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. 
 

Solar Selfie of a Happy Repower Homeowner

[Originally published May 8, 2015]

When Jeff Tweddale moved from redwood country to sunny Davis, he went solar. Motivated by his general philosophy of energy conservation, Jeff said, "I never doubted it. There are so many options for how we go solar. Anybody who lives in a places that generates so much sunlight is stupid not to go solar." 

The thing that caused him to act so quickly was the hungry sound of his swimming pool pumps guzzling non-renewable electricity. It was wasteful. 

Jeff checked out a few companies, Sunpower and Solar City included. Why did he choose to go solar with Repower? Local owners and the local ownership model. He wanted to invest his money in the long-term of solar to own. With Repower, the solar energy system will stay with the house, if and when he sells it.  The economics of Repower's plan, plus his own personal commitment to energy conservation, sealed the deal.

And, now that he's generating his own electricity, he feels great. In Jeff's own words, going solar makes him feel:

"Excellent. Confident. Appropriate. Empowered."

The installation went "perfectly well and took only six weeks, from beginning to end. Repower gave excellent presale support, and Chris and John were very thorough." 

A Solar Story that Began with Love

[Originally published April 23, 2015]

Richard Kaiser fell in love. Then he moved to Davis to be with his darling and her children. They lived in her home and decided to remodel the inside. In the throes of renovation, Richard bumped into his friend and Repower homeowner, John Mott-Smith, who suggested they go solar with Repower.

"I never talked with anyone else. I'd trust John with my life. And I know that he never wastes money. I don't have a bone to pick with PG&E, but I liked the idea of making our own electricity and saving money. The economics seem to work out.

"Repower's solar energy system installation process was a lot quicker than I expected. It was painless, quick, sooner-than-later."

Repower is community-focused. Richard's story illustrates just how powerful friends and neighbors can be. And this is exactly what energizes our Repower team. 

Solar: No Longer Just for Idealists

[Originally published April 14, 2015]

The Idealist and the Pragmatist; two sides of the same behavioral coin. For idealists, repowering a home with solar creates a playground for exploration, discovery, bragging rights, and the “cool factor.” The idealists can afford to do the “right” thing. Pragmatists, while also excited about doing new things, are a bit more cautious. Decision-making is driven by doing the “smart” thing.

What does it take for solar to become commonplace? To shift from the “cool” thing to do, to the “smart” thing to do?

With any emerging, high-growth market, potential customers can be segmented into Idealists and Pragmatists, and few markets better exemplify this dichotomy than solar power. The idealists are the likes of James Tennant Baldwin, who in 1977, 138 years after the discovery of the photovoltaic effect, built the world’s first building to be completely powered by wind and solar energy. Idealists are visionaries like President Jimmy Carter, who installed solar panels on the white house in 1977 and created the first federal incentives for solar energy systems.

The answer to my question above, is time. For technologies to become ready for the mass market, it takes time. And that time, that shift, is now. When President Carter repowered the White House with solar, the systems cost in the area of $20/watt. Alternative energy sources used to be too cost prohibitive for the average homeowner, and were limited to wealthy environmentalists and early adopters, the “I’m cool, but I’m not mainstream” group; a fairly small demographic. The high cost was worth the “cool factor.”

Fast forward to today. In 2013, more solar was installed in California than the prior 30 years... Combined. And, in 2013, the average cost of residential solar systems in Yolo County was $4.90 per watt. Today, homeowners who take advantage of the RepowerYolo group discount are enjoying even more significant savings, purchasing solar for $3.30-$4.00/watt. Instead of paying PG&E every month, Yolo County homeowners are profiting from the sun, earning a 10-18% annual investment return while increasing the value of their homes.

What does this mean? It means that solar energy is no longer reserved for the idealists. Repowering a home is now affordable, feasible, and profitable for the average homeowner. And the best part about solar energy? It is now the smart thing to do, while remaining the right and cool thing to do. Solar power reduces or even eliminates your electric bill, it helps the environment, and it’s easy.

The key to successfully repowering your home is to understand and leverage opportunities. Community-centered programs like RepowerYolo help eliminate the guesswork, and assure the best possible price. When a community leverages its purchasing power, homeowners can secure an even greater price reduction than before.

So what is the breakdown? This is the year to repower your home. Solar is easy and affordable, it’s the right thing to do, it is the cool thing to do, and now, it is the smart thing to do.

Repower Homeowner Reaches Net Zero and Projects Surplus

[Originally published April 9, 2015]

We recently received this email from Repower homeowner, Fred Lee:

"Today is an important milestone in our solar cell operation in that the PGE smart meter today reads the same as the day we officially started operation of the solar cells on July 15, 2014.  This means that the solar cells have generated as much electricity as we have used since July 15, 2014. From now till next October we will be generating more electricity than we use and will be able to sell the excess to PGE next July on the one year anniversary of the solar cell operation. We expect to generate at least 50 kW/day over the summer and early fall. In a couple of months we will generate sufficient electricity to pay off the monthly cost of the loan that we took to pay for the solar cells."  

And there you have it, directly from one of our homeowners. Great news! We'd love to help you repower with solar. Just give us a call or submit your contact information.

California Poppies, Sandwiches and Solar Panels

[Originally published April 2, 2015]

California’s state flower, the California Poppy, aka Eschscholzia californica, is the perfect representative of our Golden State. It opens its petals to sunshine, closes them at night and on cloudy days. Sounds a lot like a solar energy, n’est-ce pas?

Equally enchanting is the photovoltaic cell. Photovoltaic meanschanging light into energy. (tweet this!) And when you link a lot of photovoltaic cells together, you’ve got a solar panel.

"Each photovoltaic cell is basically a sandwich made up of two slices of semiconducting material, usually silicon—the same stuff used in microelectronics.” (www.livescience.com)

Phosphorus and boron are added to this silicon sandwich to create an electric field. These photovoltaic cells allow particles of light, photons, to knock electrons free of the atoms in order to generate electricity. When a photon of sunshine knocks an electron free of its atom, the electric field created expels the electron out of the silicon junction. (All made possible by the application of Einstein’s Nobel Prize winning work on the photoelectric effect.) Metal conductive plates along the sides of this tiny energy-sandwich then collect the electrons and transfer them to the wires. Sun-generated electricity!

For a more detailed explanation of how solar panels work, check out How Do Solar Panels Work? at www.livescience.com. 

When going solar DOES NOT make sense

[Originally published April 1, 2015]

Most solar companies try to convince you that it is always a sound financial decision to go solar because, ahem,selling solar systems is how they make money.  The RepowerYolo Community Program is different. If going solar is not going to save you money on your PG&E bills or work with your roof or landscape, RepowerYolo will say so.  So ... in addition to bringing our friends and neighbors in Yolo County together to generate significant savings on their solar installations (through a group purchase discount), the RepowerYolo Community Program makes sure people get the facts straight-up, even if it means that going solar doesn't make sense for them.

For Example ....  

A Yolo county homeowner came to us for a free analysis of her home for solar. After looking at her historical PG&E bills, the fixed costs of installing a system (permits and engineering fees, for example) in relation to the energy that would be generated, and the age of her roof, it was clear that the expense of going solar would take too long to recoup in savings on her electricity bills.

 

Already Super Energy-Efficient

The economics of going solar weren’t great for this particular homeowner because she was already environmentally frugal—the money she spent on a solar energy system would require nearly two decades to recover because of her low electricity use.

 

Older Roof

In addition, her roof will need replacing soon and it was hard to justify installing solar panels that would need to be removed and reinstalled when she replaced her roof. Installing solar panels at this point would have upped her cost of producing her own energy.

 

Smaller System

The homeowner’s fixed costs on the small system she needed would be spread out across so few panels that the system costs per unit would be high … too high.

 

Yes or No, Our Approach Remains the Same

This homeowner asked great questions. Even after RepowerYolo advised her that going solar did not pencil, given the above factors, we invited her to call any time. Conversations are no pressure and transparent. Whether or not you choose to become a RepowerYolo homeowner, we will be accessible and responsive to you. If you do go solar via the RepowerYolo Community Program, we will be as available to you after your solar energy system installation as we were before and during.

Cool Davis Announces Partnership with RepowerYolo

[Originally published March 19, 2015]

Nearly one year ago (April 28, 2014), Cool Davis announced our partnership. We couldn't have been more pleased to team up with such a worthy initiative!  In fact, since last year, Cool Davis and Repower have come together in many ways. For example, Cool Davis has an office within the Repower office. Chris Soderquist serves on Cool Davis's Board of Directors, while John Walter helps design and oversee Cool Davis's events. 

From the Davis Enterprise: Repowering Yolo County with the sun’s energy

[Originally posted March 19, 2015]

Thanks to Davis Enterprise reporter Felicia Alvarez for her profile of RepowerYolo: 

How do you get 1,000 homeowners to go solar?

This is the question that Chris Soderquist, co-owner of RepowerYolo, asked himself when he started a new solar company in Davis in 2013. An environmental activist and clean energy businessman, Soderquist launched RepowerYolo alongside John Walter to support homeowners in making Davis a clean-energy city.

After seeing friends and neighbors attempt to add solar power to their homes, only to end up with low guarantees and high prices, Soderquist and Walter took matters into their own hands and founded RepowerYolo.

The company uses group purchasing to reduce the cost of installing solar panels on homes and businesses. Instead of purchasing solar units individually, group-purchasing power allows a single homeowner to buy solar panels at the bulk price, the same price per unit as if 100 units were purchased at once.

RepowerYolo works as a project manager alongside solar contractors. The company, in turn, helps ensure that homeowners are getting the exact unit they need and are able to finance it in a way that works best for them.

Fred Lee, an El Macero homeowner, went solar through RepowerYolo last June.

Lee recalled receiving “massive” PG&E bills every July and December, amounting to $800 to $1,000 a month. With their two sons away at college, Lee and his wife turned toward solar to reduce their energy costs.

Today, 40 solar panels, each generating 270 kilowatts, cover his rooftop and provide more energy than his home uses, producing up to 450 kilowatt hours of energy. Using a 4-percent interest loan from Yolo Federal Credit Union, the Lee family purchased the panels for $40,000; they’re expected to be paid off within seven years.

Lee’s $800 monthly PG&E bill plummeted to $30 after the addition of the solar panels.

“If you analyze the situation, you can really cut back on electricity and gas,” Lee said, marveling at the difference made by moving away from the 8kwh electric heater that once warmed his home.

Two concurrent trends — PG&E’s rising rates and improvements in solar technology — have made solar power more accessible to homeowners, Soderquist explained.

In 2013, solar power dropped from $4 per watt to $1 per watt. The technology only continues to improve as more homeowners become interested in solar.

Meanwhile PG&E’s rates have risen from 10 cents per kwh to 16.5 cents per kwh over the past seven years. Rates are expected to continue to increase over the next few years, according to Soderquist.

Money isn’t the only thing on consumers’ minds, however.

“We have homeowners in their 60s and 70s that feel like it’s the right thing to do,” Soderquist said, “They feel that it’s right for their grandkids, good for the environment … and good for their planet.”

How to pay for it

RepowerYolo uses several different financing methods, including PACE (Property Assessed Clean Energy) financing, Yolo Federal Credit Union loans, home equity lines of credit and cash.

About 15 percent of Repower’s customers use PACE, 25 percent use credit union loans, 25 percent use home equity lines of credit, and the remaining 35 percent pay with cash, according to Charles Soderquist.

PACE financing gives homeowners the option of purchasing solar power panels and other improvements such as drip irrigation and insulation through no-money down payments that are added to a homeowner’s property tax bill. The taxes are collected over a 20-year period at 8 percent interest.

The Yolo Federal Credit Union also offers loans for solar installation and home equity lines of credit that can cover all of the costs of adding solar to a home, if a homeowner is eligible.

Top 5 Reasons Yolo County Homeowners Go Solar

[Originally posted March 18, 2015]

We’ve had the fortune of discussing solar with several hundred homeowners and community members. Some of the conversations are cursory — quick chats at The Farmers Market or at a coffee shop (we love Mishkas) — while others are more in-depth. No matter the rigour of the dialogue, we always ask the same question: Why Solar?

Yes, it is a very open-ended, extemporaneous question, but we often receive similar responses. Here are the top 5 reasons why Davis homeowners want to, and decide to, go solar.

 

1. I’m sick of PG&E and I want to slash my electrical bill.

Bingo. The primary motivation. A quick anecdote from a conversation last week: Why should I write a check to PG&E every month when I can generate electricity from a free (the sun) resource? RepowerYolo homeowners are saving, on average, $265 per month in PG&E electricity costs.
 

2. The cost of solar has gone down, but PG&E bills keep going up.

Correct and correct. The average cost of electricity for RepowerYolo homeowners, prior to installing solar, is approximately 23 cents per kilowatt hour; with solar, the amortized cost of solar electricity is between 8 and 11 cents/kilowatt hour. And, while PG&E rates will continue to rise, your cost of solar electricity will stay fixed.
 

3. I want to make sure the timing is right and I’m getting a good deal.

Most people do not want to be first (or be an “early adopter”). Fortunately, solar technology has matured considerably and the confluence of reduced solar costs and increased PG&E costs addresses the timing question. In terms of a good deal, of course, everyone wants to make sure they’re getting one. With RepowerYolo, homeowners are saving an average of $5,300 through their community group purchase discount (compared to the average cost of solar in 2013).

 

4. The planet is warming; I want to do my part. It’s the right thing to do.

Last week we discussed the behavioral pivot from idealists to pragmatists. Now that solar electricity is less expensive than PG&E electricity, what used to be a nice-to-have, icing-on-the-cake virtue of solar — environmental benefits — has become a primary motivator for idealists and pragmatists alike. Quick stats on the average RepowerYolo home:

- Eliminates 175 metric tons of carbon dioxide from the atmosphere.

- Equal to eliminating 36 cars’ annual emissions

- Represents 4,500 tree seedlings grown for 10 years
 

5. My neighbor has solar, and I think it is cool!

Studies have shown homeowners are twice as likely to go solar if a neighbor on their street has also gone solar. We are seeing this “neighborhood effect” in Davis … if my neighbor, who I know/trust, did it, then I should consider it too.

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. 

Frequently Asked Questions About Solar

[Originally posted February 26, 2015]

How much does a solar system cost?

In the first nine months of 2013, the average per-watt cost of residential solar systems installed in Yolo County was $4.90. Through RepowerYolo’s group purchase program, you will receive the same or higher-quality system at a significant discount, generally 15-25% less than average market prices. For example, a typical home will have a 6 kW (DC) system with a turnkey investment of $24,000 (or less). Your system’s size and cost will depend on your home’s energy use and how much of your PG&E bill you would like to offset.

We are able to offer you a significant discount by aggregating the purchasing power of Yolo County residents and, frankly, by significantly reducing sales and marketing expenses (and the profit we generate).

 

Are PG&E’s rates going to increase?

Over the past 30 years, PG&E’s electricity rates have increased an average of 5.7%; individual years were highly unpredictable, ranging from -3% to more than 8%. PG&E recently requested, in its California Public Utilities Commission rate case, an increase of $5.33 billion in rates over the next three years. If PG&E’s request is approved, electricity rates will, on average, increase 18.8% in 2014, and 6% per year in 2015 and 2016. To be conservative, our analysis for your solar system assumes only 3% annual PG&E cost increases.

PG&E puts you in a tough position: They operate a regulated monopoly (as the only provider of electricity), and you have no say over rate increases. Your bill simply increases. However, with solar you will benefit from PG&E rate increases. Generating your own power locks in the rate you pay for the next 25 years … as PG&E increases its rates, your savings magnify.

 

Will solar increase the value of my home?

Yes, if you own (versus lease) your solar system. The National Bureau of Economic Research (NBER) recently released an analysis that found solar panels add between 3 percent and 4 percent to the value of a home. Their conclusion is consistent with a 2013 Lawrence Berkeley National Laboratory study that found solar panels have a “sizeable effect” on home prices.

 

Can I finance my solar system?

Yes. We work with a number of community banks that provide competitive financing alternatives, and we can help you obtain and assess such options. Furthermore, your home may qualify for financing through Clean Energy Yolo PACE financing program. Clean Energy Yolo funds 100% of the solar system costs, with payments collected through your property taxes over a 20-year period. If you sell your home, the benefit of the solar system (along with the responsibility to make property tax payments) transfers to the new owner.

 

What rebates and incentives are available?

You will receive a Federal Investment Tax Credit of 30% of your total system cost – in essence, a 30% discount (since it’s a dollar-for-dollar tax credit) incentive to go solar. The Investment Tax Credit is available through the end of 2016 and may be carried back one year or forward for 20 years.

 

What are the warranties?

The solar panels and power inverter have standard, 10-year warranties. The panels have a 25-year production warranty, guaranteeing power generation.

 

How long will my solar system last?

Most solar systems outlast their 25-year production warranties; many of the first solar systems installed more than 30 years ago are still going strong. 

 

Is it difficult to switch to solar power?

No. Repowering your home with solar is simple and hassle free. We will get your solar system up and running as quickly and smoothly as possible so that you can start saving money and using clean energy. You won't experience any changes or disruptions inside your home. 

 

What determines how well my system generates electricity?

The efficiency of generating electricity is primarily governed by the amount of light (photons) striking your solar panels. Panels facing south and tilted at an angle equal to your latitude yield the best yields. Shade from trees, other obstructions, or even clouds reduce – but do not eliminate – electricity generation. Other factors influencing generation are related to the efficiency of panels, the inverter, and the quality of the installation (wiring, connections, heat-reducing construction). Optimally oriented, high quality, stationary panels and inverters installed with best practices convert 13-18% of sunlight into electricity.

 

How do I benefit from electricity generated but not used immediately, and do I need batteries?

PG&E’s grid acts as your battery. When you produce more than you use, you generate credits that are applied against what you use. You only pay for the power you use.

 

What happens when it’s cloudy, raining or at night?

Under PG&E’s Net Energy Metering program, you receive a credit for every kilowatt hour of electricity your solar system generates. You will maintain connection to PG&E’s grid and will thus continue to draw power from PG&E (regardless of whether your solar system is generating electricity).

 

How long does it take to install my solar system?

From start to finish, the process will take less than one month – our goal is to get your system up and running as quickly as possible. The length of installation depends on the complexity of your roof, the permitting process, and PG&E interconnection.

 

How am I credited for the electricity my system makes?

PG&E’s net-meter, replacing your current meter, will track the power moving both directions – that is, the electricity produced by the system and sent onto the grid and the power drawn from the grid. Every six months, PG&E will “true-up” your electricity use and solar electricity generation. With solar, there is no disruption to your electrical service. The only change is a reduction in your PG&E bill.

 

Should I wait for new technology?

No, now is really the best time to invest in a solar system with the combination of proven technology, reduced solar system costs, ever-increasing PG&E rates, and Federal tax incentives. The underling benefit of turning sunlight into electricity will not change for as long as we still use electricity to power our homes.

 

What about maintenance?

Your solar energy system requires very little maintenance, largely because it has no moving parts. There is no need to wash or dust photovoltaic panels, but it is important to keep them clear of shade and debris to maximize power generation. We suggest you keep an eye on trees that may shade your system and keep them trimmed. Fortunately, the rain serves as a natural cleaning agent, and occasionally you may want to hose down your panels during dry seasons. When you repower your home, you receive one year of free monitoring and maintenance to ensure your solar system is operating at peak efficiency.

California Poppies, Sandwiches, and Solar Panels

[Originally published April 2, 2015]

California’s state flower, the California Poppy, aka Eschscholzia californica, is the perfect representative of our Golden State. It opens its petals to sunshine, closes them at night and on cloudy days. Sounds a lot like a solar energy, n’est-ce pas?

Equally enchanting is the photovoltaic cell. Photovoltaic meanschanging light into energy. (tweet this!) And when you link a lot of photovoltaic cells together, you’ve got a solar panel.

"Each photovoltaic cell is basically a sandwich made up of two slices of semiconducting material, usually silicon—the same stuff used in microelectronics.”

—www.livescience.com

Phosphorus and boron are added to this silicon sandwich to create an electric field. These photovoltaic cells allow particles of light, photons, to knock electrons free of the atoms in order to generate electricity. When a photon of sunshine knocks an electron free of its atom, the electric field created expels the electron out of the silicon junction. (All made possible by the application of Einstein’s Nobel Prize winning work on the photoelectric effect.) Metal conductive plates along the sides of this tiny energy-sandwich then collect the electrons and transfer them to the wires. Sun-generated electricity!

For a more detailed explanation of how solar panels work, check out How Do Solar Panels Work? at www.livescience.com.