Photo by Ehpien on Flickr
There’s a new reason to be proud (and financially pleased) to be a solar owner in California today. The Governator, aka Governor Schwarzenegger, said he’d be back to sign some solar bills after some political wrangling, and he did. One bill is for residents and the other bill is a feed-in-tariff for larger commercial installations. Both mean more incentives ($$) for going solar. Allow me to explain.
The First, AB 920, will amend the net metering law for most utilities in California, but not the city owned ones, like my very own LADWP. Bummer. But there’s hope they may copy this law. We’ll see. Meanwhile…
For solar powered Californians in San Francisco, San Diego, and my neighbors in Santa Monica and lovely Torrance, AB 920 changes the net metering law in significant ways that will encourage you to conserve power by paying you extra moula for the electricity you save. Why would you save? Because you get paid if you do.
Here’s how it works:
- With the old net metering law, if your solar panels produced more electricity than you actually used, your bill went to zero, but you got paid nothing for any extra power. The utilities just sold your extra power to your non-solar neighbors and didn’t even say thanks for the free power. How rude.
- With the new net metering law, Utilities must now PAY you cash money at the end of the year if your panels produce extra solar power. How much will they pay you per kWh?
- That’s still to be decided by the California Public Utility’s commission, but it should be significant.
- NOTE: To get your California solar rebate (separate from net metering), the maximum rebate money you can get is based on a solar system that meets your energy usage for last 12 months. Thus, purposely over sizing your system to produce more power and take advantage of this program doesn’t make financial sense. They’re probably not going to pay you THAT much extra per/kWh. The rebate law is written this way to encourage you to conserve energy from your current usage.
- Previously, owners with excess solar energy just decided to turn up the air conditioning and leave on the lights, rather than let the utility use their extra power for free. This new law fixes that mind-set. So, now, the more energy you save from your current usage, the more they’ll pay you for this new net metering program.
- The law goes into effect January 1, 2011, to allow the California Public Utility Commission to work out the details ($).
- So get rid of that old fridge and turn off the lights, damn it.
The second law, SB 32, is a Feed-in-Tariff (FiT) for commercial systems only.
- With this puppy, if you own a big warehouse with lots of roof space, you are allowed to put up more solar panels than your building uses.
- The utility will then pay the building’s owner for the extra energy at a rate that’s higher than regular electric rate.
- So, if the utility commission sets it at say 30 cents a kWh, and the regular rate is 15 cents/kWh, you’ve just made 15 cents per kWh profit for your extra solar. That may not sound like a lot until you consider how many solar panels can be crammed on top of Costco, or a high school, or Fat Sam’s Tuba Warehouse. If you produce a 1000 extra kWh a day, that’s $150 a day for letting the sun shine.
- The rate is to still to be set, so we’ll see how much this really adds up to.
- The other thing the FiT will do is jump start commercial solar Power Purchase Agreement (PPA) companies in California to offer their no money down programs to businesses. PPAs pay for the solar panels, and you just pay them for their discounted electric rate. Or, they could pay you for renting your roof space.
- PPA agreements are super-duper variable, so any business entertaining getting into one of these contracts should consult an experienced solar shark. –I mean, attorney. Slip of the tongue.
So that’s the news California solar people. Enjoy these extra savings and incentives while they last, for all good things must come to an end…. Before they do, get a free quote from one of our network of installers. Couldn’t hurt, ‘cause “free” is very cheap these days.
Psst! Hot tip: Free Solar Conference October 28th in California »« 3 reasons why the Sun blows my mind
Hey Tor – can you tell me what solar/renewable energy bills are currently working their way through the California legislature?
That is awesome, I am fighting with all my might to get this in AZ too. We need to adopt Feed-In Tariffs everywhere to transform the world solar!
Keep up the radio interviews, Dillon. Every bit of education counts.
Ian,
The best way to find out out is through votesolar.org. They’ll send you an email telling you what’s happening in every state, not just California. Join up and you’ll always be kept up to date. You can also email them on the site too, and they’re usually very good about getting back to you. Thanks for being concerned.
We are also very excited about this newest solar incentive. In order to be prepared for the devil’s advocates out there who will inevitably ask: Where are the utilities going to get the extra money to pay these warehouses for their kwh at this higher rate? From my taxes?
What do we answer them?
Thanks again, Solar Friends
You know, I was just reading the Economist at lunch and I answered my own question. They have an article in there about the smart grid. Everyone loves the idea of the smart grid and it definitely has the ability to save the environment from the horrible direction it is headed. But, it is going to cost some money–a lot of money. Still, it is an inevitable truth of our lives–we need clean energy and we need to pay for it.
Hi, I live in Sonoma County in Santa Rosa, I have accidentally become the spearhead guy for going solar in schools in sonoma county, at the behest of Solar Sonoma County. Basically, I am trying to find more bodies and brains, and in the mean-time, formulate an outline for how to proceed. One of the preliminary things I can work on now is how the financing will work. Do the new FIT laws allow for installations on say District buildings up to 3 MW, and for the school district to then sell that power into the FIT market. or would it be more advantageous and/or easier to pursue a PPA?
I am thinking an increase in demand for green power by IOU’s might result as we get closer to their deadlines for attaining their RPS standard. Would a PPA be more flexible and allow us to consider that we might then be more fully able to take financial advantage of this demaand by adjusting our price?
Are we locked into the feed-in-tarrif program if we go that route or could we decide the grass is greener on the other side and pursue a PPA.
Also, I can’t quite remember where I saw this, but I thought I remembered seeing wording in one of these bills regarding a requirement that IOU’s purchase all possible renewable energy within their jurisdiction. Was I huffing paint? what are the restrictions in asking price under these conditions?
I preface all this by saying that I think the CPUC is a hand-puppet and I’ll be damned if I ever saw a hand-puppet design a FIT program that was good for anyone but the hand.
Thanks for the post. I will appreciate any thoughts you have on this. Please excuse my verbosity, I have ADD.
Eric
I’m glad to have located this site — very useful information. My colleagues and I have searched extensively to find funding sources for urban green projects, and, unquestionably, that is the biggest challenge. Thanks for mentioning the PPAs; that’s a source we’ve studied at length. We also appreciate the info about the use of depreciation to reduce upfront expense & back end tax liability. At the end of the day, while we’re educating many groups about the value of green energy, affordability must resonate loud and clear. Otherwise five years hence we’ll still see major disparities in who goes solar and who continues to struggle w/huge utility bills and an unclean environment. Anyone who has additional ideas for cost savings in Indiana and Illinois and Michigan should send us emails.
I posted this in another thread but I guess I should put it here too.
I feel I have a unique and fair view into this debate having furthered research and efficiency in both fields of power generation. I am an electrical engineer and I have participated in a number of cutting edge solar research projects at universities (most funded by power companies). On the other hand I currently work as an electrical engineer in fossil generation for a power company increasing the efficiency and longevity of coal and gas plants.
I couldn’t resist commenting on this post which is actually part of a larger article with the rambling omitted. There is no doubt that coal will eventually be phased out the only question is how long that progress takes. That question can only be answered by a delicate balance between technology, economics and what cost the public is willing to pay (public desire). There are many people who can blame stubborn coal plant managers and greedy power utility accountants for continuing to use coal as a cheap and available power source. However, maybe it’s our fault for not being willing to let or afford our power bill double. I know that there are occasionally some figures that loosely claim that it would be cheaper to go all solar but honestly can you imagine that every decision maker in every electrical utility company in the world, who are out to save money, would go with a more expensive and environmentally detrimental generation source for no reason.
According to the EIA only 2.3% of energy produced in 2008 came from wind and solar combined. We are making big adjustments quickly but to think that we can turn a switch and instantly convert from a power source that began our modern age to other emerging technologies in their infancy overnight is not fair.
I absolutely agree with EPA regulations and fines but not as punishments to the big greedy companies but incentives. There are still a slew of engineering and physics issues that need to be addressed before any of these other renewable energy sources can compete with what we already use. I am glad that society has such great faith and total confidence in electrical engineers and scientist but there is a great deal of hurdles that need to be crossed. One example of an issue being addressed is that we have to produce electricity at exactly the moment it is needed by the load (city). This means that at night, cloudy days, dust storms, etc, an entire cities power needs to be have the capability of being produced another way, burning coal or gas (gas being only marginally cleaner). The power load requirements for a city not only change with weather conditions and time of day but also time of year. The power demand for a Phoenix home quadruples during the summer month. There are currently no feasible methods to store large quantities of energy and if there were then someone would be using them.
There are a lot of people coming together to progress the technology to a point where is feasible to use. We constantly see funding for research from investors, utility companies and taxpayers.
Essentially it is the general public of this generation’s willingness to sacrifice that will reduce our dependency on coal for our children. Simple economics will explain that the trillions of dollars spent to reduce our reliance on coal, in the forms of fines, research, environmental regulations, is passed down to anyone who pays electric bills. If the cost to produce electricity increases by 30% due to regulations and fines then it follows that our bills have to eventually increase by 30% as well. I can tell you from experience that the markup of electricity is not high enough to absorb the increased regulations without passing it to the consumer. If the price of coco beans increases so will the cost of a Hersheys bar. If the electric companies essentially aren’t paying the fines and we are then whose responsibility or blame is the speed of our reduction on coal dependence?
Public opinion and willingness to sacrifice is the key to the speed of independence. The amazing technological advances related to Smartphone’s, flat screen HD TVs and gaming are all tied to an increase in consumer interest. The speed of overcoming technological hurdles to improve clean energy production is directly proportional to consumer interest as well. If nobody cared or was willing to spend more in taxes to cover research grants, donate to a renewable energy interest group or pay a higher electrical bill to pay for environmental power plant controls then we obviously wouldn’t get anywhere.
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Tor – thanks for the update on net metering. If we decide to install PV on our home via a power purchase agreement, would we still qualify for net metering? Or would the owner of the solar equipment get the net metering muuula instead?
Hi, Tara,
Net metering is always an agreement between you and the utility. Think of a solar PPA (power purchase agreement) or a solar lease for that matter as just another way to finance your system.
In other words, wheather you finance your solar through a PPA, a lease, a second mortgage or through PACE/municipal financing, that will never affect net metering and its particular benefits in your area.
That being said, always check if you can finance your system through PACE or a second mortgage first. Leases and PPAs will save you money, yes, but in the long run, the mortgage and PACE programs have a much higher return on investment. The only drawback to a mortgage is the upfront debt load, but payments may be LESS than your current electric bill, especially with the added net metering benefit. My advice is to always get a quote for both buying a system and leasing/PPA, and then compare.
Hope that helps.
