October 11, 2011

Solar@Work Offers Huge Discounts To Commercial Building Owners And Lease Holders

Posted by Steve Sacks under Building Operations, Energy, Finance, Free, Government, Green Economy, Incentives and Rebates, Make Money, Marketing Ideas, Photovoltaic, Save Money, Solar | Tags: , , , , , , , , , , , , |
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A new program in San Francisco, Solar@Work, offers discounts, and in some cases free installation, on solar arrays for commercial building owners and lease holders.  Almost any size business can qualify for the program that will lower energy costs for participants.  For businesses proactively addressing San Francisco’s required energy audits, this program requires a closer look. (For full analysis of San Francisco’s commercial building energy audit program, click here)

Solar@Work groups commercial building owners and/or lease holders together to reduce costs through economies of scale.  Participants generate the greatest savings on energy costs through the purchase of a solar array.  The cost of purchasing and installing a system can be prohibitive, so Solar@Work creates a discount on installation and financing through volume pricing.  A “traditional” solar lease is also available with no up front cost, but the savings on energy bills are markedly less significant.

The Collaborative Solar Procurement model created by the World Resources Institute allows the Solar@Work program to offer four financing options.  Owners can purchase systems at a discount, secure a solar lease, secure a capital loan, or finance through other options including power purchase agreements.

The goal is to collect enough businesses in the program to collectively generate 2 megawatts of power or more.  Applications are being accepted until October 31, 2011, and an informational conference call is scheduled for October 21, 2011.

The ideal applicants are owner/occupiers or long-term leasers whose available space on a roof or parking area is 5,000 square feet or more.

Solar City is the exclusive vendor for the program created by the World Resources Institute, the City and County of San Francisco’s Department of the Environment (SF Environment), in collaboration with the National Renewable Energy Laboratory (NREL), and Optony.

Solar City was selected through a competitive process to provide the installation services for the program.  The company anticipates hiring 400 new workers in the second half of 2011 including 100 in the Bay Area, partly due to Solar@Work.

Congratulations to WRI, San Francisco, and the other contributors to this program.  Solar@Work promises to be another great example of how sustainable development will lead a growth in the economy through reducing energy costs and increasing employment.

 

July 9, 2011

PACE Lawsuit Update

Posted by Steve Sacks under Energy, Finance, Finance / Mortgages, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Solar | Tags: , , , , , , , , , , , , , , |
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As you will recall, the Property Assessed Clean Energy program allows residents to pay for solar installations through a tax assessment on their property.  Last year, the Federal Housing Finance Agency (FHFA) essentially stopped the program with a letter advising mortgage lenders that Fannie Mae and Freddie Mac would not purchase mortgages on homes that also have PACE financing.  California and eight other parties sued the FHFA to rescind its letter and change its policy.

The PACE lawsuit (Case Nos. 10-cv-03084 CW, 10-cv-03270, CW, 10-cv-03317 CW, 10-cv-04482 CW) continues with a possible end some time in the summer of 2012.  A trial date is set for April 30, 2012.  (click here for the Case Management Order).  Some of my previous coverage of the lawsuit can be found by clicking here. In the beginning of this year, the court asked the Attorney General of the United States to submit a Statement Of Interest offering its position regarding the PACE lawsuit.

Although the executive branch previously endorsed the PACE program, and the creative financing mechanism that is the cornerstone, the Statement of Interest evades the issue at hand (the subrogation of primary mortgages).  Instead, the DOJ argues simply that the the FHFA has authority to bring and defend its own lawsuits and the DOJ does not see a need or mandate to interfere with FHFA’s handling of the matter.  The DOJ then states its only area of concern is that the plaintiffs lack standing to bring the suit.  While plaintiffs may lack standing (I doubt it), the DOJ could have also offered analysis of the legitimacy of the program’s structure.

The parties are now heading to the discovery stage of litigation, but frankly there is nothing to discover.  As far as I can tell, there are really no material facts in dispute.  Either the FHFA is going to allow for PACE programs to move forward, follow the Department of Energy guidelines (Full Guidelines Here), and acknowledge the minimal risks involved.  Or, the FHFA will undermine one of the best modern approaches to nurturing mainstream adoption of sustainable development.

Unless Congress passes a law supporting PACE financing, the lawsuit will move forward, and frankly the prospects don’t look good for plaintiffs.  That means PACE programs will essentially become a great idea undermined by the inflexibility of bureaucracy.

 

June 13, 2011

An Argument For Renewable Energy, And A Response To Robert Bryce

Posted by Steve Sacks under Carbon, Energy, Government, Law, Legislation, and Policy, Solar | Tags: , , , , , , , , , , , , , , |
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On June 8, 2011, Mr. Robert Bryce, author of the recently published Power Hungry, The Myth Of Clean Energy And The Real Fuels Of The Future, wrote an Op-Ed piece to the New York Times. In the piece, Mr. Bryce argues that the recently signed mandate requiring a 30% renewable portfolio standard places too high a burden on society.  Mr. Bryce attempts a clever approach addressing considerations some sustainability advocates fail to consider.

Of note, I will be reading Mr. Bryce’s book and commenting on it shortly.  While I do not agree with Mr. Bryce’s observations in his Op-Ed piece, he does raise essential considerations that any advocate for sustainability must address.

The two main issues that Mr. Bryce raises in his short Op-Ed are that renewable energy sources such as solar thermal and wind power require vast amounts of space to generate large-scale power.  The other issue is that the manufacture of renewable power infrastructure requires vast natural resources.  Mr. Bryce’s Op-Ed can be found here.  Below is a critique of Mr. Bryce’s opinions.

(more…)

 

July 14, 2010

California Suspends Solar Incentive Program!

Posted by Steve Sacks under Energy, Finance, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Photovoltaic, Solar | Tags: , , , , , , , , , , |
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The California Public Utilities Commission instituted a three month suspension of rebates under the California Solar Initiative.  This Solar Initiative is the vehicle whereby the state government provides tax-funded incentives to install solar arrays.   To read the ruling, click here.

What is so unfortunate about this ruling is that the suspension is directed at non-profits and schools – the very entities that can not make up for lost incentives through tax breaks.  (The Federal government offers tax breaks for solar installations, and California offers tax incentives for solar installations under Section 73 of the California Revenue and Taxation Code, amended by AB 1451 in 2008.)  The suspension is also directed to projects that are 30kw or greater, an obvious attempt to control the cost of the program by pausing incentives to the biggest beneficiaries.

The PUC suspension also appears counter-intuitive from an ROI perspective.  Tax-funded rebates to schools are far more likely to pay for themselves because school utility bills  are also paid with tax dollars.  The school utility bills will decrease after solar arrays are operational – a direct return on tax-payer investment!

The California Solar Initiative is wildly successful, and it has always been the intention of the program to gradually reduce the allocations as the cost of installing solar systems decreases.  (Environment California has a great report and chart (albiet two years old) that shows how the projected reduction in incentives is tied to the projected reduction in the cost of installations).  This is smart tax policy, but to suspend the Solar Initiative for the entities that provide the tax-payer with the greatest ROI, just does not make sense. 

The PUC is receiving comments on the California Solar Initiative over the next three months while the suspension is in effect.  

The California PUC recently issued its Annual Program Assessment to the Legislature regarding the California Solar Initiative.  Click here for a summary and access to the full report.

The Oakland Tribune has a great article on the suspension: Click here to read that article.

 

 

March 4, 2010

AB 510 Signed By Governor Schwarzenegger! (Part 2)

Posted by Steve Sacks under Building and Design, Building Operations, Energy, Finance, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Make Money, Marketing Ideas, Photovoltaic, Solar, Wind | Tags: , , , , , , , , , , , , , , , |
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Governor Schwarzenegger signed AB 510 on February 26, 2010 (Click here for full text of AB 510) (Click here for press release and video). We covered the basic elements of the new law in Part 1 of our coverage last week (click here for that post). Now, we turn to some other elements of the law… some of the fine print, if you will…

The law balances the interests of utilities, customer-generators, and non-participating customers. (This balance, and the fact that there is no discernable impact to the General Fund, are likely the reasons the bill passed the Senate by a nearly unanimous vote.)    In addition to lowering the proposed cap from 10% to 5%, an example of concessions to utilities is found in Section (3)(l).  That section requires that customer-generators pay the Department of Water Resources for all charges that would otherwise be imposed on the customer had they not entered the net-metering arrangement.

Another significant concession is found in Section (5)(B).  Under that section, the utilities can use the energy provided through net-metering arrangements toward the Renewable Portfolio Requirements (outlined in Public Utilities Code Section 399.15 and 387).  Under previous net-metering law, utilities were not permitted to count net-metering toward these obligations.  Now, utilities have a chance to meet the aggressive target of generating 33% of their energy from renewables by 2020.  (The utilities are far from reaching the Renewable Portfolio Requirements of 20% of energy from renewables by 2010).  If California residents and businesses continue to install solar and wind power generation, the utilities have a chance to meet the portfolio requirements, but the current 5% cap will have to rise again.

On the consumer side, there are very reasonable concerns that net-metering raises the energy bill for non-metering customers.  To assuage those concerns, the bill establishes a rate-setting commission that will set net-metering compensation rates and provide a report detailing 1) the market effects of net-metering and co-energy metering, and 2) how the authority’s rate schedule ensures consumers who don’t enter net metering arrangements pay the same for power that customer-generators pay.

AB 510 reflects a state leading the way in establishing energy independence.  It is great legislation now because it doesn’t tap into the General Fund, and it encourages private businesses (e.g. Solar City or Renewable Funding, LLC).  The law is another step forward that keeps California as a leader in United States renewable energy generation.

 

February 23, 2010

AB 510 On The Way To Governor’s Signature! (Part 1)

Posted by Steve Sacks under Building and Design, Building Operations, Energy, Finance, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Make Money, Marketing Ideas, Photovoltaic, Solar, Wind | Tags: , , , , , , , , , , , , |
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AB 510 (full text here) passed both the Senate and Assembly, and Governor Schwarzenegger says he will sign the bill into law.  The bill raises the cap set on the number of homes and businesses that can take advantage of net energy metering.  Yes, there’s a cap!  The utilities don’t want “customer-generators” producing power without limit, and the government appears concerned the customers will somehow tip the “balance of power” between customer-generators and utilities (yes, that’s an energy pun).

At its core, the bill states utilities are not required to issue permits and enter agreements with “customer-generators” (residential and commercial solar and wind power producers) beyond 5% of the utilities’ aggregate customer peak power demand.  The previous cap was 2.5%.

The legislation also addresses co-energy metering.  Co-energy metering is an arrangement between publicly owned utilities and customer-generators who produce between 10kw (50kw for wind) and 1MW.  These generators are compensated based on the time of energy use and generation.

On the other hand, standard net-metering arrangements are for customer-generators who produce 3 -10kw.  The rate at which net-metering customers are compensated is either a “time of use” model such as that with the co-energy metering producers, or a “baseline” model.

A ratemaking authority (also described in the bill) sets the rates for compensating customer-generators who have an energy surplus at the end of the year and follow the baseline model. The primary goal for the rate-making authority is to set a price that ensures non-participating customers pay the same for energy they would have otherwise paid had no net-metering been used.

To its credit, the bill allows the ratemaking authority to compensate net energy producers for the value of the electricity itself, AND the value of the renewable attributes of the electricity.  This little nod allows net energy producers to receive a bonus if the renewable attributes of the energy production add indefinite or unforeseen benefits (Cap and Trade anyone?)

Congratulations (I hope not premature) to AB 510 sponsor, Assembly Member Nancy Skinner (14th District).  The bill was proposed last year as AB 560 (click here for more of that story), but it died in committee.  We’re glad to see it is on its way to the finish line this time!

Editor’s Note: Stay tuned for Part 2 of this post that will discuss other requirements and considerations in the bill. UPDATE: Click Here For Part 2

 

October 20, 2009

Congratulations AB 920!

Posted by Steve Sacks under Energy, Government, Incentives and Rebates, Law, Legislation, and Policy, Photovoltaic, Wind | Tags: , , , , , , , , , , |
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AB 920 was signed into law last week.  The law requires that utilities pay for energy they receive through net metering.  We have followed AB 920 (previously AB 1920) here at the CGBB since we posted our first articles nearly a year ago.  AB 920 is the common-sense approach to net metering.  

Net metering is an arrangement whereby utilities purchase power from consumers who generate power from solar arrays or small wind turbines.   Previously, utilities would provide credits against a utility bill.  Starting in 2011, utilities will be forced to pay power-producers wholesale rates for the power (if a credit remains at the end of the calendar year).   Cash compensation to the original power producer makes sense because the utility makes money by selling that same power to end users.  

AB 920 is a great step, but California needs to travel light years before we realize the “million solar roofs” idea.  At the very least, California needs to abandon the limits on the sizes of residential power production.  Currently, to be eligible for net metering, residences must limit the size of their solar array or wind turbine.  PG&E and other utilities argue that larger arrays and turbines will result in higher electricity rates for those not participating in net metering.  This argument can not be summarily dismissed.  There are legitimate concerns about reliability from residential power producers.  However, utility concerns can be addressed in future legislation (such as infrastructure service fees or production guarantees for net meter users over a certain size).   I appreciate that ideas such as this were left out of AB 920 in order to get it passed, but by no means does this mean the work is done.

Also, the net metering program has an overall cap, and after the cap is met residential power producers are not compensated for their power produced.  AB 560, proposed by Assemblymember Nancy Skinner, representing the 14th District, would have raised the cap for net metering power available for purchase from 2.5% of peak power to 5% of peak power.  PG&E supported that bill, but it died in committee .  For an article on some of the issue with the bill, click here.

AB 920 represents a positive step for residential solar and wind power in California, but we have miles to go before we sleep.

 

March 16, 2009

Renewal of Renewable Energy

Posted by Steve Sacks under Energy, Green Economy, Law, Legislation, and Policy | Tags: , , , , , , , , , |
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A partner, Roland Nikles,  at our firm, Bell, Rosenberg & Hughes sent the email below.  Thanks, Roland, great stuff!

“Peak electricity demand in California is approximately 60,000 megawatts. In excess of 20% of this is imported, mostly from the Southeastern U.S. and the Pacific Northwest.  Roughly half of this demand is fulfilled by natural gas, a little less than a fifth by nuclear plants, and a similar amount by hydroelectric power plants.  Peak usage (which happens seldom) and peak capacity are about equal, which is why we flirt with black-out conditions on hot summer days.

 

For 20 plus years environmental lobbying on the one hand, and rate capping on the other hand, inhibited the construction of new power plants.  We stood idly by as demand rose ‘til, Enron and the partly real, partly manufactured energy crisis of 2001 jolted us sufficiently to acknowledge that new capacity must be added.  In the meantime, high crude oil prices, stimulus dollars, and global warming are making alternative energy sources more viable and attractive than ever.  Advances in technology since we last subsidized renewable energy (wind power at Altamont Pass, Tehachepi, and San Gorgonio, early generation solar heat in the Mojave, and solar panels for swimming pools) promise that this time round, renewable energy will be economically sustainable on a large scale.  California utilities are mandated to achieve 20 percent renewable energy by 2017, and this appears eminently achievable.

 

BrightSource Energy of Oakland, a client [editor’s note: client of the firm at which the authors work], is one company at the forefront of this renewable energy renewal. They have contracts to develop 2,000 megawatts of solar power (heat generation technology) for California’s two major utilities:  Pacific Gas & Electric and Southern California Edison.  These contracts all by themselves represent a 4 percent increase in the state’s electrical power capacity. 

 

My brother-in-law, David, an early adopter of everything cool, has a 7kw solar panel installation on his roof.  If 3 million California households (26% of total households) had similar installations, that would add up to an additional 21,000 megawatts of renewable power.  Assuming an installation cost of $21,000 each, that would represent a cost of $3,000/kw, which I believe would be very competitive with building new nuclear power plants ($3,500 – $4,000 per kw).  

 

So let’s hear it for, clients, renewable energy, and brothers-in-law!  As Arnold would say, Go Kalifornia!”

 

December 30, 2008

Interview With California Assembly Member Jared Huffman

Posted by Steve Sacks under Energy, Green Economy, Incentives and Rebates, Interview, Law, Legislation, and Policy, People | Tags: , , , , , |
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The California Green Building Blog is proud to post our first interview.  Visit the “Interviews” page for all of the text.  The interview is with California Assembly Member Jared Huffman (6th Assembly District), sponsor of Assembly Bill 1920.  For further information on AB 1920 visit our post on the proposed legislation (Click Here).

Assembly Member Huffman joined the California Legislature in November 2006.  Prior to his service in State office, Assembly Member Huffman was Senior Attorney for the Natural Resources Defense Council (NRDC) and served on the board of the Marin Municipal Water District (MMWD).  He served for 12 years on the MMWD including three terms as Board President.

He lists  as some of his top priorities, preserving our natural resources; fighting global warming while building the California economy by investing in clean new technologies; and promoting sustainable land use and transportation policies. 

For more information on Assembly Member Huffman and his initiatives, visit his website (Click Here).

 

December 5, 2008

Million Solar Roofs Progress

Posted by Steve Sacks under Building and Design, Energy, Incentives and Rebates, Law, Legislation, and Policy, Materials and Manufacturing | Tags: , , , , , |
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On August 21, 2006, Governor Schwarzenegger signed Senate Bill 1, known as SB1, changing the definition of energy infrastructure in California forever. SB1 (AKA the “Million Solar Roofs Initiative”) earmarked roughly $3.3 billion for incentives, and set a goal to create 3,000 megawatts of solar-produced electricity by 2017. If successful, the new law will result in placement of solar energy generators on top of half of all new homes constructed in California by 2017. That, combined with incentives to put solar energy generators on existing buildings, promises a revolutionary shift of energy production from massive power plants to the roofs of individual homes and businesses. We’re still awaiting information on the program’s 2008 progress, but we do have numbers from 2007.  So, how bright is SB1′s future?

 

If initial reports are accurate, SB1 is off to a good start. According to the Solar Energy Industries Association (a trade group), and the New York Times, 100 megawatts of solar generating capacity was installed in California in 2007. (Matt Richtel and John Markoff, A Green Energy Industry Takes Root Under the California Sun, N.Y. Times, Feb. 1, 2008). That’s a 50% increase over 2006, and momentum indicates the number of installations will rise quickly in 2008. But, it is important to note that not all of the new power results from the passage of S B 1.

Incentives, under the new law, are divided into three components with the biggest incentives falling under the purview of the California Public Utilities Commission (“CPUC”). According to the CPUC, demand in 2007 for CPUC-administered incentives exceeded California’s total installed solar systems from all of the previous 26 years! But, these numbers just reflect demand for installations. The vast majority of actual installations in 2007, and thus the 100 megawatts referred to in the New York Times article, is from pre-SB1 incentives. Of all installations in 2007, only 17.9 megawatts of roughly 188 megawatts have been installed, inspected, and put into operation as a result of SBl.

 

This lag is a reflection of publicly owned utility inefficiencies in processing residential incentive requests, inherent project delivery time requirements, and a dearth of qualified solar system installers. Some utilities have addressed delay issues by providing additional staff to review applications. The project delivery time requirements will shorten as installers and designers gain experience and increase efficiency, but the dearth of qualified installers will only be fixed with training.

 

The Future of SB1, and the Progress of AB1920:

 

Over time, SB1 decreases financial incentives to consumers. The theory behind reduction in incentives is that as efficiencies increase in delivering solar energy systems, consumers will not need financial incentives to subsidize costs. Some fear this will stall SBl. To maintain the momentum of solar installations, state assembly member Jared Huffman has proposed ABl920, the California Solar Surplus Act. AB1920 aims to increase incentives for residential energy generators by proposing many amendments to SBl, including changes to the energy netting policies of utility companies.

 

Energy netting is a system where consumers who generate more electricity than they use feed electricity back into the grid. In this way, consumers can earn credits redeemable against their energy but if consumers generate enough electricity from their own systems, theoretically their overal1 annual production will exceed their overall annual consumption. Under current legislation, if a consumer has unused credits at the end of the calendar year, those credits wilt not roll over to the next year, and the utility sets the consumer’s credit account back to zero. Under AB1920, consumers will earn a retail rate for the surplus power they produce. That cash is credited against their energy bill, and if consumers annually produce more energy than they use, consumers are provided a cash rebate or that energy.

 

With literally billions of dollars being thrown at the consumer level solar energy industry, it’s a good time for contractors and developers to offer installation of solar energy systems as a service. Who thought infrastructure could be so small?

 

Do you want to find out how much solar energy a lot or home can generate? Go to http://sf.solarmap.org/ and enter any San Francisco address. Oakland is coming out with a similar map shortly, and CH2MHill, the sponsor of the map, plans to offer it to communities nationwide.

 

Some Helpful Websites:
PUC website: 
www.cpuc.ca.gov (general information on energy policies and solar initiatives)www.gosolarcalifornia.ca.gov  (information on rebate applications and netting policies)
“Solar Map:”
http://sf.solarmap.org/ (interactive map sponsored by CH2MHill and Google)
Research and Advocacy:
www.environmentcalifornia.org (including a great report on the efficacy of solar initiatives)
Renewable Energy News:
www.renewableenergyworld.com
 

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