The Energy Show

Our society’s fuel transition from wood to coal to oil to gas has been steady and obvious. Now we are benefitting from the transition from fossil fuels to renewable energy. But we are also experiencing a change from technologies that are based on moving atoms (combustion, pipelines, engines with moving parts) to technologies that are based on moving electrons (photovoltaics, battery storage and electric motors).

These relatively new electron based technologies allow us to generate, transmit and store energy without any moving parts. Nothing to wear out, re-fuel or maintain. The result is an energy economy that is cleaner and less expensive -- as well as more efficient. Case in point: the differences between a gasoline car and an EV.

Please Listen Up to this week’s Energy Show on Renewable Energy World as we talk about the technology transition towards electron (and photon) based machines and appliances. Think about it: not a single atom needs to be moved when you listen to this week’s show -- from the time you click “play,” until the sound emanates from the speakers in your headphones.

The “solar coaster” is not the newest daytime ride at six flags, but a term for the cyclical ups and downs of the solar industry. Like many other industries, market forces cause the costs for solar equipment and installations to vary. But unlike other industries, incentives and regulations that apply to clean energy create an additional layer of uncertainty and variability. Over the past 16 years I’ve witnessed three big up and down cycles in the solar industry. The only prediction I can make about the next one is that it is inevitable.

The good news is that the long term trend for solar in the U.S. -- and worldwide -- is very favorable. The bad news is that during these downswings company profitability suffers, jobs are lost and some technologies are orphaned. Although painful, these changes are typical in every fast-growing industry.

Please Listen Up to this week’s Energy Show on Renewable Energy World as we welcome back Paula Mints, one of the solar industry's’ best known market researches. We will be talking about what it takes to make the solar industry profitable, and how companies can build their businesses around profitable, albeit slower, growth.

- $31.03 per barrel - current spot crude oil price

- $59.95 per barrel - price of an empty steel oil barrel on Amazon

- $82.50 per barrel - price for 55 gallons of regular unleaded gas

- $550 per barrel (11 five gallon bottles) - price of water delivered to your home or office

The current price of oil is less than the barrel it’s shipped in...less than gasoline...and less than a plain old water delivery service. So how long will these low oil prices last? And what is the impact of low oil prices on renewable energy?

Cheap gas is spurs Detroit big iron, and helps families make ends meet by reducing their monthly fuel bills. But ironically, cheap oil has a dark side. Countries whose primary export is oil are facing drastic changes in their economy; banks that have invested in oil companies are losing money; and even the clean energy industry is impacted.

Gerald Appelstein -- a former VP at Tauber Oil and ExxonMobil -- has been through these crude oil ups and downs. He’s also familiar with energy geopolitics that often weigh more heavily than traditional economic supply and demand theory. Please Listen Up on this week’s Energy Show on Renewable Energy World as Gerry discusses the various factors contributing to low oil prices, as well as what consumers can expect for oil and gas prices in the future.

Fireplaces and chimneys have been part of every home and shelter ever since primitive man poked holes in the tops of their caves to let the smoke out,… until about a hundred years ago when central heating became widely available. Conveniences of modern life such as gas lights, closelines, ice boxes, Victrolas and Super 8 movies have all been replaced with successive generations of new, better and cheaper technology.

We live in a society that is more energy intensive than ever before. This trend is likely to accelerate, and apply to every “system” in our living spaces. Split system heat pumps will replace polluting natural gas furnaces, LEDs will replace incandescents, grey water recovery and water storage systems will cut back our water usage, batteries will store rooftop solar energy and provide grid support services, and the IOT (Internet of Things) will become a convenient (hopefully also simple and secure) way for us to control all of these systems.

I don’t expect us to use less energy, just less polluting sources of energy. In other words, our per capita energy usage in all forms will go up. On a unit basis we’ll use more kwh of electricity, but fewer gallons of gasoline and therms of natural gas. Please Listen Up on this week’s Energy Show on Renewable Energy world as we talk about how these new technologies are being deployed as standard features in new buildings as our society’s energy intensity increases and pollution declines.

Commercial solar has lagged behind utility scale and residential solar for two reasons. The first is that paybacks for commercial solar have historically been longer than CFO’s would like -- anything over 3-4 years is a “big” decision and usually gets pushed aside. The second reason is that the financing structures for commercial solar were complicated; although leases and PPAs are effective in reducing operating costs, they are not necessarily good long term investments.

New financing options for commercial solar are changing this picture. Banks are getting more involved in providing unsecured loans for solar installations, and secured solar loans are becoming available that offer relatively low interest rates. Property Assessed Clean Energy, or PACE loans are perhaps the most significant innovation.

PACE loans are secured by the property itself, and are paid back as part of annual tax assessments. If the property is sold the loan on the solar improvement automatically goes to the new owner. The loan debt typically does not show up on a company’s balance sheet. And if the property is leased to a tenant with a triple net lease in which the tenant pays an allocated part of the property taxes, then a portion of the solar repayment loan can be automatically passed on to the tenant (who in exchange gets the benefit of free solar electricity).

If you own or have a long term lease on a commercial property in a solar friendly state, please Listen Up to this week’s Energy Show on Renewable Energy World for the latest on financing options for your commercial solar installation.

Ahhh….it’s almost springtime. The weather is getting warmer, the trees are starting to bud, and people are starting to think about their next home improvement project. And along with the warming weather, the solar salespeople are starting to swarm on unsuspecting homeowners like locusts from the plagues of Egypt.

You may be interested in rooftop solar. But solar products, systems and terminology are confusing. As you do your research you’ll be inundated with TLAs (three letter acronyms)...and the more installers you talk to, the more you’ll get confused. On this week’s Energy Show we’ll review a Four Step Process that you can use to compare different home solar proposals.

Step One: Compare Installers. Consider local installers, check references from friends and neighbors, and read online reviews. You will almost always get better service and faster installation turn around with a local company. When hiring someone to work on my house, for accountability purposes I always prefer contractors that have their own trained crews (not subcontractors or temporary works).

Step Two: Determine the Cash Price of the Installed System on a Per Watt Basis. Just as buying a car, you always want to shop for the best cash price -- keeping financing out of the picture. Get a quote for the total installed system (no deductions yet for incentives or tax credits). Then determine the total number of DC watts of the system (number of panels times watts per panel). Divide the watts into the dollars to get a $/watt price for your system. Pricing can range from the low $3/watt to over $5/watt. For example, a system priced at $20,000 for 20 panels, each with a rating of 270 watts, will cost $3.70/watt. Don’t get distracted with varying claims about equipment reliability, inverter efficiency or panel degradation -- they are all about the same. Regardless of manufacturer or installer, every system will put out about the same amount of energy (and annual dollar savings) if it has the same DC watt system size.

Step Three: Compare Equipment and Services. Solar panels are commodities, but you will pay more for higher efficiency and more well known brand names. All panels have 25 year warranties, and will operate maintenance-free (except for an occasional cleaning if they get very dirty). The only time you need higher efficiency is when you have limited roof space. Nevertheless, you may prefer solar panels that look all black and are mounted flush to the roof, or micro-inverters and optimizers that have built-in safety features, or a system that has monitoring that you can view on your cell phone.

Step Four: Compare Financing. There are so many assumptions involved in financing, system output, energy rates and output “guarantees” that it is almost impossible to compare the total savings numbers. That is why it is easiest to compare cash prices or, if you are considering a lone, comparing interest rates. Watch out for escalation rates applied to energy prices (escalation rates will inflate your savings) and monthly payments (escalation rates will increase your repayment costs).

Rooftop solar has never been more cost effective and reliable as it is now. Favorable tax policies, local incentives and net metering combine to make solar a great long term investment. So if you’re considering rooftop solar, Listen Up to this week’s Energy Show on Renewable Energy World.

E-6 TOU (Time of Use) Rates Closed to Customers in March, and E-7 Eliminated

When the new TOU rates become available this spring, PG&E will end its solar friendly E-6 and E-7 rates. The new TOU rates will not be as favorable to solar customers since the peak rate periods are shifted later in the day when there is less generation from solar (see details below).

For most customers we recommend that you immediately change to the E-6 rate so that you can preserve this good rate option for the future.

If you are on the current E-6 TOU rate you don’t need to do anything. This E-6 rate is currently slated to stay in place until 2020 or later.

If you are on the old E-7 rate we recommend that you immediately change to the E-6 rate. Otherwise, PG&E will automatically switch you to the new TOU rate, which will not save you as much money as the E-6 rate.

If you are on an EV rate and charge your vehicle at night, stay on the EV rate.

If you are on the current E-1 rate and do not use a lot of electricity during weekday afternoons, we recommend that you change to the E-6 rate. Since the E-1 rate has no time of use component, it is generally good for customers who cannot run their meters backwards during the day (typically smaller solar systems and higher daytime AC electric loads). All current solar customers are on the Net Metering 1.0 program (and grandfathered for 20 years), so you can go back to the E-1 rate if the E-6 rate is not beneficial for you.

Clear as mud, right? Unfortunately, these rate changes are complicated. Nevertheless, we want you to achieve the maximum benefits from your rooftop solar system. For more information, please call PG&E at (800) 743-5000 to discuss your rate options and decide whether moving to E-6 is the best option for you.

E-7 Rates

PEAK: noon to 6pm Monday through Friday, All Year, $0.16-$0.54/kwh

OFF-PEAK: all other hours, $0.13-$0.30/kwh

E-6 Rates

Summer (May 1 through October 31)

PEAK: 1pm to 7pm Monday through Friday, $0.34-$0.51/kwh

PARTIAL-PEAK: 10am to 1pm and 7pm to 9pm Monday through Friday, plus 5pm to 8pm Saturday and Sunday, $0.23-0.39/kwh

OFF-PEAK: All other times, including Holidays, $0.15-$0.32/kwh

Winter (November 1 through April 30)

PARTIAL-PEAK: 5pm to 8pm Monday through Friday, $0.17-$0.34/kwh

OFF-PEAK: All other times, including Holidays, $0.15-$0.32/kwh

EV Rates

PEAK: 2PM-9PM Monday-Friday, 3PM-7 PM Sat, Sun, Holidays, $0.44/kwh Summer, $0.31/kwh Winter

PARTIAL PEAK: 7AM-2PM Monday-Friday, 9PM-11PM M-F, $0.24/kwh Summer, $0.18/kwh Winter

OFF PEAK: All other hours. $0.11/kwh

FUTURE E-TOU Rates

PEAK: 3pm to 8pm Monday through Friday, rates TBD

OFF-PEAK: All other times, including Holidays, rates TBD

After gazing into my crystal ball, I see a good year for rooftop solar in 2016. In fact, towards the end of 2016, my crystal ball got even clearer as the ITC was extended through 2021, and California’s Public Utility Commission decided to extend retail net metering -- instead of kill it as was done in Hawaii and Nevada. So here are my Ten Predictions for Rooftop Solar in 2016:

1. The rooftop solar industry will focus on steadier, more sustainable growth.

2. Manufacturers and installers were ramping up capacity to meet expected U.S. demand in the last year of the ITC – but with the ITC cliff gone, there will be excess capacity in 2016, leading to continued price reductions.

3. Local and regional installers will continue to gain market share.

4. Adam Smith’s invisible hand will wave away the impact of the module tariff dispute.

5. Soft costs will continue to go up as a percentage of the total installed cost to homeowners.

6. Even with slightly higher interest rates, homeowners will have more choices for system financing

7. Investments in all segments of the U.S. solar industry will increase.

8. Rooftop solar companies will clean up their act when it comes to fair marketing practices towards consumers.

9. 2016 will not be the year of residential battery storage – although we are gradually getting closer to when battery storage becomes a mainstream product.

10. Product differentiation will become more important than ever as pricing for commoditized products is forced down.

For details on how these predictions may impact your segment of the solar business, please Listen Up to the Energy Show on Renewable Energy World.

After driving a diesel truck for the last month and a half it is my opinion that the diesels are dead. Mercedes’ BlueTec system is expensive and incredibly inconvenient. And VW’s TDI system basically doesn’t work without fraudulent software. The reality is that gas vehicles are cleaner and cheaper, and electric vehicles (at least for cars) are the future.

Diesel engines have some big benefits: they are more efficient, more durable, and get better miles per gallon. But diesel fuel is more expensive, and the engines emit soot (black smoke), which is a restricted pollutant. To clean up the soot, the BlueTec system requires you to add a few gallons of DEF every three or four tanks. DEF is Diesel Exhaust Fluid, and is almost impossible to find at night on the interstate in the rain.

Until VW’s house of cards collapsed, diesels seemed competitive with gas engines. Although there are definitely benefits to diesels, there is no doubt in my mind that gas engines and EVs will prevail for cars. The inconvenience and expense of diesels may be OK for trucks -- at least until batteries get cheaper. For more about the efficiency and costs of diesel and gas engines -- and how they compare to future EVs, please Listen Up to the Energy Show on Renewable Energy World.

After driving a diesel truck for the last month and a half it is my opinion that the diesels are dead. Mercedes’ BlueTec system is expensive and incredibly inconvenient. And VW’s TDI system basically doesn’t work without fraudulent software. The reality is that gas vehicles are cleaner and cheaper, and electric vehicles (at least for cars) are the future.

Diesel engines have some big benefits: they are more efficient, more durable, and get better miles per gallon. But diesel fuel is more expensive, and the engines emit soot (black smoke), which is a restricted pollutant. To clean up the soot, the BlueTec system requires you to add a few gallons of DEF every three or four tanks. DEF is Diesel Exhaust Fluid, and is almost impossible to find at night on the interstate in the rain.

Until VW’s house of cards collapsed, diesels seemed competitive with gas engines. Although there are definitely benefits to diesels, there is no doubt in my mind that gas engines and EVs will prevail for cars. The inconvenience and expense of diesels may be OK for trucks -- at least until batteries get cheaper. For more about the efficiency and costs of diesel and gas engines -- and how they compare to future EVs, please Listen Up to the Energy Show on Renewable Energy World.