Solar Plus Storage Considered For California Rental Units

A new report concludes that adding solar plus storage solutions to affordable multi-family housing in California can result in considerable energy bill savings.

The Center for Sustainable Energy, the Clean Energy Group, and the California Housing Partnership all teamed up to produce the “Closing The California Clean Energy Divide.” The report focused on how affordable rented housing units can take advantage of “significant electric bill savings” via battery backed up solar panel systems.

The report considered electricity usage information from nine housing units serviced by Southern California Edison, San Diego Gas & Electric, and Pacific Gas & Electric. The total savings varied from case to case, but each unit saw a financial benefit of shifting to solar plus storage.
solar plus storage california
A summary of the report’s 4 findings is as follows –

  1. Adding battery storage to an existing affordable rental housing solar installation in California can eliminate demand charges for building electricity loads, resulting in a net electricity bill of essentially zero.
  2. The addition of battery storage can almost double the building’s electricity bill savings achieved over the savings realized through solar alone.
  3. Battery storage can also result in incremental utility bill savings similar to solar for about a third of the cost of the solar system for owners of affordable rental housing properties in California.
  4. Solar plus storage projects result in a much shorter payback period than stand-alone solar projects.

The total market size for projects of this type in California includes more than 450,000 units. Electricity is often as much as 20 percent of a property’s operating costs, so potential cost savings in this category represents a significant opportunity. The report concludes that a general lack of awareness of the solar plus battery storage option is the primary reason why it has not been implemented yet.

While some savings should be expected to be passed down to renters in the form of lower electric bills, it’s also safe to assume that the majority of the potential savings will be utilized by property owners to achieve a quicker return on investment.

This report is to be followed by others to further assess the benefits and potential challenges of making the solar plus storage opportunity a reality.

What this report highlights fairly well is the considerable cost of conventional electricity in California. Not only is solar power cheaper than utility energy, but solar plus battery storage is as well.

Much like high priced electricity areas like Hawaii and parts of the North East, we can continue to expect more solar plus energy storage stories from California as well. It also won’t be too long before the rest of the country can start to implement these changes as prices continue to fall for battery storage technologies.

New Study Shows Net Metering Benefits All Customers

A new analysis from the Brookings Institution shows that net metering benefits both solar customers and non-solar customers alike.

Net metering – the policy that allows homeowners with solar panel systems to sell their excess electricity back to their utilities – has recently been a contentious issue in a small number of states, most notably in Nevada.

The rationale for the Public Utility Commission in Nevada to eliminate favorable net metering rules was that solar customers were shifting the costs associated with maintaining the grid to their neighbors that didn’t have solar.
net metering for solar power
On the contrary, the Brookings report shows that net metering actually provides a $36 million benefit to ALL ratepayers in Nevada. This is done through the added benefits of reduced infrastructure repair and environmental compliance costs. Homeowners with solar also help reduce the amount of future electric capacity investment that utilities must make.

In fact, the Brookings study also highlighted previous studies that all showed a net benefit for net metering. For example, the Environment America Research and Policy Center reviewed 11 net metering studies and found that the average “value of solar” was 17 cents per kilowatt hour compared to the nation’s average of 12 cents per kilowatt hour.

These findings do not come as a surprise to those in the solar industry and those who could take an objective viewpoint. It was abundantly clear that the whole “cost shifting” argument against net metering was simply utilities’ best shot at fighting competition. The Brookings analysis and others to surely come out will show how very illegitimate these arguments were.

The truth of the matter is quite obvious; residential solar power represents a significant threat to utilities’ traditional business model. Continued deployment of distributed solar power in the form of residential rooftop solar could put a serious dent in the profit margins of energy companies everywhere.

Ways that both utilities and ratepayers can benefit from the continued use of net metering was also mentioned by the study. However, the specifics of potential solutions have yet to be worked out. What is clear is that residential solar power is not going anywhere. Utilities must find a way to incorporate more renewable energy from its customers while updating the grid at the same time.

As recently mentioned in other posts, utilities will also see less revenue as energy storage systems will get deployed in much larger numbers in the coming years. Challenges for the traditional electric utility model will continue to mount as homeowners and business owners alike begin to opt for power ownership instead of renting in perpetuity.

Health And Environmental Benefits Of Solar Power Measured

In a recent study done by the Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory, solar power could provide $400 billion in public health and environmental benefits throughout the United States by 2050.

If anything, the $400 billion figure is conservative in terms of the potential to reduce greenhouse gas and air pollution. Part of the rationale for that assumption is that the $400 billion figure is tied to solar providing 27 percent of total energy needs by 2050. Many estimate that it can provide more than that by then. At the end of 2014, solar power was responsible for more than $1.5 billion in these types of benefits.

The DOE’s SunShot Initiative is playing its part with its goal of reducing the installed cost of solar by 75 percent between 2010 and 2020. Expectations of solar capacity are 14 percent of U.S. electrical capacity by 2030 and 27 percent by 2050. Again, these estimates can be seen as conservative considering the solar plus storage boom that is beginning to materialize.
Maine solar
Another finding of the study was that the current 20 plus gigawatts of current solar capacity is responsible for offsetting 17 million tons of greenhouse gasses. This represents about $700 million per year in avoided health costs of carbon pollution.

From an overall environmental perspective, solar also reduces sulfur, nitrogen, and other particulates that are by-products of conventional electricity production. The eastern half of the country can see the most benefits here as it still has the most coal-fired power generation. It is estimated that between 25,000 and 59,000 premature deaths can be avoided by the continued deployment of solar power.

A reduction of water use is another significant environmental benefit of solar power use. Based on the previous SunShot numbers mentioned, a 10 percent reduction in power plant water use can be expected by 2030 with 16 percent by 2050. This is especially important in parts of the country that are more prone to droughts.

Again, the numbers delivered by this study represent a “business as usual” trajectory of the implementation of solar power in the coming decades. It can easily be argued that with the combination of a decrease in the cost of solar power along with cost effective energy storage solutions, we can expect solar power to provide quite a bit more of the energy that we need.

With the powerful combination of massive health benefits, water conservation, and future cost savings, the future of solar power is certainly bright.

Large Solar Companies Prevent Progress In Maine

Those quite familiar with this blog are well aware of the fact that I’m not a fan of the large solar leasing companies. The following story is yet another reason to dislike these businesses.

Just this past April, a bill was defeated in Maine that would have allowed for the continued expansion of solar power in the state. It had the support of utility companies, the state’s public advocate, top Democrats, clean energy groups, and local solar installers.

The proposed bill was meant to be a replacement for net metering. Dubbed “next metering” the program involved utilities compensating solar customers with a credit for their solar power through long term contracts. The credits would decline in time as the cost of solar power is expected to in the future. Homeowners would still get good return on investment time frames and the utilities would pay less for distributed solar power over time.
Maine solar
How was it killed?

Top members of The Alliance For Solar Choice, representing the nation’s largest solar companies, sought to stop the bill from becoming law. They have spent significant money lobbying to influence top Republican leaders and the state’s Republican Governor, Paul LePage to prevent the passing of the bill. The Public Utilities Commission is now reviewing the proposed legislation, that would have been passed by now.

Why was it killed?

Any changes to net metering can be seen as significant threat to the fragile business models of the nation’s big solar companies. In fact, a slight reduction in net metering credits can completely kill the economics for these large companies. The fear from the national solar installers is that if net metering is killed in Maine, it could happen in other states across the country.

Net metering, in and of itself, is a good thing. A homeowner should be fairly compensated for their solar panel system’s excess power. The problem is that many utilities are not happy with current net metering laws. The bill that was proposed in Maine, to replace net metering, can be seen as a compromise that will allow solar to continue to flourish.

The large solar leasing companies simply want to become the new electric utilities. Not much would change from the perspective of homeowners. They would simply be switching utilities when signing a long term solar leasing contract. Sure, going solar is better than continuing to use electricity generated by fossil fuels, but a huge opportunity is lost when solar is leased.

By far the best value in solar power is offered by installers that help homeowners own their solar panel systems. The federal tax credit and other state credits and rebates go to the homeowner when solar is purchased, not leased. The “next metering” solar bill would have helped to make solar ownership a reality for many more residents of Maine.

Looking at a slightly longer time frame, the conversation will begin to switch to home energy storage instead of net metering. The economics for solar power energy storage will continue to look better and better in the coming years. At that point, the control and power will have literally transferred to homeowners. Homeowners must be the final victors in the power struggle between utilities and large solar companies.

Democratization of energy – this is the true potential of solar power.

Vermont Utility Is First To Offer Energy Storage

Vermont’s Green Mountain Power (GMP) utility has become the first to offer its customers an energy storage solution, namely Tesla’s Powerwall.

While installations have begun now in May of 2016, GMP originally made the initial arrangements to purchase 500 Powerwalls from Tesla in December of 2015. More units are expected to be ordered due to positive customer demand in excess of the original 500 units.

The energy storage units are available through three different options; in the first arrangement the customer completely owns the system, the second option involves ownership but the customer allows the utility to access the Powerwall, and the third option is where the customer leases the system from GMP.
enel green power
If customers rent the system, they will be charged $37.50/month. There’s no up front cost in this situation. However, if a customer want to purchase the system outright, it’s $6,500 plus installation fees. Tesla advertises the cost of their 7kw battery storage system as being $3,000. A large part of the additional cost associated with the $6,500 system offered by GMP must involve the inverter. It can be assumed that for any Vermonters who have already gone solar and therefore have an inverter, the system offered by GMP will be quite a bit less in cost.

In the two options where GMP has access to the Powerwall, the utility will use the battery’s energy for peak shaving. Peak shaving is basically the term associate with avoiding higher prices electricity during certain parts of the day when there is higher than average demands for power. The Powerwall can store utility energy during the day when it it cheaper. That electricity can then be accessed to avoid the peak electricity rates later in the day.

The customer automatically gains full access to the Powerwall during any loss of power such as may be experienced due to storms, for example. One Powerwall can provide a few hours of electricity for common appliances like refrigerators, lighting, and electronics like TVs and computers.

GMP has been known as a very solar friendly utility. For example, for many years they offered their customers an additional monetary incentive on top of net metering. Mary Powell, CEO of GMP has stated – “This is a game changer that will help fully leverage solar to the benefit of all with cost savings, while empowering Vermonters to generate, store and use energy closer to the home. As Vermont’s energy company of the future, GMP is partnering with customers on an energy transformation that moves away from the 100-year-old grid system, to a new one that is more reliable, sustainable and cost-effective.”

Hopefully other utilities across America are taking note about GMP’s forward-thinking approach towards their customers and where the future of energy is heading. Green Mountain Power has found a way where new, clean technology can benefit them and their customers alike.

The bottom line is that the solar plus storage reality will be commonplace before too long. It’s already started in Vermont.

Minnesota To Be Home Of New Large Solar Install

Enel Green Power North America (EGPNA) has announced the start of construction on their 150 Megawatt solar PV plant, Aurora, in Minnesota. It will be the company’s largest distributed solar plant in North America.

Enel Green Power is an Italian, multinational renewable energy corporation. It’s a division of Enel – a conventional electric utility based in Rome.
enel green power
“…Aurora highlights how innovation and design are driving the future of renewables, while providing communities with access to energy that delivers both the biggest possible environmental benefits and the most economic value.” – Rafael Gonzalez, Head of EGPNA.

This 150 Megawatt plant will actually be a combination of 16 individual solar PV plants. It is expected that total installation will be completed by the end of 2016.

A total investment of $290 million will be needed to completed this project. State Street Bank and Trust Co contributed $140 million of the total sum. Electricity from the Aurora plant will be purchased by Northern States Power via a power purchase agreement.

The plant’s design, which consists of 16 separate sites, is advantageous in that it will reduce line loss and transmission costs. Tracking devices will also be utilized to maximize energy production. The extra costs of solar tracking devices typically do not make economic sense on smaller, residential installs but are easily worth it on large scale utility installations.

There are quite a few large scale solar installations either underway or are in the planning stages in the United States. The particular reason that this one was highlighted is to show that solar works just fine in the northern latitudes. Many still think that solar power is only effective in the sunnier south west.

In fact, the extreme heat of some parts of the south west can actually hamper the efficiency of solar panels. Solar PV requires sunlight, not heat, which may reduce the effectiveness of electronics in general.

We can all look forward to many more utility scale solar projects being installed all across the country. After all, cold and mostly sunny locales are just as viable.

$25 Million To Be Invested In Grid Integration Of Solar

The Department of Energy has announced that $25 million be invested in helping solar power be more easily integrated with the nation’s electric grid.

This is yet another part of the DOE’s SunShot Initiative which seeks to lower the cost of solar power to help enable it’s mainstream adoption.

ENERGISE is the name given to this grid modernization program (Enabling Extreme Real-Time Grid Integration of Solar Energy). The program aims to work with utilities, solar companies, and software engineers to accomplish their grid integration goals.
solar grid integration
As we approach mid-2016, the U.S. now has 23 times the amount of solar that it did in 2008. The almost 30 gigawatts of solar power that America has must be utilized in a way that works well with conventional electricity production. It’s a balancing act that is in the very beginning stages of being dealt with.

“Our ongoing grid modernization work will help accelerate the widespread adoption of the clean energy resources that will define our low-carbon future. This funding will help that mission by supporting industry partners working to integrate, store, and deploy solar energy throughout our electric grid” – Lynn Orr (DOE’s Secretary for Science and Energy).

About 10-15 specific grid solutions are expected to be developed and tested to demonstrate real world effectiveness. The program will also benefit from past systems integration work. They all represent steps towards a very clean energy enabled grid.

The underlying issue here is the intermittent nature of solar power. As late afternoon turns into evening, conventional energy sources must be ramped up to make up for the loss of solar energy. This requires advancements in grid technology and software that ENERGISE looks to play a significant role in providing.

A bigger picture viewpoint is that this is just a short term solution until battery storage solutions are commonplace. In the not too distant future, instead of ramping up conventional energy production after the sun sets, utilities and homeowners will draw upon solar powered battery storage systems.

It truly is an exciting time for fans of clean energy, especially solar power. It’s a source of energy that can be utilized by government entities, businesses, and homeowners alike. The work that the DOE is doing to encourage the integration of solar power will ultimately benefit all of us.

Orange Button To Decrease Solar Financing Costs

Orange Button, a program launched by the U.S. Department of Energy this past April, seeks to standardize the way that solar data is collected and exchanged.

The program is just one of many under the umbrella of the D.O.E’s SunShot Initiative, launched in 2011. This particular one is key in reducing costs associated with developing finance programs for solar.
sunshot orange button
As the solar power industry is relatively new, it is not surprising that the industry has yet to develop a set standard to deal with the various data sets that exist. The extra hours spent working with data easily adds significant extra costs in developing solar loans. “When you look at the cost of financing for these solar projects, it’s artificially high. Solar is a long-term asset that has pretty well-known characteristics, but it’s treated as a higher-risk asset because there isn’t sufficient data available to help folks in the financial industry to know how to assess the risk of a portfolio of assets.” – Elaine Ulrich – the D.O.E.’s project manager.

“Soft Costs” – non hardware costs – represent a significant portion of the total cost of solar installations. Orange Button will go a long way in reducing these soft costs by reducing solar financing costs and other bureaucratic fees.

Four organizations have been awarded funds by SunShot to begin work to streamline how data is collected and used across the solar industry. These organizations are the Smart Grid Interoperability Panel 2.0, SunSpec Alliance, kWh Analytics, and the National Renewable Energy Laboratory. This work is primarily to be done over the next 2 years.

A reasonable expectation for results from Orange Button are solar finance rates that are comparable with mortgage rates. If anything, rates for solar could be even lower considering terms are typically 10 years or less compared to the much longer traditional 30 year mortgage. Shorter terms equals less risk for lenders.

Unfortunately, quite a few homeowners are under the impression that the only way to go solar is have a full cash payment ready for a solar panel system. This is not true. The current reality is that, here in 2016, there are already quite a few ways to get a solar installation financed. While rates will become lower in time with help from Orange Button, they’re actually quite reasonable right now. Check out the solar financing page for more information.

In the meantime, the overall cost of solar will drop incrementally in the coming years. A very high percentage of the savings in solar have already occurred, so going solar now and beginning to save is likely a better choice than waiting a few years for future decreases and paying too much in the meantime.

The Price Of Solar And Purchase Timing

Much has been written on this site regarding the cost of solar power and future pricing expectations.

The point of this particular post will be to take yet another look at the price of solar in light of a reasonable expectation of what the solar landscape will look like in the coming years. In addition to solar pricing, net metering and energy storage will be addressed.

There are surely many homeowners who are on the fence about going solar. Many of them expect that the price of solar panels will miraculously drop considerably in the not too distant future. Due to the cost structure of going solar, this is simply not realistic at all. See the bottom section of the cost of solar page for more information on that. Another expectation is that it makes more sense to wait for more moderate pricing reduction. Here’s a post on why that is not a good idea either.

Perhaps the most common solar power story found in the news of late revolves around net metering. Quite a few people may be unwilling to take the leap into a long term solar investment not knowing if their utility will change net metering rules. What happened in Nevada was extraordinary and not likely to occur elsewhere. In fact, that decision is being fought and a compromise that benefits solar customers should be an expected outcome. Some states that are currently re-evaluating their net metering policies may end up making a typical homeowner’s investment in solar simply take a bit longer to pay off.
price of solar
Most states have aggressive Renewable Portfolio Standards which requires their utilities to produce a certain percentage of their electricity from renewable sources. Residential solar can help these utilities meet their goals, especially when no large scale solar projects are on the books. In this way, net metering policies that benefit solar homeowners should be preserved.

Taking a slightly longer view, home energy storage solutions will take the place of the current need of net metering to make solar cost effective for homeowners. As been recently written, companies are already working on delivering lithium ion battery storage products for homeowners and businesses alike. Lead acid batteries have helped individuals with off grid solar set ups for decades now. Pricing and technological advancements are making the transition possible for lithium ion to replace lead acid.

While companies are starting to make these new battery solutions available to the general marketplace this year, the cost of energy storage can be considered a bit too expensive for many parts of the country. However, pricing is expected to fall considerably in the coming years. At that point, these devices will not only be used for a couple of hours of emergency back up power or help with peak energy shaving, but as a significant and long term source of power after the sun has set.

The cost of solar plus storage can easily double the payback time period of just going solar alone. So instead of a nationwide average payback of about 10 years with solar, it would figure to take an additional 10 years for a battery backed up solar panel system to pay for itself. The good news is that, like previously mentioned, a slight decrease in the cost of solar and a significant decrease in the cost of energy storage will greatly reduce this payback period in the coming years.

So any homeowners currently on the fence about going solar should know that now is a great time to go solar. Pricing can’t get much lower and cost effective home energy storage can be added in the near future to further protect the value of an investment in solar power.

US Just Surpassed 1 Million Solar Installations

The United States solar industry recently hit a major milestone. There are now more than 1 million solar panel installations across the nation.

Dan Whitten, V.P. of the Solar Energy Industries Association, stated that “It took us 40 years to get to 1 million installations, and it will take us only two years to get to 2 million. This is a time to mark when the solar industry started to accelerate at warp speed.” It is expected that solar will make up 3 percent of the nation’s electric production by 2020.

The combination of tax credits and reductions in the price of solar are the two main factors driving this incredible growth. Likely increases in the price of natural gas will be yet another factor that will spur an increase in the adoption of solar power.
million solar panel installations
Of course, net metering has much to do with the astonishing growth of solar as well. If homeowners did not get the full value of their solar panel system production, then many would not be as likely to go solar in the first place. The upcoming solar energy storage boom will help any current concerns with the availability of net metering. This will put much more power and control into the hands of the average solar power consumer.

Researchers at SEIA and GTM Research estimate that the 1 millionth install happened early March, 2016. While a high majority of those installs were residential, utility scale solar will continue to provide the highest total solar production in the near term.

There’s no question that this considerable solar trend will continue in the coming years. Solar can and will become much more than 3 percent (by 2020) of the nation’s power production.

As previously mentioned, energy storage will be key in driving further solar power growth. The intermittent nature of solar requires that storage play an increasingly larger role. The good news is that the cost of energy storage will continue to fall significantly in the coming years.

So here’s to the first million solar installations! It’s great to know that the next million is right around the corner.