Electricity Bill

Source:  Silicon Valley Mercury News, reporter Dana Hull:

With the sun setting before 5 p.m., solar power may be the last thing on your mind these days.

But declining panel prices, a federal tax credit and a state rebate all make now a good time to at least investigate whether solar power might make sense for your home — and your budget.

"If you're thinking that you'd like to go solar within the next few years, right now is the time to do it," said Lynn Jurich, president and co-founder of SunRun, a San Francisco-based startup that provides solar financing for consumers who can't afford the upfront costs of buying their own solar systems. "Panels are on sale right now. There's a sweet spot where the state rebates are still relatively high, but the costs have come down."

And winter is a good season to research solar options, experts say. It's generally a slower time for the industry, which means companies may be willing to give you a better deal.

If you're thinking about going solar, here's a checklist of things to think about:

• Take a good, hard look at your electricity usage over the past year or several months. You probably know how much you pay for electricity every month and have records of the checks or bills paid to PG&E or your municipal utility. But do you know how much electricity you actually use? Electricity is charged by the kilowatt-hour (kWh). Some people use as little as 300 kWh per month; others easily use more than 1,200 kWh a month.

In general, solar is a much better investment for people who use a lot of electricity. And PG&E has a tiered rate structure, so customers who use more electricity are charged more.

Understand how you use electricity," said Sue Kateley, executive director of CALSEIA, the California Solar Energy Industries Association. "Get out your bill and look at the tiered rates. If you don't use a lot of electricity — if you are a Tier One or Tier Two customer — then you really need to do a cost analysis to see if solar is cost-effective."

• Take a look at the roof of your house. How old is your roof, and what kind of shape is it in? If your roof is due to be replaced, you'll want to do that before, or along with, adding solar.
• And is your roof ideally situated for solar? Does it face south? "Shading" is also an issue: your roof should have clear, unobstructed access to the sun for most of the day and be free from shade from trees or other buildings.
• Shop around. Ask friends and neighbors who have already installed solar power if they've been happy with their systems. Learn about financing options: Do you have to have the money for the entire system upfront, or does your installer offer a leasing option?

Interview at least three potential installers and obtain bids in writing before making a decision. Whatever the salesperson tells you should be in writing in the contract.

• If you buy electricity from one of California's three investor-owned utilities — PG&E, Southern California Edison or San Diego Gas & Electric — and you have roof or ground space that gets unobstructed sunlight from 11 a.m. to 6 p.m. year round, you qualify for cash back incentives through the California Solar Initiative.

The California Solar Initiative (CSI) was started in 2006 to provide $3 billion in incentives for solar energy projects by 2016. Rebates for smaller residential systems are given upfront — a one-time payment based on system size. The current rebate level for PG&E residential customers stands at $1.10 per watt. So if you're putting in a 5 kw system, that results in a $5,500 rebate. But as more people apply for the rebates, the incentives are reduced, and many experts expect them to drop further later this spring.

Customers of municipal utilities may also qualify for incentives through their municipal service provider.

• Be sure to apply for the Solar Federal Tax Credit, which allows you to claim up to 30 percent of the costs for a new system. A buyer who installs a $25,000 solar panel system on his or her roof will get $7,500 in income tax credits.
• Consider your long-term electricity needs, and find out if the solar technology you're interested in allows you to add on more panels over time if necessary. A swimming pool, changes in family size or the use of a plug-in hybrid car could vastly change your energy consumption.

By Scott Gordon, Director of Sales, HelioPower

If there were a most commonly asked question contest in the solar business, this question would win hands down: “How long will it take for my solar system to pay for itself?” (Incidentally the second most asked question is: “I have an XXX square foot house, how many solar panels do I need?”).

As you can imagine neither question is particularly easy to answer and both depend on the individual circumstances. If we start with the second question first, the answer is: “The number of panels you require, Mr. Customer, depends upon your 12 month electrical usage history, how your roof is configured, and the type of panels you choose to install.” In other words, without knowing the particulars of a customer’s situation, it’s impossible to answer what on the surface seems like a simple question.

Answering the first question (concerning solar payback) is more complicated because we need to establish a definition of ‘payback’ before we can adequately get to the nuts and bolts answer the customer is seeking.

Then we need to apply customer specific financials to make a final determination. In my experience as both a solar customer and salesman, I believe that there are three ways to think about a solar power system’s payback:

1. ROI – (Return on Investment) – This is what most customers think about. ROI determines how many years of energy savings are required for the solar power system to pay for itself.
2. IRR – (Internal Rate of Return) – Least considered payback methodology, IRR compares a solar ‘investment’ return to other conservative investment returns like interest paid by savings accounts, treasury bills & other bonds, certificates of deposit, etc.
3. Cash Flow – Can financing be obtained that generates positive cash flow for the customer? In other words, will the finance payment be less than the current electric bill? This is truly the Holy Grail.

Using my own solar power system as an example, I’ll address all three of these payback methodologies.

Gordon Residence, solar power in Laguna Beach, CA

1. ROI – My system (installed in February 2007) has an eight year ROI. It will take eight years of energy savings (compounded at 6.7% annually) before my system pays for itself.
2. IRR – That same system provides me with an IRR of 12%. I’m currently paying 4.2% on the money I borrowed to finance the system, so my ‘net return’ is 7.8% (way better than my savings, CDs, or bonds are paying me and certainly better than the 24 month return on my stock portfolio!).

3. Cash Flow – Most importantly, I’ve been cash flow positive from the FIRST MONTH. How? I swapped a $150-200/month electric bill for a $150/month Home Equity payment. Unlike my electric bill, the $150 HELOC payment was entirely tax deductable since it is 100% interest paid toward a qualifying home improvement.
Over the last two years, I’ve paid off a significant portion of the principle (which lowers the monthly payment) and had some luck on the interest rate front. Today, I am $110/month cash flow positive, yet my solar panel system won’t “pay for itself” for another six years!! Funny, because it’s paid me every single month since I installed it in 2007. As you can see, solar payback is truly a matter of perspective.

With the recent removal of the cap on the residential tax credit (Federal), IRR in some utilities is approaching 20%. Warren Buffet became a billionaire by averaging a 20% return over the course of his investing career. Bernie Madoff defrauded investors of billions by promising a 12% return.

A solar power system will provide you with a guaranteed conservative Buffett-like return, without making off with your money in Madoffesque fashion. Your exact return will ultimately be determined by your utility’s rebate level; your appetite for tax credits; and net system price.

If you can achieve positive cash flow with solar, your return from either/and ROI or IRR standpoint become less important. Cash is king, and the more of it you keep every month, the better off you’ll be in the long run. However you decide to calculate the payback on your solar panel system, remember, like any attractive investment, there is a cost to wait. Rebates are ticking down and utility rates keep going up. Every month you delay could cost you hundreds of dollars. Now that’s food for thought.

The intent of the Legislature is that AB 811 should be used to finance the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to residential, commercial, industrial, or other real property.

AB 811 authorizes a property owner, upon written consent of an authorized city official, to purchase directly the related equipment and materials for the installation of distributed generation renewable energy sources or energy efficiency improvements and to contract directly for the installation of those sources or improvements. 

Funding options include using the general fund, issuing municipal bonds, partnering with a utility to get financing or setting up private financing.  

Palm Desert and Berkeley led the legislative charge to put AB 811 in place, and have now enabled hundreds of properties to be outfitted with energy efficiency and renewable energy systems including solar. The “Berkeley First” program was launched Nov. 07. Their pilot program is fully subscribed at $1.5 million.  The Palm Desert Energy Independence program is now in its third round of financing, having installed $7.5 million in energy efficiency and solar photovoltaic systems in their town.  

The Sonoma County Energy Independence program has completed a feasibility study and is planning on offering a $40 million program, which will also include water conservation systems.

San Diego is working on a “Solar Roof Program.” The pilot project will focus on 150 to 300 homes, and 1 technology – solar photovoltaic. Success for the pilot is deemed to be completing the financing cycle, collecting 150-200 loan packages, and aggregating those smaller loans into larger packages that can be sold off on the municipal bond market. Encinitas, Napa and Redlands are all in the exploration phase of AB 811 programs.

Cities like Anaheim and Santa Monica have solar supportive programs already in place.  Santa Monica promotes solar adoption through its Solar Santa Monica program.  Solar installation firms bid for program, and guarantee “group” pricing.  HelioPower is a installer for this program.   

All across California residents and property owners are working with their elected officials to find new and innovative ways to increase the use of sun to power our electricity needs. 

For further information and a review of the legislation, click here. Support AB 811 adoption in your town! 

Breaking news on rising rnergy costs in California…

From Associated Press: "Calif. regulators approve SoCal Edison rate hikes"

ROSEMEAD, Calif.—California regulators have approved a Southern California Edison Co. rate hike that adds $2 to $4 a month to the average residential bill.

Rosemead-based Edison says rate hikes are necessary to upgrade transmission lines and buy equipment.

The California Public Utilities Commission approved the increases Thursday. The hikes go into effect April 4.

PUC president Michael Peevey says it will add $2 to the average monthly residential bill of $85, but consumer groups estimate it's closer to $4. Rates for business firms also increase.

Edison estimates 65 percent of its 4.3 million residential customers would see little or no change in their monthly charges because they participate in special programs for low-income families or consume little power.

From Orange County Register: "Regulators approve $2.1 Billion electric rate hike"

State regulators have approved a rate hike that will give Southern California Edison an extra $2.1 billion in revenue over the next three years.

The hike will raise the average residential bill $2 or so, to $85 a month, officials said.

Some details of the proposal changed on the dais, but regulators granted the utility $106 million for employee incentive pay, and $4.4 million to start re-licensing San Onofre Nuclear Generating Station, where licenses expire in 2022.

Thursday morning, the California Public Utilities Commission chose the greater increase of two rate hike proposals before it, on a 4-1 vote. Emerging victorious was a slightly-scaled-down plan penned by commission president – and former Southern California Edison executive – Michael Peevey.

The rejected proposal would have given Southern California Edison a smaller increase – about $1.4 billion over three years. That was not enough.

"I cannot support a decision that would leave California hamstrung," Peevey said. The less-expensive rate hike "would require deferral of vital infrastructure projects and potentially lay off hundreds of workers," he said.

Commissioner Dian Grueneich was the only one to disagree.

"If ever there was a time to leave these dollars in the hands of Southern California Edison's customers, now is the time," said Grueneich.

The smaller increase was robust and prudent, she said. It would have saved ratepayers $765 million over the next three years, while still allowing Southern California Edison to invest in infrastructure.

Grueneich took particular exception to Southern California Edison's claims that the smaller increase would force it to lay off 1,000 workers. "Edison's claim defies logic," she said, suggesting the utility was "crying wolf."

More excerpts:

"Edison is taking advantage of economic concerns to drive through rate hikes that can only add to the pain," TURN executive director Mark Toney said in a prepared statement. "The CPUC did all Edison customers a disservice today."

That sentiment was echoed by the Division of Ratepayer Advocates, the PUC's independent consumer advocacy arm. This decision gives Edison "excessive revenue increases," it said in a prepared statement.

"The cumulative amount of the increases and the resulting rise in electric rates will impose an additional financial burden on Edison's Southern California customers and households during these difficult economic times," said DRA Deputy Director David Ashuckian in the statement.

For the full story click here.

HelioPower joins other environmentally oriented companies to support the city of Palm Desert's Bright Ideas Expo, this Saturday, March 14, from 11am to 3pm. The focus of this family oriented & kid-friendly Expo is: Ideas to save money on your energy bills, and living “green.”

The Expo will be held in the Palm Desert Civic Center Park, located at Fred Waring Drive and San Pablo Avenue. HelioPower local solar energy experts, Matt Rifkin and Matt McPherson, will be at Booth 29!  Talk to our Palm Desert team about how we can help you reduce or eliminate your electric bill and use the city's Energy Independence Program to finance the purchase. 

For more information about the Palm Desert Energy Independence Program, click here.

HelioPower residential solar panel system in Palm Desert, CA

Residential solar panel installation in Encinitas, CA by HelioPower

Generous state and utility rebates and now the new Federal Incentive Tax Credit for renewable energy can lift up to 50% off the price of a solar power system for your home or business.  It has never been a better time to invest in a solar electricity system, thus greatly reducing or eliminating your electric bill altogether!

A solar electric or panel system sits atop your roof and generates electricity from the sun!  You use very limited amounts of electricity from your utility company. 

New Federal Tax Credits for buying a Solar Power System just increased to 30% with no cap for either residential or commercial systems. When you combine these AMT exempt Federal Tax Credits with State Rebates, you can save nearly 50% on a new system!

In these volatile economic times we continue to be faced with escalating electricity costs. When you invest in a solar power system your budget is insulated from continued electricity rate hikes. For example, starting in January 2009 SCE will increase your rates by 25% to 30% as a result of higher natural gas and transmission costs. This marks the third rate increase in just four years!

Additionally, a solar electric system will increase the value of your home or business. A recent study from the Appraisal Institute demonstrated that the selling price of homes increased by $20.73 for every $1.00 of decrease in annual utility bills. Using this math, a solar electric system often pays for itself the day it’s installed.

Call the HelioPower sales team at 1-87-SOLAR-888 to get a free on site analysis and customized quote for your rooftop solar power system. 

Residential Ground Mounted Solar Power system in Temecula, CA by HelioPower

In concert with the solar industry’s biggest U.S. event, Solar Power International 08, HelioEMS, Energy Management Solutions, and HelioPower have announced a joint promotion to assist California customers.  The promotion, which runs through the end of the year, involves both energy savings technologies and a $500 discount on any residential or commercial solar panel system installation.  Solar Power International 08 takes place in San Diego, October 13-17, 2008.

Energy evaluation and reduction is the initial step any company should take to improve energy efficiency.  All commercial clients who sign up for a solar power system during this promotion and/or at the show will receive a complimentary energy on site walk through of their facility with a HelioEMS team member. 

From HelioPower, residential and commercial clients who contract for a solar power system will receive a $500 discount off their system price and a check for $500 on any referrals they send that result in a new solar panel system being installed.

“This promotion could not have come at a better time,” said Steve LoRusso, Vice President of Sales at HelioPower.  “With the extension of the 30% Federal Income Tax Credit now in place and with the removal of the $2,000 cap from residential tax credits, that easily makes what was a good investment in solar an absolutely great investment!  With utility rates going up like a rocket, we just can’t wait to show our new customers why they need to take a look at what could be their best investment in a decade.  Even if you looked at solar previously, you need to re-visit this investment, as solar is now 30% more lucrative!”

The solar investment tax credit provisions in H.R. 1424, the Emergency Economic Stabilization Act of 2008, passed last week include:

• Extension for 8 years of the 30-percent tax credit for both residential and commercial solar installations
• Elimination of the $2,000 monetary cap for residential solar electric installations, creating a true 30-percent tax credit (effective for property placed in service after December 31, 2008)
• Allowance for Alternative Minimum Tax (AMT) filers, both businesses and individuals, to take the credit

These credits are in addition to local state, city and utility based rebates that vary according to each region. 

“We’re delighted to partner with HelioPower to insure commercial clients are utilizing energy efficiently, prior to investing in a solar photovoltaic (PV) system,” said TR Bietsch, Managing Director of HelioEMS, Energy Management Solutions. “An energy walk-through of their facility enables us to assist customers right away with ideas and suggestions to save money on their electric bill.” 

Already an innovator in its efforts to reduce its carbon footprint, the city of Palm Desert is one step closer to realizing its goal of reducing citywide energy consumption by 30 percent before 2012. Governor Schwarzenegger recently signed Assembly Bill 811 into law as an “urgency measure,” for the first time allowing city and county governments throughout California to provide loans to property owners planning home or business improvements that will reduce energy consumption. The bill, termed locally the Energy Independence Program, was written and lobbied for by Palm Desert’s civic leaders.

Palm Desert’s City Council is has passed a program to put the bill into effect locally as quickly and simply as possible, and has already heard from more than 275 residents who are interested in participating.  The Council approved the Energy Independence Program at its regular meeting on August 28. The city plans to provide loans for as little as $5,000, with no upper limit, for improvements such as efficient air-conditioning, dual-pane windows, pool pumps, solar panels, or white roofs—anything that will reduce electricity consumption and is considered a permanent fixture. The city will provide low-interest loans requiring no credit checks or other qualifications other than the title to improved property. The loans will be paid back as part of the property tax bill—meaning if the home or business is sold, the loan stays with the property.

“Three years ago, we set a lofty goal of reducing our energy use by 30 percent, and now we have the means to accomplish it,” said Councilman Jim Ferguson, who spearheaded the passage of the Energy Independence Program. “During the summer months, when temperatures regularly reach over 100 degrees, Palm Desert residents can pay over $1000 a month for electricity. This program will empower them to explore renewable energy sources and make meaningful changes for the environment as well as their own finances.” 

The city has enlisted the expertise of EcoMotion, a consulting company that also advises cities such as Anaheim and Santa Monica on their environmental initiatives. Under the leadership of president Ted Flanigan, EcoMotion will coordinate and help facilitate the loan program. Flanigan will also work to document Palm Desert’s carbon footprint and suggest further improvements to the city’s already aggressive energy- and emissions-reduction programs.

For more information please see, http://www.cityofpalmdesert.org/.

Customers of Moreno Valley Utility now have another reason to consider solar – a rebate that can cut the cost of their installation by 40% or more.  On August 26, 2008, the City Council approved the "2008 Solar Special Program," designed to help MVU customers at the same time it is helping the City meet its renewable energy goals.

"Our Solar Special reflects the basic standards set by the California Solar Initiative," declared George Hanson, Moreno Valley Electric Utility Manager. "But we wanted to make our rebate more generous, and our process simpler, to encourage more participation."

Moreno Valley Utility customers who take advantage of the 2008 Solar Special can get a rebate of $4.00/AC Watt.  Like the program offered through Southern California Edison, solar installations must be on the customer's premises, and offset part of all of the customer's own electricity demand.  Systems must have a meter that measures how much electricity is generated and therefore how much credit the customer earns against the monthly utility bill.  Under California's net metering law, customers can only "zero out" their bill – they cannot earn credit for excess electricity production.

The minimum rebate of $4,000 is for an installation of 1 kW (1,000 watts); the maximum rebate for a residential installation is $25,000 (on a system size of 6.25 kW) and for commercial, industrial or governmental is $100,000 (system size of 25 kW).  The actual amount of the rebate will take into consideration solar panel output, inverter efficiency and design factors such as climate, azimuth, tilt and shading.  All incentives are base on available funds and verification of installation.

In 2008, you can also receive an income tax credit based on 30% of the cost of your new system, up to $2,000 for a residential install.  There is no cap on a commercial install.  This credit is scheduled to go away in 2009, so if you’re serious, don’t delay.

Michelle Pierce, MVU Program Coordinator, worked with consulting firm EcoMotion to design a straightforward application process.  "We have a seven-step process that is as simple as we could make it.  It starts with a completed Application that will reserve your rebate." 

For more information on this program, see the MVU site by clicking here; and call your HelioPower team based just near by in Murrieta to assist.  We are at Toll Free 87 SOLAR 888