The Energy Show

It's getting to be that time of the year again -- tax time, that is. As all new rooftop solar homeowners should know who purchased a system in 2014, they are eligible for a Federal Investment Tax Credit of 30% of the cost of their system. This tax credit is good for both solar PV and solar thermal (hot water) systems. The solar ITC applies to the owner of the system, which is the homeowner for purchased systems or the leasing/PPA company for systems that are owned by third parties.

The solar ITC is arguably the most important incentive to solar customers, but it goes to zero on January 1, 2017. Claiming the credit on your tax return is surprisingly easy. All you need is the complete set of invoices from your installer that summarizes your qualified costs for your system -- then you can reduce your 2014 tax bill by 30% of those total costs. For example, if your purchase price for the system installed in 2014 was $20,000, you get to reduce your 2014 tax bill by $6,000.

So Listen Up to this week's Energy Show on Renewable Energy World as we go over the rules that apply to this tax credit, and fill out IRS Form #5695. And finally, although solar guys like me understand the basics of the 30% Solar ITC, please remember to get advice from your tax professional before filing.

The worldwide demand for energy is almost inexhaustible. Couple that demand with the need for clean energy -- and energy we can afford -- and the picture gets a lot more complicated. Fortunately, good market research helps us to get some perspective of the potential for PV to meet these energy demands.

There are two types of market research available in the solar industry: primary research and secondary research. Secondary market research related to the solar industry is relatively easy to find on the internet. This information is based on studies that were conducted by industry groups, government agencies, or extracted from other publicly available sources. This secondary information is often generalized and not targeted towards addressing a specific business need. On the other hand, primary market research studies are more specific, particularly useful in the solar industry to answer a specific question.

For example, one can find secondary research on the percentage of homeowners who lease a rooftop system as opposed to buy a system. But it takes a more specific series of questions -- often as part of a survey or focus group -- to determine how satisfied homeowners are with their lease or purchase of a solar system.

Paula Mints has specialized in primary research in the solar industry since 1997 -- most recently as the Chief Market Research Analyst with SPV Market Research. Please join me on this week's Energy Show on Renewable Energy World as Paula talks about her experiences in the "solar coaster," and talks about some primary market research insights that come directly from manufacturers, developers, installers and customers.

With energy prices changing so quickly -- and new technologies ramping up into the marketplace -- the "conventional wisdom" about energy is often wrong. I've been as guilty as other people when it comes to trusting emotions and public opinion about energy, as opposed to real math and science.

See if you can guess the answer to these ten simple questions:

Are electric cars cheaper than gas cars?

Is rooftop solar expensive?

Will you save money if you buy new energy saving appliances?

Will gas prices stay low?

Is solar for no money down a good investment?

Are LED bulbs expensive?

Do electric utilities like customer energy efficiency?

Is clean coal cost effective?

Is nuclear power the best baseload power source?

Has energy efficiency reduced our per capita energy usage?

If you answered "yes" to ANY of these questions, I suggest you listen up to this week's Energy Show. The conventional wisdom is wrong -- and all of these energy saving ideas are myths.

When someone gets a new rooftop solar installation, the second question they always ask is "how often do I need to clean my solar panels." We'll answer that question on today's show -- taking into account the different effects of rain, dust and electric rates (BTW, the first question people always ask is "how do I read my electric bill;" but that's a topic for another show).

Rooftop solar panels get dirty primarily from wind-blown dust and pollen. Birds are usually not a problem unless your last name is Hitchcock and you live in Bodega Bay. As panels get dirtier, their output declines. A small amount of soiling -- say a light dusty film -- may only cause a 5% output decline. However, when panels get very dirty -- perhaps in an agricultural area or location that does not get regular rainfall -- the output decline can be greater than 20%. A good heavy rainstorm will usually wash away most of the accumulated soiling.

I use the term "usually" because on panels that are tilted at about 5 degrees or less, the rain may leave a puddle of muddy debris along the lower edge of the panel. When this puddle dries, sometimes a thick layer of dirt accumulates along the lower row of cells (sometimes moss and weeds may even grow in these areas). Depending on the design of the system, this small accumulation of dirt can cause a very significant decrease in output.

So the answer to the question: "how often should I clean my solar panels" really depends on five factors: your location (does it rain regularly or only during certain months), the tilt angle of your panels (steeply tilted panels tend to stay much cleaner than panels that are close to horizontal), the amount of wind blown dust, your electric rate (if your electric rate is high then it is more worthwhile to clean your panels), and the cost to clean your panels. Please listen to this week's Energy Show on Renewable Energy World to get a better understand of how often -- if ever -- you need to clean your rooftop solar panels.

Outdoor pools are great on hot summer days - the kids are occupied and the water is refreshing. And as the summer progresses, the water heats up to a comfortable level. But on chilly spring and fall days the cool water in that pool amounts to nothing more than a 30,000 gallon decoration in your back yard. Plus you still may need to run the electric pool pumps to keep the water clean.

Because the water is cold in the spring and early summer, your options are to swim (or not to swim) in cold water, burn $50 in extra natural gas to heat your pool, or install a solar pool heating system. It's no surprise that my preferred solution is to install solar pool heat collectors. These pool heat collectors are easily connected into your pool's existing circulating pump system, and can easily maintain your pool at a comfortable 80 degrees F for most of the year.

My guest this week is Freeman Ford, one of the founders of FAFCO. FAFCO is the oldest and largest manufacturer of pool heating systems in the U.S. They are based in Chico, California, and have been manufacturing their special black polymer pool solar panels for over 40 years. In addition to their pool solar panels, FAFCO also has a line of solar DHW panels as well as a new hybrid solar thermal-PV panel. Please join me on this week's Energy Show as Freeman talks about our country's lack of commitment to clean, renewable energy -- and the solar industry's perseverance in the face of political paralysis when it comes to a transition to a clean energy economy.

Many of the most significant industrial and technological innovations in the U.S. were discovered, commercialized and expanded with government support. Turn the clock a century or two and you can see how the government was behind oil drilling and refining, transcontinental railroads and our electric grid. More recently the government's been successful with the space program, the internet and the biotech revolution. And these government efforts continue with solar. To quote the DOE: "In 2011, the U.S. Department of Energy's (DOE) Solar Energy Technologies Office (SETO) was tasked with achieving the goals of the SunShot Initiative: to drive down the cost of solar electricity to be fully cost-competitive with traditional energy sources by the end of the decade." [no one else uses verbs like "tasked']

Suffice it to say that over the past few years SunShot has already been the motivating factor behind dozens of solar innovations, including new financing concepts (Connecticut Clean Energy Finance and Investment Authority's "Green Bank,"), new flat roof and sloped roof PV mounting systems, clever CSP technologies, SolarTech's work to reduce permitting costs, and the Rooftop Solar Challenge. There is considerable momentum behind the dozens of projects that are in the midst of their funding stages, may of which are focused on making solar more affordable by reducing soft costs.

SunShot staffers get into the field to understand real world problems and potential solutions. Sometimes that "field" is a steeply sloped roof -- which is where I started this week's interview with Minh Le, the Director of SunShot. After we moved to a more stable platform on the ground we had a good opportunity to talk about the overall SunShot program and how they reach out to solar industry participants. Please join me on this week's Energy Show on Renewable Energy World as Minh Le talks about SunShot's progress in reducing solar hard costs (equipment) and soft costs, as well as their efforts to help new companies and technologies get into the hands of customers where they can do the most good.

Over 95% of climate scientists have concluded that CO2 is the primary cause of global warming. Solving the problem requires a dramatic reduction in CO2 emissions. Some people are altruistic, but almost all businesses are bottom line oriented and will not reduce their CO2 emissions unless they have an economic incentive to do so. There are two realistic incentives: taxing CO2 emissions or setting up a cap and trade program for CO2. Since increasing taxes is politically unfeasible, the most practical approach is with a cap and trade program.

The U.S. Environmental Protection Agency implemented a cap and trade program for sulfur dioxide (the primary contributor to acid rain) in 1995. This program was a great success, and essentially eliminated the acid rain program. California passed AB32 in 2006 to accomplish the same goals for CO2 emissions. This law sets a cap on emissions from almost all sources, and gives polluting companies a certain number of allowances. If companies reduce their CO2 emissions (with renewable power generation, more efficient processes or smokestack scrubbers), they can trade these emissions to companies that still pollute.

Many California companies succeeded in reducing their emissions. In fact, utilities installed so much wind and solar (courtesy of their RPS requirements) that they now have excess allowances to trade. But the gas refining industry didn't act, and starting on January 1, 2015 they will have to purchase extra allowances. How much? When a gallon of gas is burned it emits about 20 pounds of CO2, which is 0.009 tons. At the current market price of CO2 allowances of $12/ton, that extra CO2 amounts to about 11 cents. So the downside of cap and trade is that the price of gas in California is likely to go up by about a dime. The upside is that we get cleaner air and an even stronger green economy.

But not everyone wants this outcome. In particular, the oil and gas refining industry tried to suspend AB32 in 2010 when they sponsored Proposition 23 (which was defeated by 62% of voters). This year they are sponsoring AB69, which will delay the application of cap and trade to transportation fuels. It's shaping up as a battle between deep-pocketed dirty fuel polluters -- and just about everybody else in California. I'm hopeful that California's cap and trade program continues to succeed, and maybe someday soon will be adopted by the other 49 states. Please join me on this week's Energy Show on Renewable Energy World as we talk about the real economic impact of cap and trade.

Solar modules started out as fairly simple moisture-proof sandwiches of glass, silicon cells, glue and backsheets -- with a junction box that contains a few diodes to bypass defective or shaded cells. No fancy electronics in the early days. Then power electronics circuitry crept into early inverters -- to the point now where all inverters contain hundreds of electronics chips to provide various optimization, communications and safety functions. Now that many installations use microinverters or optimizers, every single solar panel has its own collection of electronics chips.

Power electronics for solar modules are generally designed with 50-200 general purpose integrated circuits and related components. Like almost all other electronic products, microinverters and optimizers were all initially designed with discrete components -- but then, as sales volumes increase manufacturers started to include more specialized components. Think about the first PCs and all the components that were soldered onto internal circuit boards. Now most of the functionality of PCs (and cellphones and TVs and other mass produced electronics) are provided by a few customized chips made in very high volumes. The same miniaturization and cost reduction trend, from hundreds of discrete general purpose components to dozens of specialized power electronics chips, will occur with power electronics for solar applications.

As Intel, AMD, Broadcom, Nvidia and others have shown, providing specialized chipsets to electronics manufacturers is a good way to reduce costs and improve performance. It's a geeky business, but one that has made our laptops and cellphones so ubiquitous. Solantro Semiconductor has staked its future on providing chipsets for solar power systems, as well as related energy storage and communications functions. Because they are optimized for miniaturized power electronics applications, Solantro's solar chipsets will be cheaper, more efficient and more reliable than ordinary power electronics composed of hundreds of chips. My guest this week is Antoine Paquin, CEO of Solantro Semiconductor. Please join me on this week's Energy Show on Renewable Energy World as Antoine explains how specialized chipsets for solar power applications will help make solar systems cheaper, smaller and more efficient.

Architects are in the driver's seat when it comes to building new homes or overseeing major remodeling projects. Although they are familiar with rooftop solar, their designs generally do not include solar panels. Whether it's because of cost, technology or aesthetics, it's a big opportunity that is lost to almost all new homeowners.

Fortunately, this reluctance to include solar panels as a standard feature is beginning to change. Some national homebuilders offer solar as a standard option, and the overall economics of rooftop solar continues to improve. A recent study has found that the single most important factor driving whether a given homeowner installs solar is peer influence -- essentially, whether their neighbors have solar, also. So new home buyers, custom home builders and home remodeling companies are more likely to ask their architects for rooftop solar.

My guest this week is Marvin Bamburg, the principle at MBA Architects, a San Jose-based residential and commercial architecture firm. His firm has been incorporating rooftop solar in his designs for over a dozen years. Please join me on this week's Energy Show on Renewable Energy World as Marvin provides an architect's perspective on incorporating rooftop solar in the design, sale and construction process for residential homes.

Solar PV customers understand that they can generate cheap electricity with rooftop solar. That electricity is good for lighting, appliances, air conditioning and other household uses. But homeowners often ask about heating their homes with solar. The answer used to be installing a solar thermal system with rooftop solar panels generating hot water (stored in a tank) or hot air (stored in a bed of rocks or other thermal mass). But now there is another option: heat pumps combined with rooftop PV.

Two trends are making this type of system cost effective. First, rooftop PV systems now generate electricity inexpensively, often much less than what you would pay from your local utility. Second, there is a new generation of smaller, modular heat pumps called "mini-split systems" that allow you to heat and cool a few rooms at a time, instead of your entire house. The combination of cheap PV electricity and a zoned approach to heating and cooling are often less expensive than natural gas heat and central air conditioning.

Heat pumps draw on existing heat reservoirs, usually ambient outdoor air, underground water sources or pipes buried outdoors. When these heat reservoirs are in the range of 45 to 55 degrees F, heat pumps can be quite efficient. So they work best in temperate climates -- not in cold areas of the U.S. Nevertheless, even in cold climates a ground or water source heat pump with PV can be more efficient than gas or oil heat (and certainly cleaner). As PV costs continue to decline and split systems proliferate we can expect to see more and more homes relying solely on rooftop PV for their energy use. Please join me on this week's Energy Show on Renewable Energy World as we talk about the perfect match between heat pumps and rooftop PV.