Lions and tigers and bears, oh solar!

Over the past month or so, three regulatory and financial developments have strengthened the investment viability for homeowners who go solar. I love lions, tigers and bears ... let's review the three solar life springs.

1. The 30% Federal Investment Tax Credit was, surprisingly, extended for four years. Originally set to expire at the end of 2016, the tax credit was extended thanks to a bit of horse-trading between  Dems and Republicans in Congress. Via the Omnibus spending bill, Republicans were granted removal of the 40-year ban on exportation of domestic oil. Democrats received an extension of the solar tax credit. An all-of-the-above energy approach? Yes, but to the benefit of homeowners who repower with solar.

2. Today, the California Public Utilities Commission extended solar net-metering for PG&E (and the other two investor-owned utilities') ratepayers. This comes on the heels of the PUC grandfathering -- for 20 years -- net-metering for existing solar customers. Big deal? Yes. It is a continuation of compensating PG&E solar customers at the full retail rate. Doesn't get better. Here's a good overview of the PUC's decision.

3. Commencing January 1, 2016, PG&E raised residential electricity rates 8.7%. Across the board. Predictable but painful (for homeowners who do not have solar). But, higher rates increase the avoided cost -- what you would pay PG&E -- for solar homeowners, thus boosting their investment returns.

Importantly, extensions of the tax credit and net-metering programs temper the urgency to go solar. Homeowners we work with obviously want to monetize the tax credit and receive full value for their solar-generated electricity. They're locked. That said, the primary urgency in their decision is twofold: Do the right thing (for environmental reasons) and stop paying PG&E.

Please contact us if you would like to elaborate any or all of the above. Quite a trifecta in the solar world, and a great month for Yolo County homeowners.

PG&E’s Net Energy Metering (NEM) is Wonderfully Simple

[Originally posted September 1, 2015]

PG&E’s accounting methodology for solar homeowners (aka, Net Energy Metering) is wonderfully simple. It’s the bill credit mechanism that makes solar lucrative for Yolo County homeowners. Unfortunately, many solar homeowners we speak with are caught off guard when they receive their annual “true up” bill from PG&E. In all of these cases, the homeowners have leased their solar system from a national company and said that the company's salesperson did not explain the process.

To wit, when you have solar, here’s how it works:

1. You are enrolled in PG&E’s Net Energy Metering program, and you have a 20-year contract with PG&E whereby they are required to credit you for the solar electricity you generate.

2. When you generate electricity, you are credited at the full retail price (per kilowatt hour), the same rate you pay when you use electricity.

3. As a solar homeowner, you only pay your PG&E electricity bill once a year. Every month, PG&E sends you a Net Energy Metering statement, quantifying and valuing your net electricity use. Some months, you are a net generator (you make more electricity than you use) and PG&E owes you money; conversely, there are months where you use more electricity than you generate and you owe PG&E money.

4. At the end of your 12-month solar year with PG&E, you receive an annual true-up, reconciling each month’s net electricity use. Thereby, if you were a net user, you pay PG&E; if you were a net generator, PG&E pays you.

It’s that simple. Please feel free to contact us — whether you already have solar or are considering it — if you have any questions.

One Year After Going Solar: PG&E True-Up

[Originally posted July 2, 2015]

Happy Repower homeowner Fred Lee went solar a year ago. Yesterday, he emailed us the numbers on his ROI in Solar. Here is what he wrote:

Subject: PGE True-up on our one year of solar cells

PGE has just released the "true-up" on our one year of our solar cells use. 

Last year, before installation of the solar cells, we paid PGE over $5550 for use of electricity. 

The True Up total electric use was $452.20, i.e., our total electric use cost during the past year compared to solar cell generation was a negative $452.20. Therefore we have saved about $6,000 last year as a result of solar cell generation and our reduced rate of electricity use. 

During the past year, we paid $210/month on the Yolo Federal [Credit Union] loan that enabled us to purchase the solar cells. We also saved about $11,000 in our 2014 federal tax credit due to the solar cell purchase.

Thanks for all your help in obtaining our solar cells.  

Fred

Understanding Net Energy Metering and Solar's Relationship with Public Utilities

[Originally published May 12, 2015]

We launched Repower--a community-focused, group purchase program to help our friends and neighbors in Yolo County go solar--18 months ago. After more than 40 residential solar installations, here are a some  observations from PG&E country:

Net Energy Metering (NEM). Net metering helps solar customers, especially when their usage is low in the spring and fall (less air conditioning and heating). In those months, customers bank their surplus energy production and use it to offset summer and winter usage.

ROR. Repower's 40+ installations generate an average of approximatley 6.5 kw--a bit higher than the state average--and customers get their money back in about 6 years, for a rate of return in the 12% range. I characterize solar as a bond investment, i.e., very low risk and steady returns for long periods of time.

Greater Personal Power. Our homeowners value and enjoy the feelings of independence and control that generating their own clean power gives them. Yes, they are tied to their utitlities through Net Energy Metering (NEM), but they are no longer subject to its rate hikes and complicated fee structures. 

Community Choice Aggregation Districts. The Investor Owned Utility's (IOU) general reluctance to change their business models to support locally-generated power is forcing many communities to consider setting up their own Community Choice Aggregation Districts, another poke-in-the-eye to IOUs.

One IOU's Approach. The Modesto Irrigation District, which serves a relatively large customer base in the Central Valley, generates its own power. Because its Net Energy Metering program has already reached capacity, it's no longer available. Instead, solar customers qualify for a new rate structure that lowers their rates across the board. Installing a solar system instantly reduces the total bill by more than 25%, without taking into account the value of the solar generated electricity. While better than nothing, Modesto Irrigation District's fix still falls short of the ROR that homeowners should be getting for the surplus electricity they generate.But, it's a start. 

A Big Game Changer ... Down the Line. On April 30, Tesla CEO Elon Musk revealed the new Tesla Energy battery for businesses and utility companies. Tesla's relatively inexpensive battery solutions for storing solar-generated electricity will be a game changer, but the extent of the transformation depends in part on the utilities developing favorable rate structures. The other major factor rests with battery development. Tesla's announced battery is intended for backup power supply, not for leveling usage. While Tesla's innovation is exciting, it will take years before it becomes pragmatic and adoptable for IOUs. 
 

The Freedom and Security of Solar

[Originally posted March 4, 2015]

Recently, we were talking with a friend about PG&E and she expressed that she hated feeling at the mercy of PG&E's rate hikes, ambiguity, and complex pricing criteria. She said she despises being subject to the energy monopoly and wished she could go solar and be free of PG&E.

“I think homeowners who go solar have a streak of independence. They want choices. They refuse PG&E’s ‘It’s our way or the highway’ attitude. And I also think they are people who are smart and grow their money, rather than spend every last drop.”

She assured us that being at the mercy of 'the grid' has been bothering her for years. She expressed that it's terrible to feel optionless ... and to be governed by rules in which one has no say, especially after she has seen the big savings of Repower homeowners.

PAWs and UAWs

She also made an interesting connection to RepowerYolo homeowners and the profile of millionaires described in Dr. Thomas J. Stanley's book, The Millionaire Next Door, in which the author profiles PAWs or "Prodigious Acquirers of Wealth"—frugal, smart, and the antitheses of those opulent Lifestyles of the Rich and Famous—versus UAWs or "Underachievers of Wealth" who max out their spending rather than grow their wealth. 

All said, the primary motivation to go solar typically is not because it's good for the environment. Homeowners go solar because it's a sound financial decision. That solar is clean energy is just an added bonus. 

Simple, Smart Solar

We like things to be simple, smart, fast and direct. We've sorted through all the solar pitches and complexity, distilled the process down to excellent solar panels, installers, and financing options. And we've negotiated a group purchase discount that makes solar an even better investment. 

If you're a PAW who has that streak of independence that makes you want to be free of PG&E and reduce your overhead by producing your own electricity, please call to learn if you qualify for the Repower group discount:  (530) 564-4292.