Solar Electrical Systems

As with many recent weeks, news from the solar industry and market shows that solar is blooming despite facing pricing uncertainty and other challenges. While some places are enacting new programs to incentivize solar, some companies and projects are being threatened by a variety of factors, from a slow-moving turtle to falling module prices.

One of the places where falling prices most affected the solar market is Pennsylvania where the state’s solar renewable energy credit (SREC) market slumped because people adopted solar more quickly than expected. The SREC market was limited by how much solar power utilities were required to buy and when there was enough solar, the price of SRECs dropped. Now, the International Brotherhood of Electrical Workers (IBEW) Local 98 and others are supporting HB 1580, which would increase the amount of SRECs that utilities must buy, thereby, increasing the price of the credits, making solar more valuable.

Meanwhile Los Angeles is pushing forward with a solar feed-in tariff (FiT). The city’s CLEAN LA Solar program would create a 150 megawatt feed-in tariff for the city, making it the largest U.S. city to adopt a FiT. FiTs have been essential to the adoption of solar in Germany and elsewhere, although the rapid decline in PV pricing has led to quicker than expected adoption, which has forced governments to lower, and in some cases cease offering the FiT entirely.

Another model to help bring solar to more people is group purchasing agreements. Eugene, Ore., is the latest town to use group purchasing (i.e., bulk buying) to make solar cheaper for its residents. The new Solarize Eugene effort was launched by the nonprofit Resource Innovation Group. Under the model, a preferred contractor is selected to educate the public about solar opportunities and those who want to go solar through the company will be able to get discounted modules based on how many people go solar through the program.

What’s proving to be the most popular options for homeowners to go solar are the third-party PV ownership models. Under such models homeowners don’t pay the cost of owning a PV array up front, they pay it over time, either as a direct lease payment or based on how much power the array produces. And a recent PV Solar Report study of the California market done with SunRun showed that 73.4 percent California homeowners going solar are choosing such options.

There’s no shortage on falling prices for solar, largely because production of silicon-based PV is nearly exceeding demand. But silicon-PV might start to lose market share, according to a new Lux Research report. The report found that silicon carbide and gallium nitride-based PV could comprise up to 22 percent of the PV market by 2020. The materials could be cheaper and more efficient than the current silicon-PV available today. Another novel PV material that’s gaining traction is organic PV. Cambridge’s Cavendish Laboratory recently produced organic PV cells with efficiency levels at 44 percent.

Organic PV offers a cleaner form of solar, but already companies are working to make their PV products as environmentally sustainable as possible. As such, the Solar Energy Industries Association (SEIA) and solar companies are developing the voluntary Solar Industry Commitment to Environmental & Social Responsibility. Under the commitment, participants will make sure they are operating ethically and cleanly. Such efforts will include end-of-life recycling programs and proper handling of hazardous materials.

The desert tortoise again is the centerpiece of environmental debate in California. The imperiled reptile has led Natural Resources Defense Council, Sierra Club and Defenders of Wildlife to sue the Department of the Interior (DOI) over its approval of the 663.5-megawatt Calico Solar Project of Bureau of Land Management-managed land near Barstow, Calif. The organizations contend that the project is on land with too many threatened species, chief among them the desert tortoise.

 Source:  CleanEnergyAuthority.com

With the news that the LA City Council has granted LADWP the power to enter into feed-in-tariff agreements, here is some news on how FIT’s are working in Europe and other parts of the U.S.

Solar cells adorn the roofs of many homes and warehouses across Germany, while the bright white blades of wind turbines are a frequent sight against the sky in Spain.
If one day these machines become as common on the plains and rooftops of the United States as they are abroad, it may be because the financing technique that gave Europe an early lead in renewable energy is starting to cross the Atlantic.

Put simply, the idea is to pay homeowners and businesses top dollar for producing green energy. In Germany, for example, a homeowner with a rooftop solar system may be paid four times more to produce electricity than the rate paid to a coal-fired power plant.

This month Gainesville, Fla., became the first city in the United States to introduce higher payments for solar power, which is otherwise too expensive for many families or businesses to install. City leaders, who control their electric utility, unanimously approved the policy after studying Germany’s solar-power expansion.

Hawaii, where sky-high prices for electricity have stirred interest in alternative forms of power like solar, hopes to have a similar policy in place before the end of the year. The mayor of Los Angeles wants to introduce higher payouts for solar power. California is considering a stronger policy as well, and bills have also been introduced in other states, including Washington and Oregon.
“I’m seeing it with my own eyes — it’s really having a good effect on our local economy, particularly in these hard times,” said Edward J. Regan, the assistant general manager for strategic planning at Gainesville Regional Utilities in Florida. He said he had gotten calls from other cities and states since announcing the policy.

The new payment method is referred to as a “feed-in tariff” in Europe. It is, in essence, a mandate by the government telling a utility to pay above-market rates for green electricity.

It shifts the burden of subsidizing green energy from taxpayers, as is common in the United States, to electricity ratepayers. And the technique includes assurances that a utility will pay the high rates for a long period, often 15 to 25 years.

The surge of interest in the payment system is a recognition that despite generous state and federal incentives, the United States still lags far behind Europe in solar power. Germany, where feed-in tariffs have been in place since 1991, has about five times as many photovoltaic panels installed as the United States, though they still account for only 0.5 percent of electricity in that country.
In the United States, said Wilson Rickerson, a Boston energy consultant, “a lot of people simultaneously reached the conclusion — who’s moving fastest internationally? And that’s definitely been Germany and Spain.”

In Gainesville, the new policy has already sparked a rush to put up panels. John Stanton, a retired civil servant living there with his wife, put 24 solar panels on his roof in late January, as city leaders sped the policy toward approval. Gainesville’s municipal utility will pay Mr. Stanton and other homeowners and businesses who generate solar power more than twice the standard electricity rate, guaranteeing that rate for 20 years.
Wind power and other sources of renewable energy are generally included in the European payment systems, but solar — as one of the costliest renewables — has benefited the most. Payment rates in Europe for wind are substantially lower than for solar, according to Christian Kjaer, chief executive of the European Wind Energy Association.

If a utility commits to paying a higher rate for renewable power over a period of years, it can offer those with solar panels or wind turbines a steady return that helps defray the initial cost of the equipment. “If you put your money in, you know you’re going to get it back,” Mr. Rickerson said, referring to Germany.

But requiring utilities to pay extra for green power has a direct impact on ratepayers. Homeowners’ electricity bills will rise 74 cents a month in Gainesville, or about half a percentage point of the average homeowner’s monthly bill.

“It was the thing that sort of put us over the top,” said Mr. Stanton, who gained an appreciation of European energy policies after living in Italy for more than a decade.

Mr. Regan said that homeowners with panels received a payment under the new policy that works out to more than a 25 percent premium over the city’s other incentives, which include rebates and a more modest rate payment.
Wind power and other sources of renewable energy are generally included in the European payment systems, but solar — as one of the costliest renewables — has benefited the most. Payment rates in Europe for wind are substantially lower than for solar, according to Christian Kjaer, chief executive of the European Wind Energy Association.

If a utility commits to paying a higher rate for renewable power over a period of years, it can offer those with solar panels or wind turbines a steady return that helps defray the initial cost of the equipment. “If you put your money in, you know you’re going to get it back,” Mr. Rickerson said, referring to Germany.
But requiring utilities to pay extra for green power has a direct impact on ratepayers. Homeowners’ electricity bills will rise 74 cents a month in Gainesville, or about half a percentage point of the average homeowner’s monthly bill.

“Seventy cents — what’s that? A Coke?” said Mr. Regan, of the Gainesville utility.

Opponents of feed-in tariffs like Marcel Hawiger, a staff attorney for the Utility Reform Network in California, say that the policy would hit poor people the hardest by raising their electricity rates because a relatively high percentage of their income goes to pay utility bills.

“Why should we use regressive taxation to support the most expensive form of renewable energy?” Mr. Hawiger asked.

The solar programs have sometimes proved so popular that costs can spiral out of control. Last fall, blockbuster growth forced Spain to cap the number of solar installations it would subsidize. Ontario, which has had a feed-in tariff since 2006, also suspended its program last year after being oversubscribed, but wants to restart the policy.
Even in Gainesville, homeowners wanting to put solar panels on their roof are now out of luck: a few days after introducing the policy, the city reached its cap on solar payments for this year and next. Meanwhile, a handful of utilities around the country are already doing similar things voluntarily, albeit on a tiny scale.

For now, at least, solar-power advocates do not believe they have the votes in Congress to adopt a national feed-in tariff system like the ones in Germany and Spain. They are putting their hopes, instead, on proposals in Congress to mandate that a certain percentage of electricity comes from renewables.

Source:  New York Times

The LA City Council said yes to LA DWP for 150 megawatts of solar.

After years of contention, the Los Angeles City Council has granted the city’s utility, the biggest municipal utility in the U.S., the power to enter into contracts with solar power producers at above retail rates.

The council delegated to the Los Angeles Department of Water and Power (LA DWP) the right to enter into up to 150 megawatts of feed-in tariff (FIT) contracts with commercial and residential solar power producers.

Like a similar program proposed by LA Mayor Antonio Villaraigosa in 2008, the contracts pre-approved by the City Council allow the DWP to purchase, at an above retail rate (tariff), the electricity fed into the utility’s grid by solar system owners over a pre-designated number of years.

A demonstration FIT plan previously approved by the City Council and already budgeted by DWP allots $58 million over twenty-two years to support ten megawatts of rooftop solar contracts. It is expected to cost $0.9 million in its first year, increase slowly to $2.9 million in 2016 and, finally, to expend $46 million from 2017 to 2033. Its 22-year term is likely indicative of what DWP is considering for larger volume programs

The ten-megawatt demo plan will include systems between 30 kilowatts and 999 kilowatts. The first 8 megawatts, designated for the LA basin, will be for systems between 151 kilowatts and 999 kilowatts. The second 1.7 megawatts, also designated for the LA basin, will be for systems between 30 kilowatts and 150 kilowatts. The last 0.3 megawatts are designated for LA DWP’s Owens Valley service territory and are designated for systems between 30 kilowatts and 150 kilowatts.

The new measure approved by the City Council allows the utility to enter into contracts of up to 150 megawatts.

The approved plan will require approval from the LA DWP’s Board of Directors. Assent is expected.
Feed-in tariffs were conceived in California in the late 1970s as a way to grow renewables by promising a profit over an extended period of time to those willing to risk investing in solar, wind, geothermal and other renewables. The FIT concept was refined in Germany and then in other EU countries from 1999 on.

Advocates say well-designed FITs, with modest tariffs that decline over time in a controlled way as solar capacity grows, drive renewables growth. Opponents claim they inevitably lead to investment bubbles. California’s auction mechanism is an alternative, market-based incentive program. It allows renewable power producers to establish the rate of return in an open bidding process. The DWP demo plan calls for prices set by bidding, using an avoided-cost baseline. Once again, this is likely indicative of what the larger volume contracts will call for.

Villaraigosa kicked off mainstream debate about an FIT program in LA with his 2008 proposal to fund 150 megawatts of solar. Polls showed strong public approval for it and studies by the Los Angeles Business Council (LABC) showed it would create jobs and generate economic activity.

But the Villaraigosa plan ran afoul of ratepayer suspicions about elevated power prices, resistance from LA DWP traditionalists and a controversy between the electricians’ union and independent solar installers over who would have access to the work.
New developments of greater force have moved some of those obstacles aside.

VoteSolar’s Adam Browning, who, along with many other renewables, environmental and grassroots activists, has long fought for an LA FIT, said new California legislation and the efforts of LA DWP General Manager Ron Nichols were the primary drivers behind the City Council’s move.

“There is a huge opportunity,” Browning said of the potential to build rooftop solar in Los Angeles. “LA DWP is the country’s biggest municipally-owned utility,” he noted, but “also the farthest behind in California.” Nichols, Browning said, “is the right person [for the General Manager job] and now we have the force of law.”

Due to initiatives put in place by California Governor Jerry Brown, LA DWP must meet the state’s mandated 33 percent renewables by 2020 standard as well as the SB 32-mandated 75 megawatts of FIT-supported renewables.

Nichols, who took charge at the utility after the Villaraigosa plan was waylaid, told a Los Angeles newspaper that the demonstration FIT program is just the beginning of a larger push by LA DWP for commercial and residential rooftop solar.

“We need to do this,” Nichols was quoted, referring to the demonstration plan, “to learn about the costs and the pricing.” But ultimately, he said, “we hope to have hundreds of these as we go forward.”

LABC was credited by Browning and others as one of the key forces in the city council finally turning to the FIT incentive. LABC took up the cause in 2009, backing Villaraigosa by funding five studies that showed how jobs, revenues and pollution reduction benefits would come from driving solar growth.

Approximately eighteen months ago, LABC aligned itself with solar incentive programs emerging across the country and joined the effort to rebrand the FIT concept as a CLEAN Solar program. By enacting its CLEAN Solar FIT program, the LA City Council joined recent new entry Palo Alto, CA. and longstanding members Sacramento,CA, and Gainesville, FL, in the movement.

As recently detailed by GTM, the Palo Alto tariff will be set at its avoided cost price of $0.14 per kilowatt-hour. The Gainesville tariff was in the $0.26 to $0.32 range.

Source:  greentechmedia.com

30 years ago, Mayor Tom Bradley recommended that “The DWP should pay the highest justifiable cost for surplus power generated by its customers who invest in solar electric systems.”  Nothing happened.

14 years ago, Councilwoman Ruth Galanter and DWP General Manager David Freeman committed to “100,000 rooftop photovoltaic systems…by the year 2010.”  

LADWP’s mission is to provide clean, reliable water and power in a safe, environmentally responsible and cost-effective manner with excellent customer service to the communities we serve. Their vision is to be a world-class publicly-owned integrated utility, innovatively transformed to provide sustainable water and power to a green, robust and prosperous city. How they do this is in their plan. See https://www.piersystem.com/external/content/document/1643/280504/1/LADWP%20Strategic%20Planning.pdf

LADWP has had 6 General Managers in the past 4 years (9 in the past 10 years) which clearly shows that the Mayor and City Council do not and can not manage LADWP. Instead, LADWP career bureaucrats manage to keep the lights on and the water flowing and rates low while adding $200 million annually to the City General Fund. However, they do not support customer-owned renewable energy distributed generation beyond the legal mandate. They listen politely and follow their plan. So if you want LADWP to change their plan, then change the law.

Esteemed CLEAN LA Solar Coalition members and Solar Feed-in Tariff advocates,

Outcome of 11/2 City Council FIT hearing:

 The 11/2 hearing was a success in that each of the coalition members and FIT advocates had the opportunity express their grievances with the LADWP 6MW solar demonstration program in front of the entire Los Angeles City Council. And…the Councilmembers heard you loud and clear as expressed best when Council President Eric Garcetti recognized our “unparalleled coalition!”

 We will head back in the City Council Energy and Environment Committee (E2) on December 1^st at 9am. E2 Chairwoman Perry has promised to address the following issues on 12/1:

• establishing a fixed price or at least a floor for the demonstration program and the 75MW FIT program
• streamlining the application
• eliminating administrative overhead
• implementation timeline for 75MW