Scott Gordon

Source:  EcoOutfitters.net
Reporter:  Dawn Allcot

Final post in this series on Smart Meters and Solar by EcoOutfitters featuring Scott Gordon, Vice President of  Residential Sales for HelioPower.

In this, the final of our four-part series on smart meters and solar PV arrays (start here), we’re going to address one of three dangers HelioPower CEO Scott Gordon revealed to us about smart meters: How they are infringing on our privacy.

We’re going to assume that no one reading this is doing anything illegal in their homes that they want to hide. But Americans view privacy as one of our basic rights. While the right to privacy is not expressly outlined in the U.S. Constitution, the fourth amendment does guarantee us “privacy of the person and possessions as against unreasonable searches.”

Of course, our founding fathers never could have envisioned digital meters that can record and share every detail of our electric usage. (Mostly because they didn’t envision electricity!) But this is exactly what smart meters do. Why does the electric company want that information? On the surface, the utilities claim that they’re collecting this data in order to make us smarter consumers and conservationists. Armed with the knowledge of when, where, and how we use electricity, we are better able to reduce our usage and lower our electric bills.

In reality, there is a lot more they can do with the information. As Gordon explains: “Every time you use an electrical device, it draws a specific amount of power, different from other devices. The smart meter sees your life and the way you use electricity in 15-minute increments. It can see how many loads of laundry you do each week, when you’re home, when you leave, if you work from home, if you have a pool, how many refrigerators you have … I can literally build a profile of you and your life.”

Laws prohibit the electric company from sharing this information without your permission. But what if they offered you 20 percent off your bill to permit them to share the information with marketing partners? “Many people, in this economy, would take them up on it,” Gordon notes.

If you thought targeted Facebook ads were scary in a sort of “Big Brother is watching” sense, imagine this type of marketing going on across your home, through mail, email, cell phone — any avenue advertisers choose to reach you.

Protect Your Privacy with Solar
When you’re connected to a home solar PV array, your solar system is the only power signature the smart meter can read. All your other devices draw their power from the solar system. “Everything else is literally hiding behind a smokescreen that is your solar system,” Gordon explains.

For years, Gordon said, the driving factor behind installing a solar array has been to save money. “Saving the environment and being eco-conscious is nice, but for the most part, people are concerned about lowering their electric bills.”

Now, smart meters introduce a whole new reason to go solar. For 10 to 16 hours of the day, depending on the time of year, your solar PV array is supporting your right to privacy. (Read more in HelioPower’s 10 Things About Smart Meters and Solar.)

Have questions about the new meter installed on your home?  Do you wonder how it works?  Will it record energy use differently than the “old” version?   Will the new smart meter change your energy bill?

HelioPower's Scott Gordon answers all your questions in this new video, "How to Read Your New Smart Meter."

“While most homeowners are familiar with the installation of smart meters on their homes, many are seeking more information about the smart meters’ impact on their electric bills,” said Scott Gordon, Vice President, Residential Sales for HelioPower.  “We will cover the the things homeowners need to know about smart meters including how to read the meter and how the new digital meters record energy use."

At the October 26 Town Hall for Solar Santa Monica, a crowd of about 60 people listened and asked questions of a panel of solar marketers addressing ways to get solar "with no money down." 

In the marketplace today, "no money down" means via a lease or a Power Purchase Agreement.  Both methods of financing are now being offered for residential systems in Santa Monica.   

The speakers came from Solar Santa Monica's list of Preferred Contractors. In the picture above, from left, they were Scott Gordon (HelioPower/SunRun), Jesse Raynes (SolarCity), and James Brennen (OpenNeighborhoods/ Martifer). 

Naturally, every "deal" is different, but the basics to understand are these:

  ·  With a lease, you pay a fixed monthly "rent" for panels on your roof.The leasing company takes care of maintenance; you get the power. To be eligible, you must have a good credit rating.

 ·   In a PPA, you pay directly for the power your system provides, but at a price that is less than you would pay for power from the utility.  Again, you must qualify, and again you are freed from system maintenance.

  ·    In some cases, you can "pre-pay" – that is, put down an amount at the beginning of the deal – and thus buy down your monthly payment.  (It's like buying power for the next 10 years at today's prices.)

   ·   At the end of the lease or PPA period, typically 20 years, you will have to decide what to do: extend the arrangement, buy the system from the company, or ask that it be removed.  (Not a lot of detail on this, since no leases have yet come to an end.) 

Many questions were raised:  What happens if the property is sold mid-contract?  How is the system sized?  What if the company goes out of business?  Each contractor had slightly different answers, so be sure to compare carefully before you make a decision between a lease or a PPA.  And don't overlook that old standby, direct ownership, if you have the money to invest and want the very best return.

Source: Solar Santa Monica

By Scott Gordon

Vice President, Sales Residential, HelioPower

So, you’re thinking about installing a solar system on your home.  Depending upon where you reside, you may be eligible for state rebates, state tax credits, utility rebates, SRECS (solar renewable energy credits), and even local city cash grants, low interest loans, zero cost permits, and property tax assessment waivers. The incentives are dizzying in their breadth and depth and vary widely from locale to locale across this great nation.  However, regardless of where you live in the United States, anyone installing solar photovoltaics (PV) and/or SDHW (solar domestic hot water) as part of their energy generation mix is eligible to receive the Federal Residential Energy Tax Credit. This blog examines the Residential Energy Tax Credit and how it applies to those seeking to take advantage of it.

If you’ve looked into solar with any conviction, you’ve undoubtedly received bids from solar contractors showing both gross system cost, as well as, net system cost after all available incentives are factored in. The breakdown typically looks something like this, using a representative 5KW system with $1.50/AC watt rebate:

HelioPower solar installation in Corona, CA

Solar PV system gross cost:                               $30,000            

State/Utility Rebate:                                            -$7,500 

Federal Tax Credit:                                              -$6,750

Solar PV system net cost:                          $15,750

This breakdown looks pretty good, doesn’t it?  Heck, the government and utility are paying for 47.5% of your solar system!! But is this true in every case?  Let’s take a closer look.

Chances are that your state/utility rebate is locked in.  Most of the time, your solar contractor will ‘float the rebate.’ This is industry talk for charging you the gross system cost LESS the rebate.  In the above example, your ‘out of pocket’ net cost (used to calculate the Federal Tax Credit) is $22,500.  Thus, we can consider this rebate locked in provided that your contractor calculated it correctly.  Wild variations in rebate amounts between solar contractors should be seen as a red flag warranting further analysis. However, if all of the contractors are showing similar amounts you should feel confident that your rebate is all but assured.

The Federal Residential Energy Tax Credit is another matter entirely.  Before assuming that you qualify for this ‘tax credit,’ you should speak with your tax professional.  Why?  The solar federal tax credit is exactly that: a credit against taxes owed.  In other words, to qualify, you must owe federal taxes.  Let me repeat that: YOU MUST OWE FEDERAL TAXES.  This credit is NOT a line item deduction to lower your tax basis nor is it an automatic refund from the federal government.  If you are not paying taxes to the feds   you cannot take the federal tax credit for solar. Period. This is why it is so important that you have a solid understanding of your tax situation before moving forward with a solar power system.  Unfortunately, many solar contractors make their customers believe that the federal tax credit is a done deal.  It’s not.  Your tax professional will let you know how much tax credit you’re eligible for and how to go about filing for it (more on this later).

Another oft misunderstood element of the federal tax credit is the number of tax years one can roll the credit forward should one not be able to take the entire credit in the first year. For residential customers, you have two years to take advantage of the credit.  If you can’t take it all in the first year, you can roll it forward to the next tax year.  If you have any left over at the end of the second year, you lose it. That’s right: use or lose it. Under current tax code, the credit expires December 31, 2016. This expiration date could have serious implications for those who go solar in 2016 and can’t utilize the entire tax credit in the first year.

I want to cover one last thing before I move on to your options should you not be able to take any or all of the tax credit.  The federal tax credit only applies to solar photovoltaic (electricity producing) and solar domestic hot water (heating water for showers, kitchen, etc). It DOES NOT apply to thermal solar for pool or spa heating.  In fact, very few, if any, incentives exist for pool/spa solar thermal.  I guess the powers that be feel that heating pool water is a luxury unworthy of incentives.  Whether you agree or disagree with this logic, you’ll be hard pressed to find incentives to heat your pool using solar technologies.

So, what if you don’t qualify for the federal tax credit?  The good news is that there are entities that are happy to take the tax credit for you.  The result of this arrangement is that you pay the NetNet  price (line four in the above example). One such entity is SunRun. SunRun provides residential Power Purchase Agreements (PPAs) for photovoltaic solar systems. When customers sign up for SunRun, SunRun takes the rebate and the tax credit right off the top line before calculating either your monthly payment or pre-pay price.  Even better, if one elects the pre-pay option, the final price is discounted an additional 10%.  In our example above, you’d take 10% off line four to arrive at your new ‘out of pocket’ price ($15,750 – 10% = $14,175.90).  Additionally, SunRun provides twenty years of maintenance, monitoring, and warranty for all of their customers.  SunRun can even help those who CAN take the tax credit but would like to take it now rather than wait.  In summary, SunRun not only allows customers who cannot take the credit to take it, but instantly monetizes the tax credit for those who otherwise qualify for the credit but don’t want to wait.  This is also true of the myriad photovoltaic lease products currently available on the residential solar market.

Finally, if you do qualify for the tax credit and elect to take it, you’ll need to let the IRS know of your intent when you file your taxes.  You’ll need to fill out IRS Form 5695 available for download from the IRS’s website: (http://www.irs.gov/pub/irs-pdf/f5695.pdf). Currently only the 2009 version is available.  The 2010 version of IRS Form 5695 should be available shortly for those filing an April 2011 return. This form contains explicit instructions about who qualifies, eligible technologies and improvements, and other general guidelines for claiming your tax credit.

If you’d like to learn more, additional information and FAQs are available on the Solar Electric Industry Association’s’ (SEIA) website: http://seia.org/galleries/pdf/SEIATaxManual_v3-0_FAQ.pdf

In closing, I’d like to reiterate the importance of seeking professional tax advice if you plan on making solar or other energy improvements to your home. This is the only way you can be certain of your eligibility. Options such as SunRun allow one to take advantage of the tax credit even if one doesn’t qualify and can also be a good option for those who do but don’t want to wait to receive the benefit. That last thing you want is to install a solar system only to discover later that you can’t take the tax credit. Be diligent in your examination of the issue.  The Federal Tax Credit is a big piece of the solar energy incentive pie that you definitely want to take advantage of fully.

You can reach Scott Gordon directly at SGordon@HelioPower.com

The Curious Case of the Chocolate Cake Close

Scott Gordon

Vice President, Sales Residential, HelioPower

In the Ugly Side of Solar series I’ve covered shoddy solar power installations, ugly installations, and shaded installations.  Part four covers something more insidious and is perhaps the ugliest side of all. Part four is about the growing trend of less than professional sales tactics in the solar power industry.

“Sales Tactics” details a disturbing recent trend, the employ of unprofessional, and what I would deem, unscrupulous, sales and business practices. You know the kind I mean. You’ve seen the results of this approach to business on the 10 o’clock news.  The headlines paint the stories:  the contractor who takes a huge deposit and doesn’t complete the work; and/or does a horrible job after a protracted and nightmarish experience, and/or charges the customer twice as much as a reputable contractor to perform the same job in the name of ‘superior service’ or some other excuse while performing a less than stellar installation.

Ugly Solar part four is an exposé of some of the oldest and most popular tricks in home selling tactics now being applied to solar. Before you say, “I’m too smart to fall for any of those tricks,” please read on.  Sadly I see and hear of people falling for these tricks every day as some new entrants into the industry bring them to the solar business. These tactics are used to endear and close deals at prices significantly higher than those offered in the competitive marketplace and to intimidate those who try to cancel later.

I will illustrate how these tricks work through a parable I call ‘The Curious Case of the Chocolate Cake Close.’

Once there was a pleasant retired couple who wished to go solar. It’s possible that they became interested in solar after receiving a direct mailer or perhaps speaking with a door-to-door canvasser. However it happened, they invited a solar contractor into their home. The salesman was pleasant. He took photos with their dog (Trick #1: Make friends with the family dog. If the dog trusts you, the deal’s as good as inked). The salesman pitched his pitch. He told the couple he had already contacted the utility and received their utility information and therefore the system he was proposing would suit their needs perfectly (Trick #2: Without a signed third party authorization form, no one except the customer can access his utility information, but most folks are unaware of this and will think you have an ‘in’ at the utility). The salesman completed his exciting solar pitch and then pressed for the sale. Unfortunately for the salesman, the couple wanted some more time to think about it, so he created more time. He stuck around for the next five hours endearing himself to them (Trick #3: If you refuse to leave on your own, customers will often acquiesce and sign a contract just to get you out of their house. Stay ten hours if you have to).

Throughout the five hour courtship, the salesman made multiple phone calls to his manager. “Good news!” the salesman exclaimed, “If you let us put a sign in your yard my manager will knock $1,500 off your solar power system!” “Even more good news, if you sign today we can give you an additional discount!”(Trick #4: The more phony calls you make to your manager the better. It gives you the appearance of advocating on behalf of the customer. Trick #5: hyper-inflated pricing makes discounting easy!).  Feeling the deal (and his commission) slipping away, the salesman tried a Hail Mary. “What’s your favorite dessert?” he asked. “We love chocolate cake,” the couple replied. “Great! I’ll be right back,” the salesman announced, and much to the couple’s surprise, the salesman went to the store and bought a chocolate cake. “What a nice man,” the couple thought, “he sure is a thoughtful fellow.”

The salesman returned a short while later with a chocolate cake (Trick #6: never underestimate the endearment forged by breaking bread with someone). After enjoying some of the cake with the old couple, the salesman inked the deal and went on his way with a $1,000 deposit and a $2,500 postdated progress payment (Trick #7: the more skin someone has in the game, the less likely they are to cancel after they’ve come to their senses. Of course, as you may know, in California collection of this second payment at the time of contract signing is illegal. Don’t let that stop you though, just have your customer postdate the check to cover your tracks).

That would’ve been the end of the story in most cases (slick salesman gouges unwitting retirees), but this couple began to have buyer’s remorse after the transaction begin to sink in. Because they never received a second bid, they wondered if they had gotten a good deal on their solar electric system. After several weeks of wondering, pondering, and evaluating their decision to go solar with the chocolate cake salesman, they decided to get a second opinion. What they discovered shocked them.

The second salesman arrived with little fanfare and no chocolate cake. He performed his site evaluation and presented his solar power system proposal to the couple. The system was larger (by almost 1,000 watts); included an electrical service upgrade; and was $29,000 cheaper. Let me say that again, the system was $29,000 cheaper. For many people, that’s a year’s salary.

They’d been had! How could that sweet salesman with his delicious chocolate cake do this to them? They trusted him. Their dog trusted him. At this point, the old woman began to cry. She and her husband were so upset that they immediately canceled their contract with the first salesman and signed up for the far cheaper system with the second salesman.

Almost immediately, the first salesman began calling them at home in earnest saying, “I’ll see you in court! You’re on the hook for a 20% restocking fee! Do you really want to lose $8,000? You’re in for a nasty lawsuit now!” (Trick #8: there’s nothing like the threat of a lawsuit to get folks to see things your way). After rebuffing the chocolate cake salesman by phone multiple times, the couple thought they were free and clear, but they were wrong! Mr. Chocolate Cake himself came a knock, knock, knockin’ at their front door not 30 minutes later (Trick #9: if the threat of a lawsuit doesn’t work by phone, try it in person). The couple, visibly shaken and physically shaking, asked the second salesman, who was still at the house, to confront chocolate cake guy who suddenly wasn’t so sweet anymore. After an unpleasant and highly charged exchange, chocolate cake guy was sent packin’. Salesman number two, believing he had done a good thing by saving these retirees $29,000 on a 25% bigger solar panel system went on his way with contract in hand. Plus, he had the added privilege of singlehandedly dispatching the evil sales guy face-to-face, toe-to-toe.

Unfortunately though, no good deed goes unpunished as they say. Within 36 hours, the old couple canceled their contract with the second salesman. Why? The threats of lawsuits had intensified over the ensuing (pun intended) hours. Additionally, the first company offered to match the second company’s price. That’s right. Miraculously, Company A found $29,000 of ‘extra money’ in the job after the couple received a second bid and attempted to cancel (Trick #10: If all else fails, match the competitor’s price and offer to drop the lawsuit if the customer agrees to cease all communication with Company B).

Company B, now well aware of the underhanded sales techniques being plied on the couple, calls the couple one last time to try to talk sense to them. “After what you’ve been through: price gouging; slimy sales tactics; and threat of lawsuit would you recommend Company A to your friends, neighbors, or family?”

“No we wouldn’t,” the couple answers.

“If you wouldn’t recommend them,” salesman B continues, “why would you still proceed with them while you still have a chance to get out in one piece?”

“We wouldn’t,” the couple replies, “But we’ve never been to court before, and we’re afraid of being sued.”

“Their legal case seems frivolous to me,” says salesman B, “Don’t let them strong arm you into doing something you don’t want to do. Is this someone you really want to do business with?”

With one last futile effort, the couple cancels with Company A, but this time the cancelation lasts only 18 hours, as chocolate cake guy arrived in person the very next morning to defend the deal with his volatile combo of price reductions and lawsuits (Trick #11: Intimidation is a wonderful customer motivator).

I wish I could say that this parable was only that, but it’s a true story based on actual events. In fact, further research on Company A uncovered a consistent pattern of price gouging and abuse. Prices averaging $13/DC watt are the norm for these slick operators. Since the average price of solar in California has fallen below $7/DC watt, Company A’s systems are overpriced by an average of 55%. In the retirees’ example, the difference was $29,000. That’s some expensive chocolate cake!

So how do you protect yourself from being suckered, then threatened and abused when you call the conman on his con? Follow basic common sense principles:

1. Always get a second bid. Always, always, always!
2. If you live in California check the solar company out the same way I did, in CSI’s public database: http://www.californiasolarstatistics.ca.gov/application/search/
   You can see how many installations a company’s done, in which cities, what types of equipment they sell, and even the prices they’re charging, plus a whole lot more!
3. If you’re paying more than $7/DC watt, chances are you’ve been had, although some exceptions apply to ground mounted systems, reroofs, service upgrades, or specialized custom installation work. In any case, start asking some hard questions when the price exceeds this level.
4. Remember, in California you have three business days to cancel a contract if you get cold feet later. If you sign on Friday, you have until the following Wednesday at midnight.
5. If a contractor collects more than $1,000 at contract signing, report them to the California State Licensing Board: www.cslb.ca.gov
6. If a contractor threatens you with a lawsuit and you’ve done nothing but cancel your contract prior to work commencing, don’t capitulate — call a lawyer!
7. If a contractor suddenly drops his price by tens of thousands of dollars to keep your business, can this guy really be trusted to do quality work? Can he be trusted at all?
8. If a salesman offers you chocolate cake, offer him the door.

If there is a silver lining here, it’s that the couple saved a pile of money in the end by engaging Company B. Whether they’ll end up getting what they paid for we may never know. I’m sure the chocolate cake salesman still has a couple more tricks up his sleeve. What’s your favorite dessert?

You can reach Scott Gordon directly at SGordon@HelioPower.com

By Scott Gordon

Vice President, Residential Sales, HelioPower

Recently I’ve been hearing a lot about San Diego’s Property Assessed Clean Energy (PACE) program both from customers and from solar companies advertising on KPBS. I find this curious as most of the important details (including exactly when this program will roll out, how much money will be available, and whether you’ll need to do extensive efficiency retrofits before qualifying for solar) are fuzzy at best, so before we delve into all that we don’t know, let’s cover the one thing we do know: we know that CCSE will administer the program. Otherwise, it’s anyone’s guess what’s really going on. A recent visit to CCSE’s website simply resulted in a 50,000 foot view of what PACE is and how CCSE will administer it. Search Google and most of the results herald back to the middle of 2009. As a result, all we are left with is rumor and innuendo. So this begs the question, Is PACE in San Diego worth waiting for?

An examination of other PACE (or AB 811 programs) sheds some light on what we can expect when and if PACE San Diego ever comes to fruition. While AB 811 has helped several cities speed the adoption of solar, most (with the exception of Sonoma) have experienced boom and bust cycles in financing. In many cities, allotted AB 811 money is gone within hours of the first application being submitted. The result is long waiting lists of people hoping that sooner or later additional funds will be available to fund their systems with demand always outstripping supply (of money) by an order of

Solar in San Diego installed by HelioPower

magnitude. For those forced to wait for the next round of financing, there are a real costs involved:  the cost of paying your electric bill, the cost of missing a rebate tier, and the cost of potentially delaying your tax credit by a year.

Let’s examine the positives of PACE financing. PACE requires no credit check or and has a liberal loan to value requirement (you must not owe more on your home than it’s worth). Thus, anyone who is current on their property taxes is eligible. If you have bad credit or have a high LTV, PACE can be a great vehicle for financing energy efficiency improvements. The PACE loan is secured against the property as a first position tax lien. Thus, the property owner repays the PACE loan bi-annually when he pays his property taxes. Interest rates on PACE loans average 7-8% simple interest, which isn’t so terrible if your credit is less than stellar or don’t qualify for alternative financing. Additionally, if you sell your home, the loan stays with the property and is assumed by the buyer.

Now let’s examine the negatives. First, if you are credit worthy, you can generally finance your solar system for 5-6% through a conventional bank or for as little as 3.1% through a PPA such as SunRun. Shaving 400 to 500 basis points off your loan can save you BIG money over the life of the system. Next, PACE money is used up quickly. In other words, if you’re not one of the first in line, chances are the program will exhaust its funds long before your application is reviewed. As a result, you’ll continue to pay high electricity rates while you wait for the next round of funding. Third, you have to pay the loan back as a tax assessment, so you’ll need to be prepared to write a larger check to the tax man bi-annually and budget appropriately.

While I believe that PACE financing in San Diego can be great for certain customers, customers with good credit and home equity are eligible for superior financing with far better terms and faster returns. If you’re considering solar for your home, you’d be well advised to examine all of your available finance options before assuming PACE is the best option for you. You should also consider the cost of waiting in your calculus. It’s possible other financing options will cost you less over the long run, help you be cash flow positive sooner, and provide you with smaller more manageable monthly (rather than bi-annually) payments. Either way you decide to go, HelioPower is here to help you secure the most beneficial financing for your solar project and can help you determine the best path for your unique situation.

Contact Scott Gordon at SGordon@HelioPower.com.

NBC affiliate Cox Media reporter Diana Guevara caught up with HelioPower's Scott Gordon and solar power client Robert Schmalz in Oceanside for her solar piece Monday, January 25.  Schmalz, a HelioPower client who went solar just recently through the solar San Diego 1BOG program, talks about solar as a smart investment: