The Energy Show

There is one thing for certain as you electrify your house. You’ll need more electricity. Duh!

But getting more electricity from the street to your house is not easy. Bizarrely, it often takes longer to do these electrical upgrades than it does to install your new all electric appliances.

When — not if -- your old gas hot water heater dies, you don’t want to wait months for a new 240 volt circuit for that new super-efficient electric heat pump water heater. Nor do you want to delay the installation of your new heat pump HVAC system while you wait for a new electric panel. So you need to plan in advance for these upgrades.

There are three general types of upgrades you will need as you electrify your home. First, you will need a dedicated electric circuit (wires and a separate circuit breaker) for each new appliance. Second, you may need a new electric panel if there is not enough space for these new circuits. Third — and most problematic since your utility is involved — you may need to upgrade the electric service from the street to your house.

No one likes delays and extra expenses. But there is some good news. There are tax credits and rebates that can significantly reduce these electrical upgrade costs.

Tune into this episode of the Energy Show for a detailed rundown on planning for these electrical upgrades. These upgrades take time, but you’ll thank yourself later once they are done and your electrification project proceeds smoothly.

The Inflation Reduction Act, or IRA, became law in August 2022. It's packed with incentives across the entire value chain, including domestic manufacturing, energy-efficient products, and clean saving energy.

But these fantastic incentives do not yet match the realities of what you can get today for your electrification project. The table below shows the most significant IRA electrification incentives that are available to homeowners in 2023, as well as pending IRA incentives in 2024. Many utilities, counties and cities also have localized electrification incentives, such as the SVCE and PCE rebates shown in this table.

There's a clear divide between tax credit incentives and rebate incentives. Tax credits are the heroes, with no application process, simple documentation and automatic credit on next year’s tax return. The only downside with tax credit incentives is that they only make sense for homeowners who have an annual tax liability.

Rebate incentives -- while well-intentioned — often get bogged down with paperwork, documentation and payment delay nightmares. The rebate terms in the IRA are set by the Department of Energy (DOE), and administered by state energy departments, such as the California Energy Commission (CEC). Unfortunately, even though these appealing rebates have been dangling in front of our eyes since August of 2022, the administration details and forms are not yet available to contractors and customers.

There are two other aspects of rebate incentives that you need to consider. First, the IRA rebate incentives are only available to homeowners whose average gross income is less than 150% of the local median income. Second, the additional documentation and paperwork requirements for some rebate programs exceed the value of the incentive. For example, the $1,750 IRA rebate for a heat pump water heater (HPWH) that will be available in 2024 may require a blizzard of paperwork, a contractor affidavit, code-required plumbing upgrades, and a finalized building permit — increasing costs of the HPWH project from $4,000 to $6,500. In other words, the realistic costs of getting the rebate are higher than the value of the rebate itself!

The IRA is the biggest clean energy legislation in the U.S. Ever. There is no doubt in my mind that these incentives will accelerate our transition away from polluting sources of energy. But there are a few bumps in the road to electrification. For more about the realities of the IRA for your home, please tune into this week’s Energy Show.

Batteries were everywhere at September’s RE+ Conference in Vegas. I counted over 100 different battery company and system vendors. It was more of a battery and solar tracker show than a solar show — demonstrating the rapid evolution of these clean energy technologies.

But out of a hundred batteries on the show floor, there are only half a dozen that I would recommend to homeowners. Home battery systems should provide reliable backup power during a blackout, and also generate utility bill savings. The vast majority of batteries I saw on the show were basically not ready for prime time. Here’s why…

First, you need a complete battery system, not just a battery. In addition to the battery, these systems require controls, an inverter, an enclosure, a transfer switch, communications, and a lot of software. It’s extremely important that all these major components are controlled by one company. Batteries are not “plug and play” like printers and solar panels.

Second, your battery system should be manufactured by an established company with a strong balance sheet and local service and support — not just a PO Box and a WhatApp number. I often say that it takes an army to grow a successful battery storage system company. Almost impossible to succeed on a shoestring.

Third, you need a contractor that knows how to install, configure and support the system. Solar contractors with electricians on staff are generally the most qualified. An experienced local solar contractor is best positioned to give you good advice.

Based on recent installation data from Ohm Analytics, the most popular battery systems are from Tesla, SolarEdge, SunPower, Enphase, Generac and FranklinWH.

I’m gonna go out on a limb here and be specific about my favorites. Enphase is best for small systems. FranklinWH is best for fast installations and whole home backup. SolarEdge has the most efficient system, and can install the most battery capacity in the smallest space. And Tesla is currently the least expensive and has a well-known brand name.

For more about my recommendations of home battery systems, please listen to this week’s Energy Show. You’ll get a charge out of it!

Proving the solar skeptics wrong, the U.S. Energy Information Administration (EIA) now expects that utilities will add 54.5 Gigawatts of solar generation capacity in 2023. And this capacity does not include 6.4 Gw of residential installations and 1.7 Gw of commercial installations expected in 2023.

SIDEBAR: a Gigawatt is a billion watts of power. In 1955 the eminent Dr. Emmett Brown stated that the only power source capable of generating 1.21 Gigawatts is a bolt of lightning. Obviously things have changed in the future.

For over 20 years the EIA predicted that fossil fueled power generation would continue as our leading source of new power generation. They’ve been among the biggest solar skeptics, predicting that solar would never catch up. But now, solar-generated electricity is the cheapest source for new power. By far. Utility solar plants generate electricity for less than $0.02/kwh, and residential rooftop systems generate electricity for less than $0.08/kwh. Compare that to the $0.16/kwh average costs for power in the U.S., and $0.35/kwh for the average home in California.

You may have heard about some of the solar industry "ups" (increased solar tax credits in the Inflation Reduction Act and more affordable battery storage systems) and "downs" (less favorable utility solar rates and tariffs on certain solar equipment). These ups and downs define what we in the industry call the Solar Coaster. Although challenging to predict, the one thing we can count on is that the economics for solar will continue to improve. Equipment costs are trending down, utility rates are increasing, and the reliability of the grid keeps getting worse and worse — all at the same time we are electrifying our buildings and transportation systems.

To really understand the ups and downs in the solar industry it’s necessary to look at the economic drivers in each of the main industry segments: Utility, Commercial and Residential. System costs, government policy and incumbent electric rates affect each of these market segments quite differently. In spite of this variability, the health of the overall solar industry is quite good. For a detailed dive into each of these market segments, please tune into this week’s Energy Show.

HEADLINE: Higher Electric Rates and More Blackouts

Unfortunately, this is the new normal for most of the U.S. In other words: SNAFU

This situation will not change. It’s a little-known fact that utilities use our money to influence politicians to maintain their monopoly. To the tune of $18m in California just in 2022. Government regulators are supposed to ensure that utilities provide inexpensive, reliable and safe power. However, this poorly regulated capitalism is not working. Just look at your electric bills over the past few years. Count the number of blackouts you’ve had. Heard about any wildfires recently?

Solar is the cheapest way to generate electricity, and batteries are a cost effective and reliable way to keep that power flowing. But ONLY when you own those solar panels and batteries. In spite of all the solar and battery investments made by utilities, our rates keep going up. We're experiencing record numbers of blackouts. And wildfires are becoming commonplace.

The electricity game is rigged. New electric rates in California are cheapest in the middle of the day when there is abundant solar generation. But at night rates are more than double. So ordinary solar customers are forced to sell power back at low rates during the day, and buy power at high rates at night. Buy high. Sell low.

You can beat the utilities at their own game if you have rooftop solar combined with a battery. Or two. Store your own solar-generated electricity in your battery, and then use that electricity at night. Buy low. Sell high. Plus you’ll have backup power during the next blackout. You don’t need an MBA to figure that out.

Please tune into this week’s Energy Show for more details about California’s new electric rates — and how you can save money by adding a battery to your solar system.

To learn more about how Investing in solar and storage delivers more than just keeping the lights on, please listen to this episode of The Energy Show.

Our society is moving rapidly towards electrification. Building electrification is good for the climate, good for our health, and good for our economy. We’ll all be using more electricity — it’s inevitable. Luckily, using all this extra electricity for our heating and our cars is inexpensive when you get it from rooftop solar and storage.

But utilities have a monopoly on electricity distribution. They’re rubbing their greedy hands together like Montgomery Burns, safe in the knowledge that as long as their monopoly holds, people without solar and storage will have to pay exorbitant rates for power. All the tax credits, IRA rebates and local incentives that benefit homeowners to electrify will ultimately mean even more profits for utilities -- and much higher electric bills for everyone.

Even though electricity rates are supposed to be regulated, when it comes to safe, clean and inexpensive power — money talks much more loudly than morality. It’s a little known fact that utilities around the country contribute enormous amounts to politicians. For example, in 2022 over $18 million was spent by utilities and their employees to influence California politicians, $5 million to the governor alone. That’s why the California Public Utility Commission unanimously voted to eliminate net metering for solar. Think about it: utilities are using our money to lobby the government to enforce and extend their electricity monopoly.

But you don’t have to be subject to escalating electricity rates and unreliable utility power. With rooftop solar and storage you can generate your own power at a fraction of the rates charged by your local utility. Solar and storage is the perfect complement to an electrified home, not only because your electric bills will be lower, but also because you’ll have a source of backup power during the next blackout.

For more about utilities leveraging their monopoly on electricity — and what you can do about it -- please tune into this week’s Energy Show podcast.

On this week’s show we’re talking about the first steps toward your home electrification project. What I call the Low Hanging Fruit. These are easy and cheap energy efficiency measures — most of which you can do yourself (DIY) or do not require any special contractors.

Many people recommend starting with an energy audit of your home. However, unless you're working with a local energy auditor that knows your local conditions and incentives down to the city level, the standard energy audit recommendations are almost always wrong or out of order.

Beware of utility energy audits and recommendations because they almost always ignore energy efficiency measures that cut back on their own revenues — such as installing solar and battery systems.

So here are some of the Low Hanging Fruit electrification measures that you can do on a weekend with a trip to your local hardware store:

* Replace all of your incandescent and compact fluorescent lightbulbs with LED bulbs

* Eliminate Vampire loads in your house

* Install a wifi setback thermostat

* Seal air leaks around doors, windows and ducts

One step beyond these easy measures are upgrades or electrification of your energy hog appliances. You’ll need a few more bucks for these measures, and in some cases you may want to hire a local contractor. It’s a no brainer to replace your old gas dryer with an electric dryer, change out your old pool pump with a variable speed pump, and replace your gas range with an induction cooktop.

If you live in an older home in a cold or very hot climate, consider adding insulation to your attic and walls, and changing out your single-pane windows with double or triple pane windows. But watch out, some of these building shell upgrades have long paybacks.

So my advice is to get started on these DIY Home Electrification measures. When you consider newly available local, state and federal incentives, many of these Home Electrification measures have paybacks in fewer than two years!

More heat pumps were sold in 2022 than gas furnaces. And that was before the Inflation Reduction Act (IRA) kicked in, which provides an $8,000 rebate for most heat pump installations — on top of a $2,000 federal tax credit and city/county incentives that can exceed $3,000.

Heat pumps are cleaner, more efficient and less expensive than most conventional gas furnaces and air conditioners. But the variety in heat pump system configurations, efficiency, and costs is enough to make even a geeky engineer’s head spin when trying to determine the best solution for a particular home.

My guest on this week’s Energy Show is Dennis Stinson, VP of Sales at Fujitsu General America. Dennis has been in the heat pump business for over 30 years. Along the way he’s accumulated a wealth of practical knowledge about heat pump installations for just about every type of building in the U.S.

So if you’re wondering what the difference is between a ducted and ductless system, why high efficiency heat pumps use inverters (but not the solar kind), the importance of variable speed fans and compressors, the meaning of a mini-split cassette (this happened to me when I ran over my collection of 70s classic rock tapes), the difference between SEER and COP efficiency metrics, or whether or not a roll of duct tape can seal your ducts — I think you’ll get a lot out of this week’s Energy Show.

How would you like to reduce your home energy costs, improve your health and comfort, and at the same time do your part to improve the environment?

If your answer is “yes,” then listen to this week’s Energy Show episode. If your answer is “no,” then maybe you don’t need your share of the $10,000-$40,000 incentives that are available for your home.

The concept of Home Electrification is simple: you replace gas appliances with electric appliances — either all at once, or as the old gas appliances stop working. But the whole-home electrification process can be daunting. You will need to evaluate the costs and incentives for each electrification measure, hire several different types of contractors, and then sort through their varying recommendations.

The biggest barrier to Home Electrification is that people just don’t know where to start. So here is my recommended Three Step Electrification Process:

* First, attack what I call the Low Hanging Fruit — mostly simple DIY changes like installing LED lighting, weatherstripping and home controls.

* Second, get quotes from contractors for each major project: electrical upgrades, solar and storage, heat pumps for HVAC and water heating, EV charger, induction cooktop, etc. Remember, there is no cost to just getting quotes — so don’t delay this step.

* Third, evaluate the costs and incentives for these electrification measures, define contractor schedules and get started.

In six to twelve months you’ll be delighted with much lower energy costs, a more comfortable and healthier home, and a much lower carbon footprint.

Batteries are becoming an essential part of home solar systems. With solar-connected batteries, homeowners can avoid paying peak utility electricity charges. Batteries can provide backup power during blackouts. And if you’re in California, after net metering ends in April 2023, you will need batteries to avoid peak electric rates.

In the old days, automobile-style lead acid batteries were used for backup power and time-shifting energy use. I still have holes in my old blue jeans where battery acid splashed (my kids think they are fashionable now). Starting in 2016, lithium ion batteries became popular for home use. Now, over 50% of our customers are installing batteries with their solar systems.

My guest on this week’s Energy Show is Magnus Asbo, Senior Director of Technical Marketing for SolarEdge. I’ve known Magnus for almost 15 years, starting when we worked together on the first AC solar module. He’s a wealth of knowledge when it comes to designing and installing practical battery systems.

Some of the questions that Magnus and I cover in this week’s Energy Show are:

- What are the real world kw and kwh limitations of battery systems?

- Every battery manufacturer offers a 10 year warranty on their batteries – what are the terms and limitations of these warranties?

- Rooftop solar systems don’t need a lot of care and feeding. Do battery systems need more attention?

- Is it easy for a solar installer to start installing batteries, and do they need an electrician on staff?

- How does the UL-9540a building code affect the locations in which batteries can be installed?

- Are there additional software and communication requirements for installing battery storage?

- Why do I need a battery after net metering ends in California?

If you’re thinking about installing battery storage with your solar system, you’ll get a lot out of this week’s Energy Show.