Posted by never on May 8, 2007, 11:53 am
http://www.latimes.com/business/la-fi-solar8may08,1,4075910.story?coll=la-headlines-business
http://www.latimes.com/business/la-fi-solar8may08,1,4075910.story?page=2&track=crosspromo&coll=la-headlines-business
Rebate rule chills sales of solar
Installers fear collapse as many homeowners choose to avoid associated
higher utility costs.
By Marc Lifsher, Times Staff Writer
May 8, 2007
SACRAMENTO — California homeowners are rejecting new rebates for solar
power equipment, saying the state has made installing the rooftop
panels far more costly than expected.
As a result, Public Utilities Commission reports show a decline of 78%
in rebate requests in the first three months of this year, compared
with last year, and the solar installation industry says it is
threatened with collapse across much of California.
At issue is a requirement the state added Jan. 1 for getting a rebate
under Gov. Arnold Schwarzenegger's Million Solar Roofs program.
Applicants must first sign up for costly pricing plans offered by
utilities that charge more for their electricity during hours of peak
demand.
Alfred Cellier had plans to install a $17,000 solar system at his
Rancho Palos Verdes home until he penciled out the cost of the new
state requirements and decided against it.
The retired electronics engineer said he was all for solar power
"because it's green and the right thing to do, but I don't want to be
treated unfairly."
Sue Kateley, executive director of the California Solar Energy
Industries Assn., said the rebate changes backfired. "It's a mess,"
she said. "It was everyone's intent to expand the use of solar in
California, not throw it into the ditch."
Many homeowners quickly decided that it might not be worth going solar
under the new requirements. The costs would be burdensome for those
who couldn't afford or lacked the roof space to buy systems that would
supply all of their electricity needs.
The unintended glitch was created in December, when the PUC moved to
implement the law by requiring that solar users switch to the higher
"time of use" rates for their supplemental electricity.
Industry experts say that with the higher rates, solar power offers
less savings on electricity bills and may not justify the investment
of more than $10,000 in solar panels — even with a rebate of as much
as 50% of the cost and a federal tax credit.
What's worse, some people in the Inland Empire and the desert might
see their bills rise after putting solar panels on their roofs, the
experts add.
"The solar industry in the desert in the Southern California Edison
territory is dead until this thing is fixed," said Pat Conlon, an
energy-efficiency expert with the city of Palm Desert. "As of Jan. 1,
there have been no new installs."
He said a YMCA in Palm Desert decided against a solar system after
managers concluded that future savings on electricity would not cover
the cost of installing the rooftop panels.
Under the new program, homeowners filed rebate applications for
systems generating 1,415 kilowatts of solar power statewide in the
first three months of this year. A year earlier under the previous
program, the state approved applications totaling 6,417 kilowatts.
Embarrassed state officials are scrambling to fix the problem.
"The fact that some customers may find themselves paying higher
electricity bills if they decide to install solar … is unfortunate and
indeed perverse," California PUC President Michael R. Peevey said in a
recent letter to legislators.
"It's sort of a screw-up," said solar advocate V. John White,
executive director of the Center for Energy Efficiency and Renewable
Technology in Sacramento.
On the hot seat is Schwarzenegger, who in August signed legislation
that sought to provide $3 billion in rebates over 10 years to boost
the use of nonpolluting solar power.
Only last month, he bragged about his California Solar Initiative in
an Earth Day radio address — with no mention of its lack of early
success.
Bill Maile, a spokesman for the governor, conceded that the solar
program was flawed. The administration is considering asking the
Legislature to quickly pass a law that would make solar power more
affordable, he said.
The governor also asked the PUC to work with the state's three
investor-owned utilities to come up with "a properly designed rate
structure" that doesn't penalize solar owners, Maile said.
Time-of-use electricity rates are higher during hours of peak demand,
such as hot summer afternoons, and much lower in the early morning,
late evening and at night.
The difference between peak and off-peak rates is particularly large
in the 11 counties of Central, coastal and Southern California, where
Edison provides electricity service to 13 million customers.
Edison charges summer time-of-use rates that range from 29.7 to 35.9
cents per kilowatt-hour between 10 a.m. and 6 p.m. on weekdays. It
drops to a range of 16.3 to 18.6 cents per kilowatt-hour from 10 p.m.
to 6 a.m. weekdays and all weekend days and holidays, according to
documents filed with the PUC.
Edison's time-of-use rates are a problem for solar households that
can't produce enough energy to make them self-sufficient, industry
experts say.
"We've come to the conclusion that we can no longer sell to a good
percentage of potential clients because they don't have a roof that is
big enough," said Patrick Redgate, owner of Ameco, a Long Beach solar
installation company with 33 years in the business. "This is kind of a
punishment for people going solar."
Another installer, Gordon Bloom, executive vice president of GenSelf
Corp. in Irvine, said he had been forced to lay off two employees
after doubling his workforce in 2006. "Residential sales in the Edison
territory are down 75%, and I've only gotten eight new jobs this
year," he said.
The solar industry in March petitioned the PUC to reverse its decision
on rates.
Action can't come soon enough for the already strapped solar
installation industry, said consultant Glenn Harris. Harris says that
the residential market in California could collapse in 100 days if
high electricity rates scare potential customers away from buying
rooftop solar systems.
"If they don't make sales in the next two or three months, they'll
have to lay their guys off and say, 'I'm sorry,' " he said.
For its part, Southern California Edison says a short-term fix would
require that the Legislature and PUC abandon current time-of-use
rates. "The only way that this can be resolved so that nobody gets a
higher rate than would otherwise be the case would be to make
time-of-use rates optional," said Akbar Jazayeri, Edison's vice
president for revenue and tariffs.
Time-of-use rates are constraining solar sales but are less of a
problem in the areas served by California's other investor-owned
utilities, Pacific Gas & Electric and San Diego Gas & Electric,
analysts say. Ratepayers at publicly owned utilities, such as the Los
Angeles Department of Water and Power, are not affected by the PUC
rate ruling and operate their own solar installation incentive
programs.
Solar installation firms, environmentalists and government officials
are dumbfounded that the much-lauded solar program has had such a
rough start.
"These are very real problems," said Bernadette Del Chiaro, a lobbyist
for Environment California. "Nobody foresaw the outcome would be a
whole set of consumers basically priced out of the market."
--------------------------------------------------------------------------------
marc.lifsher@latimes.com
Posted by Brian Graham on May 8, 2007, 3:17 pm
A rebate of 50% of the cost! WOW! None here in Canada. Well, technically not
true. I think if you have a system professionally installed - read LABOUR $$$ -
then you can get the Fed tax back. Or something like that. :-/
Still, even with rebates like that, I'm not sure I'd want to be grid-tied. I
like standalone!
But yeah, to have hydro costs INCREASE because you paid to have solar installed
- that's nuts!
--
Brian
http://www.latimes.com/business/la-fi-solar8may08,1,4075910.story?coll=la-headlines-business
http://www.latimes.com/business/la-fi-solar8may08,1,4075910.story?page=2&track=crosspromo&coll=la-headlines-business
Rebate rule chills sales of solar
Installers fear collapse as many homeowners choose to avoid associated
higher utility costs.
By Marc Lifsher, Times Staff Writer
May 8, 2007
SACRAMENTO — California homeowners are rejecting new rebates for solar
power equipment, saying the state has made installing the rooftop
panels far more costly than expected.
As a result, Public Utilities Commission reports show a decline of 78%
in rebate requests in the first three months of this year, compared
with last year, and the solar installation industry says it is
threatened with collapse across much of California.
At issue is a requirement the state added Jan. 1 for getting a rebate
under Gov. Arnold Schwarzenegger's Million Solar Roofs program.
Applicants must first sign up for costly pricing plans offered by
utilities that charge more for their electricity during hours of peak
demand.
Alfred Cellier had plans to install a $17,000 solar system at his
Rancho Palos Verdes home until he penciled out the cost of the new
state requirements and decided against it.
The retired electronics engineer said he was all for solar power
"because it's green and the right thing to do, but I don't want to be
treated unfairly."
Sue Kateley, executive director of the California Solar Energy
Industries Assn., said the rebate changes backfired. "It's a mess,"
she said. "It was everyone's intent to expand the use of solar in
California, not throw it into the ditch."
Many homeowners quickly decided that it might not be worth going solar
under the new requirements. The costs would be burdensome for those
who couldn't afford or lacked the roof space to buy systems that would
supply all of their electricity needs.
The unintended glitch was created in December, when the PUC moved to
implement the law by requiring that solar users switch to the higher
"time of use" rates for their supplemental electricity.
Industry experts say that with the higher rates, solar power offers
less savings on electricity bills and may not justify the investment
of more than $10,000 in solar panels — even with a rebate of as much
as 50% of the cost and a federal tax credit.
What's worse, some people in the Inland Empire and the desert might
see their bills rise after putting solar panels on their roofs, the
experts add.
"The solar industry in the desert in the Southern California Edison
territory is dead until this thing is fixed," said Pat Conlon, an
energy-efficiency expert with the city of Palm Desert. "As of Jan. 1,
there have been no new installs."
He said a YMCA in Palm Desert decided against a solar system after
managers concluded that future savings on electricity would not cover
the cost of installing the rooftop panels.
Under the new program, homeowners filed rebate applications for
systems generating 1,415 kilowatts of solar power statewide in the
first three months of this year. A year earlier under the previous
program, the state approved applications totaling 6,417 kilowatts.
Embarrassed state officials are scrambling to fix the problem.
"The fact that some customers may find themselves paying higher
electricity bills if they decide to install solar … is unfortunate and
indeed perverse," California PUC President Michael R. Peevey said in a
recent letter to legislators.
"It's sort of a screw-up," said solar advocate V. John White,
executive director of the Center for Energy Efficiency and Renewable
Technology in Sacramento.
On the hot seat is Schwarzenegger, who in August signed legislation
that sought to provide $3 billion in rebates over 10 years to boost
the use of nonpolluting solar power.
Only last month, he bragged about his California Solar Initiative in
an Earth Day radio address — with no mention of its lack of early
success.
Bill Maile, a spokesman for the governor, conceded that the solar
program was flawed. The administration is considering asking the
Legislature to quickly pass a law that would make solar power more
affordable, he said.
The governor also asked the PUC to work with the state's three
investor-owned utilities to come up with "a properly designed rate
structure" that doesn't penalize solar owners, Maile said.
Time-of-use electricity rates are higher during hours of peak demand,
such as hot summer afternoons, and much lower in the early morning,
late evening and at night.
The difference between peak and off-peak rates is particularly large
in the 11 counties of Central, coastal and Southern California, where
Edison provides electricity service to 13 million customers.
Edison charges summer time-of-use rates that range from 29.7 to 35.9
cents per kilowatt-hour between 10 a.m. and 6 p.m. on weekdays. It
drops to a range of 16.3 to 18.6 cents per kilowatt-hour from 10 p.m.
to 6 a.m. weekdays and all weekend days and holidays, according to
documents filed with the PUC.
Edison's time-of-use rates are a problem for solar households that
can't produce enough energy to make them self-sufficient, industry
experts say.
"We've come to the conclusion that we can no longer sell to a good
percentage of potential clients because they don't have a roof that is
big enough," said Patrick Redgate, owner of Ameco, a Long Beach solar
installation company with 33 years in the business. "This is kind of a
punishment for people going solar."
Another installer, Gordon Bloom, executive vice president of GenSelf
Corp. in Irvine, said he had been forced to lay off two employees
after doubling his workforce in 2006. "Residential sales in the Edison
territory are down 75%, and I've only gotten eight new jobs this
year," he said.
The solar industry in March petitioned the PUC to reverse its decision
on rates.
Action can't come soon enough for the already strapped solar
installation industry, said consultant Glenn Harris. Harris says that
the residential market in California could collapse in 100 days if
high electricity rates scare potential customers away from buying
rooftop solar systems.
"If they don't make sales in the next two or three months, they'll
have to lay their guys off and say, 'I'm sorry,' " he said.
For its part, Southern California Edison says a short-term fix would
require that the Legislature and PUC abandon current time-of-use
rates. "The only way that this can be resolved so that nobody gets a
higher rate than would otherwise be the case would be to make
time-of-use rates optional," said Akbar Jazayeri, Edison's vice
president for revenue and tariffs.
Time-of-use rates are constraining solar sales but are less of a
problem in the areas served by California's other investor-owned
utilities, Pacific Gas & Electric and San Diego Gas & Electric,
analysts say. Ratepayers at publicly owned utilities, such as the Los
Angeles Department of Water and Power, are not affected by the PUC
rate ruling and operate their own solar installation incentive
programs.
Solar installation firms, environmentalists and government officials
are dumbfounded that the much-lauded solar program has had such a
rough start.
"These are very real problems," said Bernadette Del Chiaro, a lobbyist
for Environment California. "Nobody foresaw the outcome would be a
whole set of consumers basically priced out of the market."
--------------------------------------------------------------------------------
marc.lifsher@latimes.com
Posted by dold on May 8, 2007, 3:26 pm
never@million wrote:
>
<http://www.latimes.com/business/la-fi-solar8may08,1,4075910.story?coll=la-headlines-business>
> Industry experts say that with the higher rates, solar power offers
> less savings on electricity bills and may not justify the investment
> of more than $10,000 in solar panels ? even with a rebate of as much
> as 50% of the cost and a federal tax credit.
What? No way! The high rates are the best part!
> Embarrassed state officials are scrambling to fix the problem.
Hmm. Is that nonsense, or did I miss something?
> "It's sort of a screw-up," said solar advocate V. John White,
> executive director of the Center for Energy Efficiency and Renewable
> Technology in Sacramento.
Uh-oh.
> Edison charges summer time-of-use rates that range from 29.7 to 35.9
> cents per kilowatt-hour between 10 a.m. and 6 p.m. on weekdays. It
> drops to a range of 16.3 to 18.6 cents per kilowatt-hour from 10 p.m.
> to 6 a.m. weekdays and all weekend days and holidays, according to
> documents filed with the PUC.
Right, it's wonderful! Buy low, sell high!
> Edison's time-of-use rates are a problem for solar households that
> can't produce enough energy to make them self-sufficient, industry
> experts say.
Oh. ;-(
If you install a properly sized system, the TOU rates give you leverage.
You can zero the bill without zeroing the energy usage. That's where I am
with my system.
With a smaller system, you could still take advantage of the tiered rate
structure, with the PV knocking off the high cost tiers, and leaving the
lower cost usage in place. But according to this article, you would want
that at the non-TOU rates.
During the heat wave last summer, I did have high usage, and a PG&E bill of
$108, but I avoided what would have been a PG&E bill of $357 if I had no
PV. It still looked like a good deal to me. If I had E1 instead of the E7
TOU, I would still have avoided $95 in billing, so the TOU was still
favorable, even though it provided less than half of my energy that month,
as opposed to 93% in May.
I wonder what the numbers are for the people where TOU wasn't calculating
out favorably. I can see the potential for it happening, but I wonder
about the sizes and numbers involved.
--
Clarence A Dold - Hidden Valley Lake, CA, USA GPS: 38.8,-122.5
Posted by Rick F. on May 9, 2007, 4:14 pm
> With a smaller system, you could still take advantage of the tiered rate
> structure, with the PV knocking off the high cost tiers, and leaving the
> lower cost usage in place. But according to this article, you would want
> that at the non-TOU rates.
> During the heat wave last summer, I did have high usage, and a PG&E bill of
> $108, but I avoided what would have been a PG&E bill of $357 if I had no
> PV. It still looked like a good deal to me. If I had E1 instead of the E7
> TOU, I would still have avoided $95 in billing, so the TOU was still
> favorable, even though it provided less than half of my energy that month,
> as opposed to 93% in May.
> I wonder what the numbers are for the people where TOU wasn't calculating
> out favorably. I can see the potential for it happening, but I wonder
> about the sizes and numbers involved.
Hmm.. I might have to contact my solar contractor and get his opinion on this..
I signed a contract last December but have yet to get the installation done
and this is the first time I've heard of this "deal"... I'm hoping that since
I signed up in December, that I fall under the old plan -- whatever that was..
Posted by dold on May 9, 2007, 5:09 pm
> > I wonder what the numbers are for the people where TOU wasn't calculating
> > out favorably. I can see the potential for it happening, but I wonder
> > about the sizes and numbers involved.
> Hmm.. I might have to contact my solar contractor and get his opinion
> on this.. I signed a contract last December but have yet to get
> the installation done and this is the first time I've heard of this
I went through an exercise in Excel, reducing the output of my 4500 DC peak
watt system to 2500 DC peak watts, which was a system that I had
considered, the next smaller inverter.
I don't see that as a bad thing.
Using E7 schedules for PV against E1 "pre-solar", It doesn't generate
as much E1 avoided energy cost, but it wouldn't cost as much to
install either. It does knock off the top tiers in PG&E tiered rates.
I calculated the prorated credits on E-6 as well, but I can't project
the E6 charges, because I don't know how much to put in each of the
three rate periods.
Smaller might be worse. My installer said that they have always advised
customers to go with E-1 based on their projections of E7 verses E1.
The limiting factor would be the customer's budget for installation, or
the roof space and solar availability of the installation site. They are
waiting for an adjustment by the PUC to allow them to do that again.
Their projections were very good for my system.
--
Clarence A Dold - Hidden Valley Lake, CA, USA GPS: 38.8,-122.5
http://cdold.home.mchsi.com/Solar-generation.htm $1643 avoided in 2006.
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