Daylight Savings - As financial incentives get phased out, local utilities and industry experts grapple with the future of solar power

By Russell Nichols, Comstock's Magazine

The biggest issue with solar panels on roofs has nothing to do with electricity.

This revelation came to Aaron Nitzkin back in 2012, after he had been laid off from Dow Solar. He had been in the industry for nearly 10 years at that point, and it was hard for him to watch from the sidelines as early solar business models crumbled under bad roofing contracts.

“I’ve seen so many problems with these solar companies,” Nitzkin says. “Some installed two or three systems in a day. Some were putting solar panels on a 15-year-old roof knowing that roof would need to be replaced in the next 5-10 years, costing customers thousands of dollars extra to remove the system and replace it. It was real sketchy stuff.”

It dawned on Nitzkin that the best time to install solar panels would be when a new roof is first put on. This would align the lifecycles of the roof and the solar system. With this basic concept, Nitzkin created Solar Roof Dynamics in 2013, putting solar in the hands of roofing contractors already thriving in the trade, and providing comprehensive solar training, products and services. Four years later, this small Davis-based startup is going national.

In January, Solar Roof Dynamics announced a strategic partnership with GAF, the largest residential and commercial roofing manufacturer in North America. Nitzkin’s company is enhancing GAF’s residential Solar Elite program, offering its vast network of roofing contractors an array of solar services, such as engineering and design, installation, sales and project management training. He believes this type of collaboration will be the model of the future.

“Ten years from now, the majority of roofing contractors will offer solar,” Nitzkin says. “It will be no different than ordering a burger and being asked if you want fries with that. ”

This year marks the deadline for California’s 10-year bet on solar roofs. In 2006, the state launched the “Million Solar Roofs” vision, pumping $3.2 billion into incentive programs. The plan was to build one million solar roofs, or the equivalent thereof, generating 3,000 megawatts of renewable energy by 2017. California currently has almost 700,000 solar projects, but the state surpassed the wattage target in 2015 (more than 5,000 megawatts installed as of March 2017), according to California Distributed Generation Statistics.

The impact was huge, creating 100,000 jobs, catalyzing California’s solar industry and expanding beyond homeowners to businesses and schools (Related: Plumas Lake school district takes advantage of Prop 39 for energy-efficiency projects). Now, with most incentive programs phased out, the next few years will determine how the market sustains itself as local utilities try to solve cost inequities and answer questions about solar energy storage.

Raising the Roof

In California, the push for solar power goes back decades. In 1995, California passed the net-metering program, allowing customers with a solar panel to send surplus energy back to the grid for credits. In 1998, the state passed a deregulation bill, offering rebates to customers investing in rooftop solar. Still, in those days, the solar market was almost nonexistent and climate change wasn’t a mainstream topic.

Then came the blackouts.

In the California electricity crisis of 2000 and 2001, illegal shutdowns of pipelines by Enron and market manipulations created a shortage of electricity in the state. Businesses were hit hard by rolling blackouts and, suddenly, the idea of customers generating their own electricity made much more sense, says Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association.

But a solar panel wasn’t just something you could pick up at Home Depot. With a price tag of $50,000 or more to install a system, this was a luxury that only a select few could afford.

“Only extremely wealthy tech lovers were going solar — and more power to them, but that’s not going to solve any problems or create meaningful jobs,” Del Chiaro says.

Working with former State Senator Kevin Murray, Del Chiaro developed the Million Solar Roofs initiative. Former Gov. Arnold Schwarzenegger won the recall and supported the idea. The Democrat-controlled Legislature passed the unprecedented law. By creating this demand and giving certainty to the marketplace, California became ground zero for innovative solar business models and has since become a global leader.

“We employ 100,000 people throughout the state of California,” Del Chiaro says. “That’s twice the number of people that work for all the state’s electric utilities combined.”

Ten years ago, the market was small, with only early-adopters (the so-called “backwoods hippies” and “Malibu millionaires”) going solar. But when rebates were put in place with the new law, non-residential customers (businesses, schools, municipalities, etc.) took advantage and made it more mainstream. The industry was able to lower prices.

The rebates stopped in 2015 when California reached its target. Federal tax credits for solar installations (which now cost around $15,000 to $17,500, before incentives) still exist, but those will also be phased out in the next five years. But Del Chiaro says the market has continued to grow despite the absence of incentives for the vast majority of the marketplace.

Equity vs. Subsidy

The system isn’t perfect.

Low-income customers and those who rent generally do not have access to rooftop generation. These classes are among those most vulnerable to the net-energy metering cost shifts, says Mario De Bernardo, state government relations and external affairs manager of Northern California Power Agency, an association based in Roseville that oversees regional utilities.

In addition, customers without rooftop solar end up footing other users’ electric bills. For example, under net energy metering, homeowners with solar panels may earn subsidies from the utility and non-solar customers where they don’t have to pay for electricity at all. In brief, net energy metering is a billing arrangement where customers with solar panels receive financial credits for any extra electricity they generate and give back to the grid. But these homeowners still draw from the grid at night once the sun goes down. They’re benefiting from the distribution system without paying.

Those costs, in theory, get passed onto other non-solar ratepayers, De Bernardo says. “Some customers can’t invest in rooftop solar,” he says, “but under the traditional net-energy metering system, they’re still paying into the program to support those who can.”

This is why jurisdictions across the country are looking to reform their rooftop solar programs to allow solar to grow more sustainably, says Jonathan Changus, NCPA member services manager and regulatory affairs. Roseville Electric, recently ranked No. 9 by the Smart Electric Power Alliance in providing the most solar to customers, is a prime example. The utility is pursuing a plan to build a community solar pilot project that allows customers to opt-in and get benefits from a large, centrally located solar farm in the city. The project is ideal for residents who cannot install solar because they live in an apartment, condominium or rent a home. Also, unlike rooftop solar, the benefits of the program move with the customer, as long as the person stays within the utility’s service territory. The utility hasn’t yet entered into a contract with a vendor, and the project is in the preliminary stage.

“It makes more sense for municipal utilities because their local governing boards, which are usually city councils, like to see the renewable investments in their communities,” De Bernardo says. “These local officials are also looking at ways to help lower-income ratepayers in their communities.”

The Sacramento Municipal Utility District has been a solar pioneer since the 1980s, building one of the world’s first utility-scale solar arrays at Rancho Seco in 1984. Its Solar Shares program allows customers to take advantage of owning solar without the hassle of buying and placing panels, and “helps businesses deliver on corporate renewable goals while saving on capital costs,” according to Brent Sloan, SMUD’s solar expert.

On the business side, Sloan says companies started installing solar panels for many reasons, such as reducing emissions or boosting their competitive advantage by calling themselves “green.” But in the past few years, many have actually begun integrating solar for the energy savings. It may be only cost-effective in a certain timeframe instead of year round, but even that time period could help deliver net savings, Sloan says.

“I think you’re moving now to where businesses are seeing it as a way to affect their energy portfolio and lower time-of-use charges,” he says. “I do calculations to try and get them to look past that one time period and look at the larger picture of yearly energy usage and charges.”

Battery Life

California imports the vast majority of its fossil fuels. This means a percentage of every dollar derived from fossil fuels must be sent outside of the state for importation. By contrast, the sun is a free and inherently local energy resource, so a higher percentage of every dollar spent on solar energy goes to the person who did the installation, Del Chiaro says.

The next big challenge is storage. Or, as Del Chiaro says, “putting a battery in everyone’s garage to make the sun shine all day long.”

Customers would be able to draw from the battery at night instead of the grid. This would give them another tool to control energy usage and operate independently. Del Chiaro notes that these customers would not go off the grid completely, but would be protected from price spikes. Still, solar batteries may be too expensive for some customers, with price estimates between $5,000 to $7,000.

Currently, there are two bills aimed at transforming the energy storage market on the consumer side, and making the economic, environmental and grid support benefits more mainstream:

AB 1030 establishes state goals of creating a marketplace for energy services and achieving market transformation for the storage industry. The bill directs the California Public Utilities Commission to make a number of policy and programmatic changes to achieve those goals.

SB 700 would jump-start the energy storage market by reducing technology and installation costs through a tiered rebate program, similar to the California Solar Initiative program, but for storage.

Del Chiaro insists the objective isn’t to make utilities obsolete, but to help the energy model evolve to meet future demand, including an influx of electric cars.

“We have this 19th century grid and we’re adding 21st century technology,” she says. “The idea to build a huge power plant and transmission lines, and pipe them into a large city and sell them at full retail, that’s a thing of the past. We want the sun to shine at night. This will enable us to truly achieve a 100-percent, carbon-free energy economy.” 


California Moves to Boost Customer-Sited Energy Storage. Remains Industry’s “Undisputed King”

By Lisa Cohn, Microgrid Knowledge

Described in a recent report as the “undisputed king” of the energy storage industry, California continues to blaze new trails, now with legislation to boost customer-sited energy storage.

The California Senate recently passed SB 700, which creates incentives for customer-sited energy storage in homes, schools, farms and businesses. Next, the bill moves to the state Assembly.

The 10-year rebate program, called the Energy Storage Initiative, provides up to $1.4 billion and lets the PUC set the total amount, said Laura Gray, energy storage policy advisor with the California Solar Energy Industries Association. It aims to make storage more accessible to consumers.

“California is once again showing its leadership on clean energy. Just as the state revolutionized solar, it has the opportunity to transform the market of customer-sited energy storage,” Gray said. “With this bill California would be the first state to create a market transformational program dedicated to local energy storage.”

Undisputed king for next five years

Separately, GTM Research and the Energy Storage Association (ESA) reported this week that California “will remain the undisputed king of the U.S. storage market over the next five years.”  Arizona, Hawaii, Massachusetts, New York and Texas vie for second place.

California helped drive what proved to be a record-breaking first quarter for energy storage in the United States. GTM and ESA’s latest “U.S. Energy Storage Monitor” reported that 234 MWh of energy storage was deployed, a 944 percent rise over the first quarter last year.

Ravi Manghani, GTM Research’s director of energy storage, attributed the big leap in part to a large battery deployment made to bolster reliability following natural gas leaks at California’s Aliso Canyon.

Several recent policy moves also boosted energy storage in California, according to the report, including a doubling of the Self-Generation Incentive Program in April, upping the program’s budget to $83 million annually for 2017-2019. Energy storage will get 85 percent of the funds. Of that 90 percent goes to projects larger than 10 kW and 10 percent to residential projects less than or equal to 10 kW.

GTM Research noted several other recent activities in California helping energy storage:

  • San Diego Gas & Electric announced winners for its 2016 preferred resources request for proposals (RFP)
  • The California State Legislature introduced AB 1405, which would establish a clean peak standard for California
  • SDG&E released a Distribution Reliability/Power Quality RFP
  • The California Public Utilities Commission announced an additional 500 MW of distributed energy targets for the three main investor-owned utilities, distributed evenly among the three.
  • The California Independent System Operator released its Energy Storage and Distributed Energy Resources Phase 2 proposal, meant to lower barriers for energy storage and distributed energy to participate in the wholesale market.

California topped all states for non-residential and utility energy storage installations in GTM’s ranking. For residential storage, however, the state ranked only third. Residential installment may increase if California lawmakers approve the customer-sited energy storage incentives.

Legislation plays to consumer demand for energy storage

Customers are interested in storage because of its ability to help them control their energy use and protect themselves against fluctuating rates, Gray said. “Local storage will also allow homes, businesses and schools to use renewable energy more efficiently, which will help the state reach 100 percent renewables.”

California sees economies of scale pushing prices down over time. So under SB 700, the rebates for customer-sited energy storage get smaller as more systems are installed.

Bill sponsors hope the incentives will lead to more use of renewable energy and reductions in greenhouse gases.

The bill hails the benefits of distributed energy, saying, “The electrical system is evolving from a model dominated by centralized power plants and long distance transmission of electricity toward a model focused on local energy sources located close to customers of electrical load.”

The electrical system is evolving…toward a model focused on local energy sources.

In addition, the legislation, sponsored by Sen. Scott Wiener (D-San Francisco), says that a decentralized system with distributed storage “can create greater energy independence and energy security by providing for increased resilience of the power supply and smoother integration of renewable energy.”

What’s more, energy storage can help reduce line losses over long-distance transmission lines. And it can help customers be more actively involved in the electrical system, which helps them better understand the system. Energy storage also leverages private capital while insulating customers from increasing energy costs, the bill says.

Rebates will go to customer-sited energy storage systems that the commission determines safely use the existing transmission and distribution system.

Under the proposal, at least 30 percent of the amount collected will be reserved for energy storage systems in low-income residential housing and storage systems located in disadvantaged communities or low-income communities owned by small businesses, local or state government agencies, educational institutions or nonprofits.

In addition, the CPUC will create a streamlined reservation process, giving preference to projects that are part of the Multifamily Affordable Housing Solar Roofs Program.

Future energy storage growth

While California has blazed the trail, it still has a long way to go in getting more energy storage on the ground, the bill says.

“California is a worldwide leader in the development of energy storage systems and advanced management of the electrical grid, but the market is so small that this leadership position is not firm,” the bill notes.

Indeed, neither California, nor the industry as a whole, should expect a repeat of the Q1’s spike any time soon. It’s likely something of an anomaly.

Source: GTM Research/ESA U.S. Energy Storage Monitor

“The industry shouldn’t get too comfortable, as with fulfilment of Aliso Canyon deployments, there aren’t that many 10+ megawatt-hour projects in the 2017 pipeline, indicating that the first quarter may be the largest quarter this year,”  said GTM’s Manghani.

While spikes may be rare, the energy storage industry is still poised for impressive long-term growth. GTM Research forecasts the U.S. annual market to reach 2.6 GW ( 7.2 GWh) by 2022, creating a $3.2 billion market, a tenfold increase from 2016 and a fivefold increase from this year.


California Senate Passes Major Clean Energy Bills

By Joseph Bebon, Solar Industry Magazine


Wow! In a single day, the California State Senate passed three major clean energy bills, including one that would establish a 100% renewable portfolio standard (RPS), one that would mandate solar on most new buildings in the state, and one that would create an energy storage rebate program. All three measures now go to the California Assembly for consideration.

In a 25-13 vote on Wednesday, the Senate passed S.B.100, which aims to both accelerate and expand the state’s current 50% by 2030 RPS. The bill, sponsored by Senate President pro Tempore Kevin de León, D-Los Angeles, would speed up the renewables mandate to 50% by 2026 and establish an ultimate goal of 100% by 2045.

If it becomes a law, the legislation would put California on par with Hawaii, the only other state with a 100% RPS.

In a press release, de León calls the California measure “the most ambitious target in the world to expand clean energy and put Californians to work” and says it is “critical that we double down” amid climate policy shifts by the Trump administration.

“Regardless of what Washington does, California will show the way forward,” he says. “We are sending a clear message to the rest of the world that no president, no matter how desperately the try to ignore reality, can halt our progress.”

Bernadette Del Chiaro, executive director for the California Solar Energy Industries Association (CALSEIA), comments, “Transitioning to a 100 percent carbon-free future in an economy the size of California’s requires persistence, commitment and vision. CALSEIA stands at the ready in creating the local jobs, carbon-free electricity, and grid reliability that comes with this cleaner future.”

Kathryn Phillips, director of Sierra Club California, adds, “Getting 100 percent renewable is 100 percent possible and 200 percent necessary. S.B.100 responds to what survey after survey shows that Californians want: clean energy, clean air and a future for the next generation.”

Also on Wednesday, the California Senate passed two bills sponsored by Sen. Scott Wiener, D-San Francisco, to boost clean energy in the state. In a 24-13 vote, the Senate approved S.B.71, legislation that would establish a mandate requiring rooftop solar installations atop most new buildings throughout California.

The statewide requirement would resemble a city mandate Wiener authored and helped pass last year, when he was a member of the San Francisco Board of Supervisors and before he became a state senator. Last April, the board unanimously approved a city ordinance requiring new small and midsize buildings in San Francisco to include solar. Smaller California cities, such as Lancaster, also have similar solar mandates.

Under existing California state law, 15% of roof area on all new residential and commercial buildings up to 10 stories tall must be “solar ready,” meaning unshaded and free of obtrusions. As with his San Francisco ordinance, Wiener’s Senate legislation would build on the current state law by mandating that solar actually be installed on the 15% of “solar ready” roof area of new small and midsize buildings in California. That can include either solar photovoltaic or solar water installations.

If it becomes law, S.B.71 would make California the first state in the U.S. to mandate solar installations on new construction.

“Solar is a cost-effective and reliable source of electricity, and S.B.71 will help ensure that it’s installed at the optimum time: when a building is being built,” says Brandon Smithwood, director of California state affairs for the Solar Energy Industries Association. “This legislation will enable the state to meet its climate goals, while expanding the benefits of solar and its accessibility to even more Californians.”

Susannah Churchill, California director for Vote Solar, says, “California has long led the country on climate action and energy innovation, and we need that kind of leadership today more than ever. This bold solar legislation shows the nation and the world that the Golden State is committed to a clean energy transition that benefits our communities, our economy and our climate.”

In a 23-13 vote Wednesday, the Senate also approved Wiener’s S.B.700, which would establish a new, 10-year Energy Storage Initiative to provide rebates for the installation of energy storage systems.

According to Wiener, the Energy Storage Initiative would be funded by taking the amount of money currently authorized for energy storage under the state’s Self-Generation Incentive Program (SGIP) for energy storage (which is set to expire in 2019) and create a separate energy storage program, which will be extended until 2027. With this funding secure for a decade, Wiener says the energy storage market will have certainty and support to develop energy storage technologies, which will make technology more efficient, more effective, and cheaper. Notably, S.B.700 also requires 30% of the rebate program to be reserved for energy storage systems in low-income residential housing and disadvantaged communities, as well as job training and workforce development.

The bill is sponsored by Environment California and supported by over 60 environmental, solar and environmental justice organizations.

“California can continue to lead the clean energy revolution that is cleaning our air and staving off the worst impacts of climate change,” says Dan Jacobson, state director of Environment California. “We can’t continue to use fossil fuels when we have better options. S.B.700 allows solar power to work at night.”

According to Laura Gray, energy storage policy advisor at CALSEIA, the Senate’s passage of S.B.700 “signals that policymakers have a real appetite to create a marketplace for local, customer-sited energy storage.”

Gray says, “This bill takes California’s clean energy economy to the next level by allowing consumers to store renewable energy and use it when they need it most. This will save businesses and schools money, give consumers control over their energy use and ensure that all Californians can participate in our transition to clean, local energy.”

Wiener states, “In California, we are pushing aggressive renewable energy goals because we know that fighting climate change means taking action now. These two bills will push us down the path to 100 percent renewable energy. To meet our goals, we need solar and other renewable energy in every city and neighborhood in California, not just those that can afford it. These bills will transform solar power and energy storage so that all can reap the benefits of clean, renewable energy.”

As previously mentioned, all three of the newly passed bills now head to the California Assembly.


California Assembly Passes Bill To Extend Solar Thermal Incentives

By Joseph Bebon, Solar Industry Magazine

By a vote of 48 to 22, the California State Assembly has passed A.B.797, a bill that would extend consumer incentives for solar thermal technologies. According to the California Solar Energy Industries Association (CALSEIA), the bill is part of the state’s ongoing efforts to reduce natural gas use, meet greenhouse-gas reduction goals and support economic development. It now goes to the state Senate for consideration.

“I am pleased the Assembly took the important step of passing this bill and sending it to the Senate,” says Assembly Member Jacqui Irwin, D-Thousand Oaks, author of the bill. “Using California’s warm sunshine to do something as simple as heating water is sensible for our state and a key way to protect public health, clean up our air, and support local jobs.”

The largest markets for solar thermal technologies, such as solar water heaters, are multi-family housing buildings and commercial swimming pools, such as at schools and community centers. According to CALSEIA, a typical residential solar hot water system can help homeowners reduce up to 80% of their natural gas use for water heating, and costs around $7,500. Under the program extended by A.B.797, consumers would receive a rebate that can be coupled with the 30% federal tax credit to reduce the overall cost of the system.

The bill reported out of the Assembly would extend the existing California Solar Initiative (CSI)-Thermal program for two years to 2020, continuing the program seamlessly. CALSEIA says the California solar thermal market is growing, especially in the multifamily housing sector – with 32% annual growth between 2015 and 2016 in natural gas savings. The bill would also target significant resources for solar thermal on low-income housing and buildings in disadvantaged communities.

“To meet our statewide climate change goals, especially on the heating side of the equation, we need consistent programs that increase access to the sun for California homes and businesses,” comments Kelly Knutsen, senior policy advisor of CALSEIA, co-sponsor of A.B.797. “We thank Assembly member Irwin for her strong leadership on this important issue.”

“There’s no better way to heat our water than by the sun, and A.B.797 is critically needed to promote the continued growth of solar heating technologies,” adds Michelle Kinman, clean energy advocate with Environment California, the other co-sponsor of the bill. “The CSI-Thermal program is an essential part of how we can meet the challenges of our heavy natural gas use and, at the same time, further the state’s greenhouse-gas emission reduction goals.”

According to CALSEIA, solar thermal projects installed under the CSI-Thermal program reduced natural gas use across the state by over 5.6 million therms each year, equal to the annual amount of natural gas used to heat water for roughly 31,500 homes. The program has offset over 30,000 metric tons of CO2(eq) annually, comparable to taking over 6,400 cars off the road each year, the group adds.