The Covid-19 crisis will transform many of our traditional businesses processes. Although this podcast was recorded before Shelter In Place became a household phrase, Greenlancer‘s outsourcing business model is proof that there are better, faster and safer ways to handle many traditional business processes.
Solar hardware costs — such as solar panels, batteries and mounting equipment — continue to decline. However, non-hardware costs, referred to as “soft costs — such as permitting, labor and overhead — have continued to increase steadily. With equipment costs going down and soft costs going up, there has not been much change in the overall cost of a solar and battery backup system.
As a long time solar contractor, I’m always looking for ways to reduce our costs while still installing top quality systems. I’ve come to the conclusion that there are no magic bullets. Nevertheless, there are a a number of smaller actions that we can take that, in the aggregate, keep costs down for our customers.
Design and engineering costs used to be a huge expense. I once had a room full of 60 engineers and project managers working on projects across the U.S. It was challenging to manage, very expensive, and not particularly responsive to the ups and downs in the solar industry. Now, by outsourcing the electrical design and drafting, I’ve been able to reduce my design and engineering costs by more than half. Moreover, I can turn around engineering projects in a day or two — providing faster installation services for our customers.
I’ve been using Greenlancer’s outsourced solar design and engineering services for almost seven years. We send them the design, pictures, equipment and project details, and in a day or two they send back a comprehensive plan set which we then submit to the local permitting office.
Not only do they reduce our costs and improve our customer service, but Greenlancer’s outsourced business model is also a perfect example of a way to both reduce costs and respect the Shelter In Place requirements. Please listen to The Energy Show to learn more about Greenlancer, the services they provide and how they are reducing solar soft costs for solar installations across the US.
Buildings consume 40% of our energy, most of that for heating and cooling. Almost all of this energy is supplied by fossil fuels, resulting in tremendous CO2 emissions. Building electrification solves this problem. Instead of burning fossil fuels in homes and businesses, we can heat, cool, wash and cook using electricity generated from clean, renewable sources.
San Jose is one of the first cities to establish building codes that pursue a zero net energy policy by strongly recommending all electric new homes. But what about existing homes? To find out first hand what was involved in getting to a zero net energy home, my wife and I embarked on a project to completely electrify our 50 year old home in San Jose.
I’ve done quite of bit of energy upgrading on homes and businesses over the past 40 years. Nevertheless, I checked in with a few friends who had done some electrification of their homes (thanks to Howard, Jeff and Dick). The steps we took mostly followed conventional wisdom: address the easy and cheap items first (LED lights, controls), extra insulation, solar with battery backup, EV charger, heat pump HVAC, heat pump water heater and induction cooktop.
There were only two real hassles with this electrification project. The first hassle is familiar to anyone doing a renovation or maintenance project: finding the “best” contractor for each individual task. Because building electrification involves so many different types of contractors, there is no one “general contractor” who can do everything both efficiently and cost effectively. We ended up with five different contractors: insulation, pool, solar, electrical and HVAC. Since I’m capable of screwing in a lightbulb, I took care of the LEDs lights and controls. The biggest hassle was on the electrical permitting side and coordinating with our local utility. Nevertheless, when everything was done and connected, we are enjoying a net negative (for the year) electric bill — including all of our heating, cooling, cooking and most of our driving.
Perhaps the most rewarding event was when our local gas utility PG&E sent an inspector to our house to find out why the gas meter almost stopped completely! To learn more about electrifying your home or business, please listen to this week’s Energy Show. And if you are thinking about making the switch from fossil fuel home appliances to electrical appliances run by solar and battery storage solutions, take a look at our 10 steps to whole house electrification.
30% of the costs of a solar or battery storage system are paid for with the Solar Investment Tax credit. The Solar Investment Tax Credit (ITC) is the biggest renewable energy incentive in the country, and helps make solar affordable for just about every business or homeowner in the U.S. with a sunny rooftop. The solar ITC has been around for almost ten years – but 2019 is the last year that it is in full effect.
The solar ITC steps down to 26% in 2020, 22% in 2021 and zero for residential systems in 2022. As in year’s past, there will be a big rush to get systems installed before the end of the year – and even a bigger rush at the end of this year since systems will effectively be 4% more expensive on January 1, 2020.
Moreover, California’s public utilities have put their foot on the solar + battery storage accelerator with upcoming Public Safety Power Shutoff announcements. The 30% tax credit fully applies to battery storage systems used for backup power as long as the battery is charged by solar at least 75% of the time. Businesses and homeowners are realizing that a clean, renewable, and quiet solar + battery backup system is more reliable and cost effective than traditional built-in gas and diesel generating systems.
The solar ITC is a straightforward credit (not deduction) on your business or personal tax return, and is not affected by the alternative minimum tax. Other incentives, such as business equipment depreciation, can also be combined with the solar ITC – in many cases cutting the total cost by 50% or more. To learn more about how your home or business can leverage the Solar Investment Tax Credit for both energy and backup power, tune in to this week’s Energy Show.
Studies show that electrifying our transportation and building sectors are the fastest ways to reducing greenhouse gas emissions. These sectors combined generate nearly 70% of total greenhouse gases in many states, including California.
Our country is making excellent progress in the transportation sector as electric vehicles replace conventional gas vehicles – which generate zero emissions when powered by solar- and wind-generated electricity. Since trucks and buses are larger, it will take a few more years before electrification of these vehicles becomes commonplace. Nevertheless, since average vehicles are on the road for about 10 years, it is entirely feasible to completely electrify California’s vehicles in 10 to 20 years. Without national leadership, this transition will take longer in the rest of the country.
25%of green house gas (GHG) emissions come from the building sector – mostly heating, cooling and lighting. When many buildings were constructed they were heated by fossil fuels, most commonly natural gas for both space heating and water heating. With new heat pump technology it is actually cheaper to heat and cool a building with electricity – resulting in zero GHG emissions if this electricity is generated by solar or wind. Other GHG savings measures — such as LED lighting, better windows and insulation, electric ovens, induction cooktops, and better building controls – are also relatively straightforward to implement.
For new construction, it is easy to build these more efficient and cost effective solutions in. But just in the state of California it will take 50+ years for the approximately 12 million existing single family homes 3 million apartments and 700,000 commercial buildings to completely change over to these new technologies.
Unfortunately, we don’t have 50 years to make this transition – more like 10-20 years if we want to prevent global temperatures from rising more than 1.5 degrees C. On the surface, the key barrier to making this transition is the cost for new vehicles and the cost to retrofit existing buildings. New buildings are relatively easy since building electrification is actually cheaper than space and water heating with fossil fuels.
The real barrier to this transition in existing buildings is the stubborn and selfish attitude of incumbent fossil fuel industries. Architects, builders and contractors are happy to install appliances powered by electricity instead of natural gas. But fossil fuel providers, including gas utilities, oppose these electrification efforts at every opportunity. Just consider the extra costs your utility adds to upgrading your electric service and removing your natural gas connection. Please Listen Up to this week’s Energy Show as we discuss solutions to removing these barriers to building electrification.
To slow the global warming trend, a number of states have committed to the aspirational goal of 100% carbon-free energy. As a species that literally evolved from burning wood and hydrocarbons, how can we possibly run our modern lives and economy without fossil fuels?
We can indeed achieve this transition quickly and economically. First, by converting all power generation to renewable, non-carbon sources. And second, by converting all fossil-fuel burning vehicles and appliances to electricity. Steady progress towards these conversions is being made. For example, 32% of California’s retail power came from renewable energy in 2018. The state is well on the way to converting to 100% renewable electricity. Use of EVs is growing steadily, and new building codes mandate the use of rooftop solar and electric appliances instead of natural gas.
The challenge is with the existing stock of residential and commercial buildings. Homes and businesses predominantly use natural gas for space heating, hot water heating and cooking. That’s where the concept of Whole House Electrification come in. Whole House Electrification is conceptually simple: replace gas appliances with electric appliances. In reality, one needs an energy audit to prioritize these conversions, then hire five different specialty contractors to do the work: insulation, solar, HVAC, plumbing, electrical and pool. It can be a daunting task.
Fortunately there are some pioneers out there – one of whom is my friend Howard Wenger. Howard was also a pioneer in the solar industry, with stints at AstroPower, PowerLight and SunPower. Please listen up to this week’s Energy Show as Howard discusses his experiences as he converted his house to 100% electricity, supplied — naturally — by solar.
There is a new electricity provider serving customers in the city of San Jose: San Jose Clean Energy (SJCE). Technically they are not a utility since PG&E still provides distribution services: maintaining local wires and transformers, as well as providing billing. SJCE’s electricity is cleaner (almost all from renewables) and slightly cheaper.
Some people wonder why we need another utility or electricity provider. The reason is simple: investor owned utilities (IOUs) like PG&E charge more for electricity than municipally owned utilities. These new electricity providers, called Community Choice Aggregation (CCA) utilities, are managed by the cities and/or counties they serve, operate with low overheads, and buy power from inexpensive wind and solar farms.
The utility industry is going through a massive transformation. Old fashioned coal, nuclear and gas power plants are more expensive than wind and solar. In fact, business and residential customers can install solar on their rooftops for much less than it costs their local utility to delivery power. Prices for battery storage are dropping, making it cost effective for customers to install a battery system both for time-shifting energy use as well as backup power. As a result of these “behind the meter” electricity technologies, the economics of centrally generated power sold by an investor-owned utility no longer make sense in many locations.
In addition to San Jose Clean Energy, Northern California is already served by CCAs in Marin (Marin Clean Energy), San Mateo (Peninsula Clean Energy), Santa Clara County (Silicon Valley Clean Energy), with about a dozen more CCAs in operation or in formation. To learn more about CCAs and how they are taking off in communities across the U.S., listen up to this week’s Energy Show.
Barry Cinnamon has been blogging about the Solar Industry since 2007.
Barry hosts The Energy Show, a weekly 30 minute talk show that runs every Saturday at 1:30 PM on KDOW Radio AM in San Jose California.
Every week Barry provides practical money-saving tips on ways to reduce your home and business energy consumption.
Barry Cinnamon heads up Cinnamon Energy Systems (a San Jose residential and commercial solar and energy storage contractor) and Spice Solar (suppliers of built-in solar racking technology). After 10,000+ installations at Akeena Solar and Westinghouse Solar, he’s developed a pretty good perspective on the real-world economics of rooftop solar — as well as the best products and services for homeowners, manufacturers and installers. His rooftop tinkering led to the development of integrated racking (released in 2007), AC solar modules (released in 2009), and Spice Solar (the fastest way to install rooftop solar modules).
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