PG&E cannot arbitrarily change current net-metering rules, as established by the PUC. Furthermore, solar/distributed generation is part of the solution, not an element of the problem. When property owners generate electricity via solar panels, energy use is centralized and the burden on the grid is mitigated. Solar is safe and secure.

Over the past week, we’ve chatted with a dozen or so prospective solar homeowners. Why solar, why now? we ask. Almost verbatim responses: Now that PG&E is going into bankruptcy and rates are destined to rise, the time seems right. (Secondarily, several homeowners have shared they view solar as a sage investment vis-a-vis volatile financial markets; solar generates a ~15% annual yield.)

While PG&E’s future is unknown, solar provides certainty for homeowners. Today, PG&E’s baseline (“Tier 1”) electricity rate is 22 cents per kWh. For Repower homeowners, the amortized cost to generate solar electricity is ~8 cents per kWh. With PG&E, you are at risk of (and have no control over) future rate increases. When you go solar, you lock in your price of electricity for 25 years.

And, the sun always rises :)

I am going solar. Now.

We have the fortune of exploring solar with dozens of homeowners each month. No two conversations are the same, but common themes prevail. We normally commence with a simple question: Why solar, why now (in terms of the homeowner’s interest)?

Solar is not a panacea and it does not make sense for all homeowners. Further, there is no single, silver bullet that prompts people to pull the trigger; here are a selection of “why solar, why now” anecdotes from homeowners:

1. PG&E: Opinions sway from virtual venom to distrust to steady rate inflation to I’m sick of paying PG&E so much every month. As you may have noticed, PG&E raised residential electricity rates ~42% over the past three years, and there’s more to come …

2. Climate change: Everyone wants to do their part, and solar is a the most impactful measure a homeowner can employ to reduce their carbon footprint. Furthermore, our state is burning (no-duh) and homeowners acknowledge the latent liabilities PG&E is accruing for the Santa Rosa, Redding and other fires; there’s a general belief (we agree) that ratepayers will bear financial responsibility for PG&E’s liabilities. Hence, going solar insulates you from future rate increases.

3. Donald Tariff Trump: Regardless of your political stripes, nobody likes to pay more for something. President Trump’s first two tariffs were applied to washing machines and solar panels. (Washing machines?) Fortunately, the quantity of solar panels imported into the U.S. in the fourth quarter of 2017 increased 1900% (versus Q4-2016); the solar industry has been working through a surplus of stockpiled, pre-tariff solar panels. However, supply is dwindling — prices have most likely bottomed — and the solar industry foresees tariffs in the next few months.

4. Donald Tax Credit Trump: There’s much concern among homeowners that the POTUS will eliminate the 30% federal tax credit (for solar, wind and other forms of renewable energy). For now, the tax credit is galvanized into the tax code, at the full 30%, through the end of 2019. We believe it is unlikely Congress (and then Trump) will abort the credit; perhaps we’re being overly naive! The safe bet, of course, is to lock it in in 2018.

5. Investment accounts: This one’s common … if I’m making less than 1% in my checking/money market account and I’m nervous about the stock market and my 401K, solar is an investment vehicle where I can confidently generate 12%+ annual returns. We agree, and the math is quite simple. 

6. I need a new roof: We are currently helping six homeowners who are replacing their roof and, in concert, installing solar panels. The timing is perfect to maximize and optimize warranties from the roof material and solar panel manufacturers (minimum of 25 years) and the roof and solar installation contractors (25 years). Importantly, we orchestrate the process (roof + solar) on behalf of homeowners.

7. Electric vehicle: This one’s a no-brainer, particularly if you plan to own your home for at least five years. Leveraging PG&E’s electric vehicle rate schedule (EV-A), our typical eV + solar homeowner only needs their solar system to generate ~80% of the electricity they use to offset 100% of their electricity costs. (Simple math: Your amortized cost to generate solar electricity is in the 8 cents per kWh range, and you will garner ~4 miles of charger per kWh … so, your cost to drive is ~2 cents per mile.)

Are we missing any obvious motivations (to go solar)? If so, please advise, or feel free to contact us if you’d like to amplify any (or all) of the above.

Understanding your PG&E-Valley Clean Energy Bill

Valley Clean Energy (VCE) commenced service as an alternative electricity provider June 1. As discussed here, this is great news … your electricity costs will be reduced by ~2-3% and you will enjoy (though you can’t see/taste/touch the electrons!) cleaner electricity. (If you’re among the 7,000 property owners in Davis, Woodland and unincorporated Yolo County who have already gone solar, this article has no utility for you; here’s a recent article about Valley Clean Energy’s Net Energy Metering program.)

Now that we’re a few months into VCE’s service, many homeowners are trying to interpret their new (PG&E + VCE) electricity bill. Here’s a quick tutorial:

• Page three of your PG&E statement quantifies your electricity use and charges. (Yes, July was a brutally warm month; electricity use/costs are quite high for most everyone.) Therein, you will see two additions:

1. A Generation Credit representing your Valley Clean Energy credit for the electricity generation component of your use.
2. A Power Charge Indifference Adjustment, essentially the fee PG&E charges to participated in VCE.

Next, turn to page four to review “Details of VALLEY CLEAN ENERGY ALLIANCE Electric Generation Charges”. Per the below, there is a net charge of $93.28.

Finally, simple math to determine how much you will pay relative to PG&E:

- VCE Electricity Generation Charge: $93.28

- Power Charge Indifference Adjustment: $43.90

- Less, PG&E Generation Credit: -$141.43

Hence, under the above scenario the homeowner saved $4.25 this month through VCE.

Annualized, this homeowner will save ~$40 for participating in VCE. It’s not enough to buy a bottle of Jordan cab, but perhaps you can enjoy a tasty meal at Mikuni’s.

Valley Clean Energy works.

Expanding your solar system to charge an electric vehicle

Increasingly — at least once each week — we are contacted by solar homeowners who recently purchased, or are contemplating buying, an electric vehicle (eV). To wit, they are interested in adding panels to their current solar system to cover fueling (charging!) their new eV.

The good news: Solar-charged electric vehicles are the least expensive form of four-wheel transportation, let alone the virtue of aborting fossil fuels. For RepowerYolo homeowners, the average cost to generate solar electricity on their rooftop is 8 cents per kilowatt hour (kWh). For every kWh of charge, eV owners garner ~4 miles of range. Hence, if you have an electric car that’s powered by sunshine, your cost to drive is ~2 cents per mile.

The challenge: While it’s technically (almost lego-esque) easy to add solar panels to a system, the process is, unfortunately, somewhat pricey. There are two scenarios:

1. Your current inverter has sufficient capacity to accommodate additional panels. If this is the case, then the challenge is locating and purchasing comparable (wattage) solar panels. Depending on the vintage of your current system, this could be simple, or it may be that you need to purchase used/refurbished panels.

2. Your current inverter cannot accommodate additional solar panels. Thereby — this is what I did when I added nine panels on my roof to charge my Leaf — you need to either add a second inverter or proceed with micro-inverters. Again, securing compatible panels is the next step.

In both scenarios, we are required to perform full design-engineering-permitting for your additional solar capacity. Though this is not complicated, it adds to the cost; it’s not simply lego-esque, snap-a-few-panels-in-and-go.

An additional caveat: Homeowners can only claim the 30% Federal tax credit once every five years. So, if you went solar in the past five years, you may want to wait until you re-qualify for the credit. 

Net-net, we’re happy to help. There’s no cost to receive an assessment of your current system, analysis of your historical net-energy use, modeling of your future electricity demand (for your eV), and an analysis + recommendations for your additional solar capacity. Feel free to contact us or swing my our workspace.

Evaluating solar options? The Model T days are over; four key considerations.

You've decided it's time to (re)-investigate installing solar. Your hesitancy may be logical: You do not need to go solar, and you’re unsure how to assess and assemble the pieces, let alone compare offerings. It can be puzzling. Your caution (and even procrastination) actually positions you well. The solar industry has improved dramatically from the Model T days.

Early car buyers had similar concerns: Do I buy internal combustion engine, electric, or steam? What starter makes sense? What about the brakes, or the dashboard, or the tire lifetime? Do I need a car? If so, who can I trust and will it work/be dependable?

Homeowners who went solar in the early days had to consider panel composition, wiring, inverter design, roof attachments, warranties, and even potential fire hazards. Fortunately, solar equipment is now similar to automotive offers from the early ‘80s. We no longer need to ask about where the engine was made, the engine compression, the electrical system, etc. For cars, we now shop for benefits and outcomes, and we have specific metrics to help gauge alternatives: fuel efficiency, acceleration (zero-to-60), safety test results, stopping distance plus all the new features and benefits available.

For solar, here's what matters most on the equipment front (i.e., questions you should engage and pose to your solar provider):

1. What is the likelihood the system will generate the annual energy forecasted? Thereby, can the solar company point to a significant group of local, monitored homes and compare forecast to actual generation? A simple metric to calculate system productivity: total annual electricity (kWh)/system size (kW-DC). For south-facing systems with no shade, this number should be about 1,500 kWh/kW. East- and west-facing systems produce ~8% less. (The likelihood of actually generating the energy promised falls dramatically as the actual productivity value increases above this threshold.) And, don’t get confused by panel efficiency: It simply reduces the area required for a system, and has a modest impact on the system’s production.
2. Does the equipment come from Tier-1, investment-grade suppliers? For solar panels: Canadian Solar, SunPower, LG and a handful of others qualify. For inverters: SMA, SolarEdge, and ABB.
3. What is the likelihood my product warranties will be valid? Amplifying the above point, the current and future financial stability of the manufacturer is imperative. A 25-year warranty is only as good as the company behind it; do your homework (or, better yet, press your solar provider to evidence the manufacturers’ solvency).
4. How do I know I’m getting a fair price? One way to standardize pricing for an apples-to-apples assessment: Divide system cost by the the system size (watts), so you have the cost per watt. The gross investment (pre-tax credit) for most home systems today should be $3.50 per watt or less for a Tier-1 system installed by a first-rate contractor.

Solar is transitioning from an art form to science. In so doing, your task is simplified as you endeavor to generate your own power. (And, solar, in our opinion, is the only investment in your home that generates a reliable return.)