The Energy Show

We celebrated a milestone recently. Over one million homeowners have solar. It took 62 years, from 1954 to 2016, to get to this point. Now there are over 200,000 people working in the solar industry -- more than in the oil and gas extraction industries. Let’s think about that point. There are more people developing, selling and installing solar energy power plants -- that run almost maintenance-free for 25 years -- than there are people who drill for polluting oil and gas.

Two factors helped us get to this level of market penetration. The first factor is that there are hundreds of hard working, committed (some would say crazy) people worked for many years to pass solar friendly laws, and fight hostile fossil fuel companies and utilities. Hats off to SEIA, state chapters like CALSEIA, and other advocacy groups such as Vote Solar and NRDC. The second factor -- arguably even more important in the years ahead -- is economics. Solar is the least expensive source of electricity. Whether you are a homeowner or a utility, it’s cheaper to generate electricity from solar panels than coal, nuclear or even natural gas. Because of these economic factors, the coal industry is declining, nuclear plants are being cancelled, and more utilities are installing large solar installations than new natural gas plants.

Homeowners are taking advantage of the favorable economics of rooftop solar, too. Inexpensive solar panels and more efficient installation methods have brought the price of a home system down from $200k to less than $15k. In many locations around the country, low solar costs and high electricity costs provide homeowners with a 4-8 year payback. In finance terms, that’s a Return on Investment of 12.5 to 25%, after tax. Please Listen Up to the Energy Show on Renewable Energy World as we talk about the choices homeowners can make to maximize their savings with rooftop solar.

If you have a rooftop solar system, you already know that it requires very little maintenance. But “low” maintenance doesn’t mean “no” maintenance. On this week’s show we’ll review the periodic cleanings and inspections your system needs -- as well as some of the more extensive work that may be required every 10-15 years or so.

For many people, their goal is to achieve the maximum net electric bill savings while minimizing ongoing costs. Why spend $300 to wash rooftop solar panels twice a year if, due to regular rain, they get only slightly dirty with only a minimal energy output decline?

Nevertheless, there are a few things that all homeowners should check regularly. First, check your system monitoring regularly -- or just check to see that the green light is illuminated on your inverter (a red light or no light usually indicates a failure). Second, keep an eye on your monthly electric bill -- if you see a big increase in your kwh usage that may indicate a problem with your system. Third, keep trees trimmed that are near your house, both to minimize shading and to prevent squirrels from building a nest under your panels.

For more information about periodic maintenance needs of your rooftop system, Listen Up to this week’s Energy Show on Renewable Energy World.

It’s that time of year again: the weather has warmed up, air conditioning bills are peaking, people are in the midst of their home improvement projects…and it’s prime solar sales season. Homeowners are getting calls, e-mails, radio ads, direct mail and even door-to-door sales pitches.

Most of these pitches are well-intentioned and accurate. Rooftop solar will indeed save you money, while also improving our local and global environment. Solar companies are providing an important service as we transition to this clean energy economy. It’s all a good thing, as long as the solar advice you get is good.

The problem is that solar technology, electric rates and financial savings can be very confusing, and subject to a variety of assumptions. To help sort through some of these facts and fictions, our topic on this week’s Energy Show on Renewable Energy World is: “Straight Answers to your Solar Questions.” Please Listen Up to our perspective on the following solar customer Q&A topics:

• How many solar panels will fit on my roof?

• How can you tell if a solar salesperson is exaggerating?

• Will a big solar company be more likely to be in business in 10 years than a small company?

• What is a realistic energy escalation rate?

• What is better, a microinverter, optimizer or string inverter?

• What solar panels are the best?

• How much money will I save?

• I pay $0.20/kwh for electricity, and a solar company is offering me a PPA for $0.17/kwh. Sounds like a no-brainer?

• I’m confused about these solar financing options. What is best?

• What maintenance is required?

• I have an output guarantee. Are my savings guaranteed?

• Do solar panels increase the value of my house?

• How long will it take to do the installation?

• Do I need to get a building permit or utility interconnection?

• If I move can I take my solar system to my new house?

• If the roof where the panels are located is partially shaded, will they still work?

You can generate your own power on your home or business roof for about $0.07/kwh, with paybacks in the 4-8 year range. Without a doubt, solar is a great way for businesses and homeowners to reduce their electric bills.

So how does your local utility or friendly fossil fuel company react?

• They try to make solar more expensive by adding costs and delays

• They create higher solar rates to penalize solar customers for their good behavior.

• And perhaps most egregiously, they fund lobbying groups to try to trick you.

That’s right, groups like Partnership for Affordable Clean Energy, Consumer Energy Alliance, Yes for 1 on the Sun, and Consumers for Smart Solar are really front groups funded by the fossil fuel industry and utilities. Their sole purpose is to convince voters and policymakers to pass laws favorable to their businesses, and overturn clean energy regulations.

Please Listen Up to this week’s Energy Show on Renewable Energy World as we disclose the real money behind these anti-solar lobbying groups, and expose some of their dirty tactics.

Last month was the 30th anniversary of Chernobyl. The meltdown at this Soviet plant was the worst nuclear disaster in history. It was a Level 7 disaster on the International Nuclear Event Scale. Fukushima was also a Level 7; Three Mile Island (TMI) was only a Level 5. This nuclear disaster permanently poisoned large parts of eastern Europe. There is a similar contamination situation at Fukushima; fortunately, much less so at Three Mile Island.

New nuclear technology and safety procedures will hopefully prevent another disaster (although that’s what we thought after TMI). But what happens at a plant that isn’t crippled by a disaster? Surprisingly, even cleaning up existing nuclear plants is outrageously expensive. Ever wonder why every electric bill has a line item called “Nuclear Decommissioning?” It costs about $750 million to shut down existing plants in a process that can take 20 years or more. Around the world, nuclear plant operators have budgeted over $1 trillion dollars to clean up existing nuclear reactors (think about how many solar panels and batteries we can buy for $1 trillion dollars).

Once they are up and running, the economics of a nuclear plant are pretty good. But they are expensive to build, expensive to decommission, and outrageously expensive to clean up after a disaster. Compare that to a “solar spill” – which is basically a very sunny day. For these economic reasons, from a utility’s perspective the pendulum has swung completely way from nuclear power towards solar. Please join me on this week’s Energy Show on Renewable Energy World as we delve into the long term costs of nuclear energy.

Battery storage has made enormous strides in terms of cost and efficiency. Unfortunately, our society’s needs keep increasing -- both for power (kilowatts for our cars, industries and HVAC) and energy (sustained energy delivery, even at night). Although battery-powered cars have indeed become cost-effective, pop culture’s impractical view of battery storage persists (see the SNL clip about the new Mercedes AA series car).

Batteries are an ideal way to store the sun’s daytime-generated energy for use at night. We have the technology. And the costs for batteries, electronics and the necessary software have come down dramatically. But the policies that would make these systems cost-effective are not yet in place in the U.S. Utilities would rather build more generating and transmission capacity than encourage customers to generate with solar and store energy in their own batteries.

The market for commercial battery storage systems is much bigger than the home market, because commercial customers get an economic benefit by avoiding high kw demand charges. Without home electric rates that are favorable to battery storage, there is almost no reason for homeowners to invest in these systems. Yet. Homeowners who need emergency backup power are almost always better off with a generator. But as battery storage costs continue to decline and storage-friendly utility rates become available, there is no doubt that the market for home and business storage systems will grow quickly. For an update on current battery storage options, please Listen Up to this week’s Energy Show.

Lower costs are creating a boom in the U.S. solar industry. At the end of 2015 there were over 200,000 people employed in the industry, and by May 2016 there were over 1 million homes with solar panels. Solar generates about 1% of the electricity consumed in the U.S. These employment and energy benefits are a result of continued reductions in solar installation costs. But how long can these cost reduction trends continue, and how low can they practically get?

Current residential costs (with the ITC) are about $0.07/kwh, with utility-scale solar even lower at about $0.05/kwh. I’ve watched all-in residential installation costs decline from $10/watt down to the current $3.50/watt, while at the same time system efficiency, reliability and features have improved. Note that these costs vary considerably around the U.S., with lower cost of living states -- such as Texas -- with much lower installed costs compared to higher cost states such as New York and California. Interestingly, the net customer economics don’t change much because these lower cost states also have lower electric rates.

There is no doubt that solar hardware costs will continue to decline: panels, inverters and mounting systems will all get less expensive. I expect all-in hardware costs to bottom out in the range of $0.50-$1.00 per watt; systems with high efficiency panels, monitoring and name brand manufacturers will be at the high end of the range. But soft costs -- such as labor, sales, marketing, engineering, permitting, financing, insurance and G&A costs -- are unlikely to see substantial reductions. Without some kind of streamlined national solar installation policies, these soft costs are likely to stay in the $1.00 to $2.00/watt range.

Where will installed rooftop solar costs bottom out? The best comparison is to HVAC systems, which have similar complexities to solar. As with solar, HVAC system costs vary widely. A rough ballpark is that HVAC hardware will cost about $5,000 -- but total installed costs are almost always more than $10,000. For more about cost trends in the solar industry, Listen Up to this week’s Energy Show on Renewable Energy World.

When I first got into solar, Florida seemed to be a natural market. After all, it’s the Sunshine State. In spite of the sun, there is one big problem that was holding back the market: the state of Florida prohibits residents from purchasing electricity from a source other than a utility. Unlike all other sunny states in the U.S., third party solar companies such as SolarCity, SunRun and Vivint are prohibited from providing solar leases and PPAs to homeowners. This utility-biased state policy has made it difficult for homeowners to finance their rooftop solar systems.

Fortunately, affordable solar loans are now available in Florida. These low interest and easy qualification loans help homeowners get to positive cash flow (electricity savings > financing costs). As a result, the rooftop solar industry in Florida is finally growing, in spite of the utilities’ anti-competitive policies.

My guest this week is Justin Hoysradt, CEO of Vinyasun, one of the leading residential solar installers in Florida. Please join me on this week’s Energy Show as Justin talks about the opportunities for rooftop solar in Florida, as well as some of their unique requirements -- such as mounting systems and panels that can resist hurricane-force winds.

Just as a grimey window does not transmit as much light as one that’s sparkling clean, dirty solar panels will not produce as much energy as panels that are clean. But cleaning solar panels isn’t as easy as washing windows. Nor is it easy to figure out when they need to be cleaned.

Both homeowners and commercial solar installations have to deal with issues related to keeping solar panels clean. For homeowners, the best advice in rainy areas is to have the panels professionally washed every three to five years; more often for larger systems, and in areas that are very dry and dusty. Commercial customers consider the cost-benefit tradeoffs more carefully. It may cost $5,000 per year to clean a large system, but that 5% increase in energy output may be worth $10,000 -- hence regular cleaning pencils out.

With over 25 Gigawatts of installed solar capacity in the U.S., there is a need for professional solar panel cleaning services. But not a lot of Windex; for safety and environmental reasons, panels are usually cleaned with deionized water. And NEVER just hose off your panels; minerals in the water will create a white film on the glass. If you can work safety on a ladder and on your roof, you can wash the panels yourself with a gentle soap solution.

Please Listen Up to this week’s Energy Show on Renewable Energy World as we welcome Jay Welsh, CEO of Solar Maids, the leading professional panel cleaning service. Jay shares his tips on cleaning residential systems, as well as the wider range of operations and maintenance services that Solar Maids provides.

The economics for rooftop solar are terrific -- typical paybacks in the 4-10 year range. From a Return on Investment (ROI) standpoint, there are almost no other investments that come close. Think about it: 1.5% before tax in the bank (steady but low), 6% before tax in the stock market (very variable) or 14% after tax with rooftop solar (as long as the sun shines and assuming a 7 year payback period).

But….at the average price of $3.50/watt, a 5,000 watt system will cost $12,250 after the 30% tax credit. Many people with high electric bills don’t have that much cash available to purchase a system. Until about five years ago the only option for financing a rooftop solar system was a long-term lease or Power Purchase Agreement (PPA). Luckily, over the past five years a number of finance companies have started to offer loans specifically for residential solar customers.

My guest on this week’s show is Sara Ross, Founder and CEO of Sungage Financial. She tells a compelling story as to why loans are the best way to finance your rooftop solar system. Please Listen Up to this week’s Energy Show on Renewable Energy World to learn more about options to finance your rooftop solar system.