The Energy Show

Copyright 2022 - The Energy Show, Barry Cinnamon

Stop burning fossil fuels and electrify everything. That’s the path that humanity must follow to avoid a global warming calamity.

Two technological changes have made it both practical and economical to transition to an (almost) all electric economy. First, heat pumps, EVs and induction cooking are now practical replacements for furnaces, hot water heaters, gasoline-powered cars and stoves. Second, inexpensive solar and wind electricity mean that these appliances and vehicles are cheaper to operate than their fossil-fueled ancestors. Of course electric appliances are cleaner, and in many cases provide more comfort, convenience and safety.

I added the word “almost” since long distance transportation (trucks, rail, airplanes) and industrial process (steel, cement) heat are still more practical and cheaper when powered by fossil fuels. The clean solutions to these transportation and industrial processes are still a few years away.

Almost without exception, all of our potential solar customers are intrigued by the possibility of electrifying their homes. But they have two questions. First, how many more solar panels will they need for their rooftop system to power their home? Second, what will the savings be for this fossil fuel to solar conversion?

The transition to electrifying your home powered by solar is being accelerated by the crazy increases in electricity and methane costs. Here in Silicon Valley, electricity rates are going up at 10% a year, and methane (AKA natural gas) rates are going up at 8% a year. My wife also reminds me that gasoline prices are ridiculously high (I’m oblivious since I drive an EV).

So how many solar panels will be required when electrifying your home to zero out your electric and gas bills…and become carbon zero?

The answer boils down to answering four simple questions about your home:

1. What are your current electricity and methane bills per month?

2. What is the efficiency of your current appliances?

3. How many miles do you drive per year?

4. What is your home’s solar exposure?

Please tune in to this week’s Energy Show for a step-by-step overview of the incremental number of solar panels needed to fully electrify a typical home in the U.S.

Some of you may have read excerpts from the U.N.’s Intergovernmental Panel on Climate Change report. Candidly, I didn’t. Even the summaries were indecipherable. Which is probably a good thing since there is only one shred of good news in the whole report. More on that at the end.

The report — indeed, the entire process — has been depressing. We have had 20+ years of climate activism; many Inconvenient Truths; wildfires, floods, droughts; and now energy wars. Still, the economic interests from fossil fuels and related industries continue to overwhelm the necessary actions. Which is no surprise, since the solution to global warming effectively means the end of the fossil fuel industry. As a result of their logical economic interests, the world is simply not reducing the use of fossil fuels quickly enough. Atmospheric CO2 hit 421 ppm in April. Global temperature increases will be closer to 2.5C under the best of circumstances.

In order to keep global warming under 2C we need to do five things: put a high price on carbon, electrify everything, place high subsidies on renewables, place high subsidies on nuclear, and reduce methane emissions. The IPCC whitewashed these obvious actions, and instead recommend that the world just stop using fossil fuels (easy to say), find a way to remove CO2 from the atmosphere (consumes dramatically more energy than carbon capture at the source, which itself is not economical), curb demand of energy (which will reduce overall economic well-being), spend more money on clean energy (I agree), and tell rich people to use less energy (good luck). Unfortunately, there is no “how” there in these recommendations.

Instead, here are my five realistic recommendations that you personally can implement right now, all of which are practical and will have a direct impact on your quality of life.

1) Make your home carbon negative with electrification, solar and batteries. You’ll save money and have a healthier and more comfortable home. Plus, it's the best way to get back at greedy utilities.

2) Buy renewable energy and electrification stocks for you and your children.  In general these will be long-term winners. Sell your fossil fuel company stocks for moral reasons even though over the short and medium term they may do OK.

3) Do not support climate-change denying politicians in any way. The same goes for politicians who support the fossil fuel infrastructure and rail against clean energy policies such as a carbon tax.

4) Do not get a 30 year mortgage on coastal property. If you like the beach, buy a block inland or just rent.

5) Eat less meat and more locally grown fruits and vegetables. I’m not sure how much impact this will have on global warming.  But a good diet will help you live long enough to see that Al Gore was right.

The one shred of good news is that the economic benefits of renewables — solar and wind — will mean that these clean energy sources will indeed replace fossil fuels. Eventually. But not at a fast enough rate unless we put a high price on carbon. For more about the IPCC report, please tune into the next Energy Show podcast.

Copyright 2020 - The Energy Show, Barry Cinnamon

The most common question people ask about rooftop solar is: “What solar panels should I buy.” Unlike buying a car — which people do every 5 or 10 years — people buy solar panels only a few times in their life. But unlike cars, the “best” solar panel on the market at any given time typically changes every 5 or 10 years.

When we recommend solar panels the most important criteria are cost-effectiveness, efficiency aesthetics and reliability. There is not a solar panel manufacturer on the planet that does not say they have high quality manufacturing and a 25 year warranty. Unfortunately, reliability is hard to determine objectively, so the best gauge is the advice of an experienced solar installer. Or an industry expert like Paula Mints with SPV Market Research.

“Top Ten Solar Panel” lists are typically more of a popularity contest — more influenced by advertising than objective criteria. When I recently reviewed a popular Top Ten Solar Panel list I noticed that the top manufacturer no longer manufactured their own panels, and the second manufacturer recently stopped manufacturing. Panels from both of these companies are highly efficient, but in my opinion do not belong at the top of the list.

Please tune in to this week’s Energy Show as we delve into the criteria that we believe are most important for long-term customer satisfaction.

Copyright 2022 - The Energy Show, Barry Cinnamon

Ribbit or Croak. Which one are you?

An urban myth has it that if you put a frog in a pot of boiling water it will instantly leap out. But if you put it in a pot filled with pleasantly tepid water and gradually heat it, the frog will remain in the water until it boils to death.

This myth reminds me of the slow-motion train wreck we are facing from destructively high electricity and methane (natural gas) costs. We’re gradually getting boiled alive with increasing energy prices. Don’t believe me? Just look at California’s residential electricity and methane prices over the past few decades as reported by the Energy Information Administration.

Average single family home electric rates increased at an annualized rate of 3% from 2000 to 2015. These increases accelerated to 6% from 2016 to 2020. Rates then skyrocketed (I’m running out of adjectives here) to 11% in 2021. This year…so far…PG&E raised rates by 18%. The combination of PG&E’s costs to catch up on deferred maintenance, bury transmission lines, pay executive bonuses, install EV infrastructure, lobby our government, continued drought — and account for 7% inflation — make it clear to me that we are in for an extended period of 10% annual electricity rate increases.

Methane prices are almost as bad. Over the past five years the average price of delivered methane has increased at 8% per year. As with electricity, that is before the effects of inflation, higher domestic demand and the U.S. commitment to supply methane to Europe.

Don’t even get me started on gasoline. Just remember that the prices we pay at the pump are almost exclusively influenced by the worldwide commodity prices of oil and gasoline. So when worldwide demand goes up, U.S. drillers and refiners make more money if they export their oil and gas than if they patriotically keep these fuels in the U.S. Refiners raise prices at the pump within days, even though there is a 30 day delay from oil wells to gas pumps. More drilling, or releases from the Strategic Petroleum Reserve, has almost zero impact on U.S. gasoline prices.

Candidly, I see nothing on the horizon that CAN significantly ameliorate these continued increases in electricity and methane prices. In five years the average California homeowner will be paying $0.70/kwh for electricity, or $8,400 per year! Even more for homeowners who use a lot of air conditioning, have swimming pools, or drive an EV. Average homeowners in the U.S. will spend close to $2,000 per year to heat and cook with methane.

Ribbit or Croak. While the market prices for electricity, methane and gasoline are completely out of our control, there are actions we can all take to solve our own personal energy crisis. So please tune into this week's Energy Show for ways that you can avoid the Croak.

Copyright 2022 - The Energy Show, Barry Cinnamon

Your friendly local solar contractor has to contend with two basic types of costs: hardware costs (solar panels, inverters, racking, batteries, etc.) and non-hardware costs, referred to as “soft” costs (just about everything else, including sales, advertising, salaries, rent, insurance, vehicles, inspections and interconnection paperwork).

Solar contractors do not have much control over equipment costs, other than diligent equipment selection and shopping. However, contractors have control over soft costs by carefully managing their sales, installation and back office activities. Not surprisingly, these soft costs are over half the costs of a typical solar or battery installation!

To keep these soft costs down, solar companies are always seeking ways to improve their efficiency. Automating these soft cost activities — marketing, rooftop design, sales proposal, engineering, permitting, inspection, interconnection, incentive, etc. — can reduce these costs by 20% or more. Moreover, projects can get installed faster and with more accuracy.

When I started doing rooftop solar installations over 20 years ago, we developed software to streamline some of these processes. This old software was clunky — using Excel and Word and Adobe — but did indeed reduce costs and improve our sales effectiveness. Now, 20 years later, Aurora Solar has a complete platform to automate these sales, design and installation processes for solar and battery contractors. It’s an incredible product.

Aurora Solar was founded in 2012 by Sam Adeymo and Chris Hopper, both Stanford Business School grads. Sam and Chris embarked on a solar installation project in Africa — and while working on that project half way around the world they realized the scale of the opportunity to reduce solar design costs. They started off with software that would quickly and accurately design panels on a rooftop via aerial photos — completely eliminating the need for the installer to climb on the roof and measure distances with a tape measure. We can all be thankful that they didn’t start on a residential solar project in Palo Alto…otherwise they would probably still be trying to get their building permit finalized.

To learn how Aurora Solar has become the industry’s leader in automating the solar design process used to design over 5 million solar installations, please listen to this week’s Energy Show.

Copyright 2022 - The Energy Show, Barry Cinnamon

I’m sure you’ve noticed that the reliability of our electric grid is getting worse -- not better. In spite of new utility generation, transmission and monitoring technologies, blackouts and Public Safety Power Shutoffs are more common. There are more power outages, and these outages last longer.

In the “old days” about 20 years ago when the power went out we still had wired phone lines, we could throw a few logs in the fireplace, and we could go to the gas station to top off our tank. Now, without reliable electricity, our communications, entertainment, heating and cooling, and transportation are all as useless as a chocolate teapot.

I came across a recent report from E3, an electric grid consulting company, that summarized six trends that they say are making the grid’s reliability worse:

1) More customers and more electric demand

2) Retirement of coal and gas plants

3) Increasing dependency on renewables, storage and distributed resources

4) Increasingly extreme weather

5) Increased risk of drought

6) Tightening electricity markets in the West

In reality, the six trends listed above are excuses for utilities doing a poor job of delivery safe and reliable electricity. We don’t need a consultant to tell us that more electricity demand and more dependence on remote energy supplies — whether natural gas, hydro, wind or solar — will decrease the reliability of the grid. And it doesn’t take a crystal ball to see that every one of these trends were predictable…and will continue.

The fundamental reason for lousy grid reliability is simple: utilities maximize their profits by deferring maintenance and installing their own power plants, transmission lines and local distribution equipment. Their executives don’t get a bonus for reliability, only for profits. Faster, cheaper and more reliable local power systems — rooftop solar, battery storage, vehicle to grid equipment, community solar — are avoided like the plague by utilities.

For a non-utility perspective about the causes of our unreliable electric grid — and what we can do about it — please listen to this week’s Energy Show.

Copyright 2022 - The Energy Show, Barry Cinnamon

Energy costs keep going up — and faster than ever. Gasoline is over $5/gallon, natural gas prices are projected to skyrocket, and PG&E electric rates increased 11% in 2021 and 9% (already) in 2022. Luckily, we have more options than ever for significantly reducing our energy costs.

20 years ago just about all you could do was install a setback thermostat. Now, solar is standard on new homes in California, battery backup systems are popular, LEDs bulbs are all you can buy in most hardware stores, and electric vehicles are ubiquitous.

But when approaching building electrification, how do you figure out what makes the most sense for your home? Should you install a heat pump and induction cooktop first? Should you try some load shifting with incentives from your utility? Should you install solar and storage?

Steve Schmidt with Home Energy Analytics has many of these answers. His company has free software that analyzes your home’s energy use and coordinates with utilities to maximize your savings and grid benefits. A lot has changed since Steve joined us on the Energy Show about three years ago – especially with building electrification.

So please listen up to this week’s Energy Show as Steve shares his insights on home energy usage, as well as the economics and clean energy benefits of electrifying your home.

Copyright 2022 - Barry Cinnamon - The Energy Show

My 2022 solar and storage predictions came into clearer focus — although I didn’t like the picture — after the California Public Utilities Commission (CPUC) dropped a bomb on California’s solar and battery storage industry. Basically, the CPUC sided with PG&E and other utilities in California to eliminate Net Metering.

The proposed terms for Net Metering 3 (NEM 3) cannot be considered net metering since new solar customers will actually be penalized for connecting to the grid under this rate. The utilities’ NEM 3 proposal includes high monthly fixed costs, wholesale daytime reimbursement rates, and a change in grandfathering for existing NEM customers. Under this planned NEM 3 regime, solar customers will be better off economically with a battery and never send excess power to the grid.

The California solar and storage industry mobilized to modify this poorly-reasoned CPUC decision. The NEM 3 decision is now delayed for another few months, most likely being finalized sometime during Summer 2022. There is no doubt in my mind that NEM 3 rates for solar and battery customers will be significantly worse than the current NEM 2. And what happens in California tends to spread; Florida is likely to experience similar net metering battles as their utilities gear up to fight rooftop solar and storage.

With this background about NEM in mind, here are my 2022 Solar and Storage Predictions:

1 California’s investor-owned utilities will have their best year ever in 2022

2 The NEM 3 transition will drive record solar installations in Q1 and Q2

3 Suppliers will not have inventory to meet the Q1 and Q2 rush in California

4 New battery system suppliers will focus more on technology than actual customer needs

5 Branded U.S. solar manufacturing will increase

6 Poor data communications technology will be problematic for battery systems

7 Shortages of battery installers and technicians will slow down deployments of storage systems

8 Only battery system manufacturers with a well-known brand and deep pockets will gain market traction

9 Smart load control systems will become standard equipment for backup power systems

10 PV module power capacities will increase until modules get too big to carry up a ladder.

Please listen to this week’s Energy Show as I walk through the details behind my 2022 Solar and Storage Predictions.

Copyright 2020, The Energy Show - Barry Cinnamon

There are two segments of the renewable energy industry growing like crazy (in addition to solar), electric vehicles and home battery storage systems.People are installing battery storage systems for two reasons. First, batteries avoid sky-high peak electricity prices ($0.50/kwh from 4 to 9pm here in Silicon Valley). Second, batteries provide reliable backup power during increasingly frequent blackouts. The switch to NEM 3 is creating the biggest rush to install battery systems that I have every seen.

Customers with EVs often ask: “When can I use that big lithium-ion battery in my car to power my house?" It’s a natural question to ask since Ford showed that Vehicle to Grid (V2G) capability in one of their Mach-e commercials. Ford is also promoting V2G capability with their upcoming Lightning pickup truck. The perception is that V2G is ready for prime time. As they said on the Six Million Dollar Man: "We have the technology."

But not so fast. There are two big barriers to widespread deployment of V2G. The first barrier is regulatory: restrictive building codes and standards that make it almost impossible to legally deploy V2G systems. The second barrier relates to utility and car company business models. Some car companies don’t want you to use your car battery for home use – including the biggest. And utilities don’t want customers installing or using energy storage systems because these customer-sited systems reduce utility profits.

So I put my thinking cap on to figure out the hardware, software and regulatory changes that would be required to make V2G a reality. Please listen to this week’s Energy Show as I walk through the opportunities and challenges of V2G, and why I think it will take at least another decade before V2G becomes a reality.

copyright 2022 - The Energy Show, Barry Cinnamon

The outlook for solar and storage in 2022 is pretty clear. Because of dramatically higher electric rates and changes to Net Metering in California, I expect the first half of the year to be the best time for homeowners to install solar and storage in over a decade. Second half of the year in California…not so hot. On the other hand, the second half of the year will be great for homeowners throughout the rest of the country since the federal Solar Investment Tax Credit (ITC) is stepping down to 22% at the end of 2022.

There are a lot of moving parts that will affect the industry in 2022. I’ve tried to break down these changing factors into three categories: economics, availability and safety. So here they are:

Economics

PG&E rates are guaranteed to increase. Why? --It’s the utility business model. Full stop.

The California Public Utilities Commission (CPUC) announced a preliminary decision to eliminate Net Metering. They call it a transition from NEM 2 to NEM 3. The reality is that you are better off with no Net Metering at all. This preliminary decision goes into effect at the end of May 2022 unless the CPUC changes their mind.

The Solar Investment Tax Credit (ITC), currently at 26%, goes down to 22% in 2023, then zero in 2024. So all solar installations will effectively be 4% cheaper this year than in 2023, including any roofing or electrical work related to solar.

Solar and battery system prices are going up, not down.

Equipment and Contractor Availability

Battery production is completely sold out until at least the second half of 2022.

There are plenty of solar panels, just that price is slightly higher than in previous years.

Contractors that have battery supplies will be very, very busy — and are likely to be overbooked by the spring of 2022.

Safety

Wildfire risks are increasing in the western U.S., and severe weather is increasing throughout the country

More blackouts will occur as utility equipment fails to keep up with demand and the utility companies turn off power

Homeowners and business will increasingly turn to clean, quiet, reliable batteries to minimize these risks

So if you are thinking about installing or upgrading a solar and battery storage system and you are still on the fence, please tune into this week's Energy Show.