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Is there urgency to go solar? The times they are a-changin'

dylan times changing image.jpg

Over the past few years, we have stressed — STRESSED — to property owners that there is NO urgency to go solar. Here’s a blog post elaborating our perspective on the lack of urgency, and the importance of doing your homework, when evaluating solar.

To quote Bobby Dylan, the times they are a-changin’.

Retrospective

We posited there was no urgency to go solar based on the three-to-four year windows (until expiration) of the 30% federal tax credit and PG&E’s Net-Metering program. Furthermore, solar panel prices eased a bit over the past few years, while PG&E’s rates continued to inflate (22% in 2016; another 8.5% increase this year). The tax credit is locked in, PG&E’s net-metering is galvanized, and the economics of going solar are improving. Take your time, we counseled.

Contemporary perspective

Regardless of your partisanship, solar is in the political cross hairs. Drill baby drill. Climate change is a hoax. Coal is our future. Political chestnuts and hyperbole voiced to rouse the base, but defying logic and economics: Solar is the fastest growing industry in the U.S. (adding jobs at 20x the rate of the economy), and solar has created more jobs than any industry in the country over the past 4-5 years. Furthermore, it’s quite libertarian to enable property owners to create their own energy, hence the bi-partisan extension of the federal tax credit at the end of 2015.

Over the past few months, domestic politics and the macro economy have defied logic and contemporary history:

1. Demand for Tier 1 (investment-grade) solar panels has exploded in China and India, thus constraining supply in the United States (and thereby slighting increasing solar panel prices for the first time).

2. On Friday, the US International Trade Agency (ITC) ruled in favor of two US-based, now insolvent solar panel manufacturers, Suniva and Solar World, agreeing their businesses were harmed due to the supply of lower cost, internationally-manufactured solar panels. The companies are seeking a 40-cent per watt tariff and a floor price of 78 cents per watt on imported solar modules. (In today’s market, such taxes would increase the cost of solar panels by 50-65%, with no viable US-made alternative.) President Trump is expected to issue a final ruling by year’s end. In the interim, large-scale solar project developers are hoarding supply of solar panels, thus increasing the cost (demand > supply) of solar modules for the entire industry.

3. Daily, there are rumblings that a Republican-inspired tax or budget bill will axe the clean energy tax credit, thus dis-incentivizing those who want to transition to clean energy. (Fact: The oil and gas industry receives more than 10X the tax credits/incentives as the clean energy industry. Another fact: Facts don’t matter.)

What to do? We cannot control the macro economy, the president’s actions, or congressional politicking. Instead, we are controlling what we can by securing as many high-quality solar panels as possible, in wake of what’s going on. Prices may increase, tax credits may perish, but solar in PG&E territory will continue to generate attractive, risk-adjusted investment returns. Property owners will continue to transition away from carbon while insulating themselves against future electricity rate increases, most likely with a greater urgency now.

Dylan, circa 1963:

The line it is drawn

The curse it is cast

The slow one now

Will later be fast

As the present now

Will later be past

The order is rapidly fadin’

And the first one now will later be last

For the times they are a-changin’

SAS: Solar Acronym Soup

All industries are plagued with too many acronyms; the solar industry could top the charts, cluttering myriad technical, utility and financial acronyms into confusing babble-babble. Here are but a few solar sugar plums, from the basic to the sublime:

- BoS: Balance of System (the soft costs — aside from equipment and installation labor — that complete the cost of your solar system).

- CCA/CCE: Community Choice Aggregation/Community Choice Energy (an alternative form of cleaner energy supply … coming to Yolo County in 2017!).

- CPUC: California Public Utilities Commission (the governing/regulatory body that oversees PG&E and other investor-owned utilities in California; aka, friends of solar and consumer choice).

- eV: Electric Vehicle (aka, peanut butter to solar’s jelly).

- GHG: Greenhouse Gas (a [horrible] gas in the atmosphere that absorbs and emits radiation within the thermal infrared range).

- IRR: Internal Rate of Return (the interest rate at which the net present value of all the cash flows [both positive and negative] from your solar investment equal zero).

- ITC: Investment Tax Credit (the 30%, one-time federal tax credit you receive when you own your solar system).

- kW: Kilowatt (1,000 watts of energy).

- kWh: Kilowatt Hour (a measure of electrical energy equivalent to a power consumption of 1,000 watts for 1 hour).

- NEM: Net-Energy Metering (the program/mechanism by which solar system owners are credited for the electricity they generate).

- PTO: Permission to Operate (notification from your utility that your solar system is connected to the grid, thus commencing monetary credits).

- PPA: Power Purchase Agreement (an agreement to purchase electricity generated by a solar system [on your roof] that is owned by a third-party, tax equity fund … aka, a bad deal for homeowners vis-a-vis solar ownership).

- PV: Photovoltaic (PV cells in your solar panels are specialized semiconductor diodes that convert visible light into direct current electricity).

- TOU: Time of Use (a utility rate schedule whereby you are credited [for solar] and debited [for electricity use] based on the time of generation/use).

 

And, finally:

- PG&E: Our favorite utility (though they fight solar at every juncture :)

A clean solar panel is a happy solar panel. (But, what’s the cost of happiness?)

One of the beauties of solar panels is their simplicity: They’re static, energy generation systems ... No moving parts, content as a sloth on your roof. Like sloths, they get dirty.

It rained -- barely -- last week. Not enough to even flinch the drought, but a decent amount of wet stuff to clean solar panels. Rain is like exercise for solar panels: Painful during (our production drops because of the clouds!), but fruitful thereafter (we're clean and powerful!).

The sole redeeming residue of climate change/weird weather/drastic drought is that solar systems are generating more energy than anticipated. For example, Repower homeowners' systems over the past two years are pumping out 6-15% more electricity than we had modeled. Little moisture in the ground (read: no fog), fewer clouds, more sunshine. A great potion for solar.

As rains diminish, should I clean (my solar panels) of should I chill? Stock answer for Yolo County homeowners: Clean them -- simply spray with a low-pressure nozzle; no soap or brushes are necessary -- three or four times a year, commencing a month after the last rains. There’s a lot of dirt in the air of our agricultural community. But, upon further review ...

... A 2013 UC San Diego study revealed it's not cost-effective -- and this was pre-drought, pre-water rate hikes -- to clean your solar panels. Synopsis:

Researchers found panels that hadn’t been cleaned, or rained on, for 145 days during a summer drought in California, lost only 7.4 percent of their efficiency. Overall, for a typical residential solar system of 5 kilowatts, washing panels halfway through the summer would translate into a mere $20 gain in electricity production until the summer drought ends—in about 2 ½ months.

Let them rest like a sloth? Perhaps. Sloths are quite happy in the sun.

P.S. - If/when you clean your solar panels, here are a few tips:

- DO NOT use high pressure sprayers as they can damage the seals around the frame. 

- Wash the panels in the morning to reduce drastic temperature changes. 

- Do not scrub the panels with any harsh materials. 

- If a brush is needed, make sure it has soft bristles. 

- If you notice rapid dirt build up—or bird droppings—then more frequent cleanings are warranted.