tag:blogger.com,1999:blog-68397999517436669822024-03-21T16:50:59.000-07:00Bruce Karney's Solar Blog<a href="mailto:bkarney@aol.com?Subject=Solar%20Buyers%20Group%20Question">Bruce Karney's</a> solar blog.<p><p>
Your resource for information on community solar purchasing programs and a multitude of other solar PV topics.</p></p><a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.comBlogger73125tag:blogger.com,1999:blog-6839799951743666982.post-33837661733908854202012-06-12T16:17:00.000-07:002012-06-12T16:29:14.173-07:00How to fund solar for churches and non-profitsI was invited to make a 5 minute presentation at the SunShot Global Summit in Denver on June 14, 2012. I sent a PowerPoint presentation with embedded audio. The narrative that goes with the PowerPoint is pasted below. I've posted the <a href="http://slidesha.re/LLTnrY">PowerPoint</a> (without audio) on SlideShare.
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[Title Slide]
Good afternoon, everyone. My name is Bruce Karney and I'd like share an idea that I began working on 3 years ago at SolarCity.
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At that time SolarCity was best known for its community-wide solar discount programs. As Community Program Manager, I met several individuals who were looking for an affordable way to get PV systems for their church or favorite non-profit agency.
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[Slide 2 - Photographs]
By the way, throughout this talk I'll use the abbreviation CNP to mean church or non-profit.
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I was impressed by their passion, and worked with them to find a financial structure that would meet their needs. Some groups wanted to lend money to the CNP and be repaid by the electricity savings. Others wanted to form a partnership to own the system and to capture the tax and depreciation benefits.
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But as we examined the cash flows and tax laws, we could not find a viable investment model. Just as with residential solar in the days before PPAs and leases, only the wealthy or truly environmentally committed CNPs ended up installing solar, and they did not benefit from any tax incentives.
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[Slide 3 – Current Situation]
The core issue, of course, is that Federal solar incentives are tax incentives, so CNPs pay at least 30% more for solar than for-profit businesses do.
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The large-scale investors that fund residential and commercial PPAs have avoided the CNP segment due to low profitability and perceived risk. There is a lot of overhead involved in each and every PPA. Most CNPs need systems that are too small for commercial PPAs to pencil out. The financial stability of CNPs is another barrier. CNPs don't have credit scores. Despite the fact that many have long histories of financial stability, disinterested third party financiers do not find their risk profiles appealing.
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That being said, there are a huge number of churches and non-profits. With one simple change to federal tax law, I think it is possible to get 10% of them to go solar in the next 4 years.
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[Slide 4 – Proposed Change in Tax Law]
Since 1986, US law has only allowed losses from passive investments, such as real estate partnerships, to offset passive income. Passive losses cannot be used to offset active income, such as wages. Before 1986, passive losses could offset an unlimited amount of active income, but this was deemed to be an abusive tax sheltering strategy. Interestingly, and as a partial precedent for my proposal, a $25,000/year exception was carved out for low and middle-income taxpayers with passive losses.
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I propose adding another limited exception for passive losses of up to $50,000 per year for solar systems owned individually or through a partnership. This exemption would only apply if the system is installed at a church or non-profit and placed in service between 2013 and 2016. Active participation in the management of the system would not be required for the investors to qualify for this exception. As tax changes go, this is truly a modest proposal. It is limited in amount, duration, and scope. It is not targeted at any special group of Americans. It is an opportunity available to any American taxpayer.
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To unleash the expected tsunami of solar deployment, it would also be necessary to have standard legal documents for partnerships and PPAs, and simple software tools for partnership administration. These could easily be open-sourced and made available at very low cost.
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[Slide 5 – Expected Results]
I predict that this simple change could lead to the installation of 100,000 small solar systems in the next 4 years, averaging 20 kilowatts, but totaling 2 gigawatts.
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While some people will invest six-figure amounts, the vast majority of investments will be just a few thousand dollars. Someone who invests four thousand dollars for 5% ownership of a 20 kilowatt system would get a $1200 tax credit and the modest amounts shown on the slide as passive depreciation losses in the first three years.
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One very important attribute of the kind of investors who would support solar for their CNP is that their required hurdle rate is exceedingly low. Potential CNP investors have always told me that they just want to break even or earn a very small return. Instead of looking for 10% after-tax returns like Wall Street investors, they would be happy with 2%.
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[Slide 6 – Conclusion]
In closing, let me focus on political viability. This idea has bipartisan appeal. It will create tens of thousands of jobs, yet all of the funding is from voluntary investments of private capital.
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Republicans will like that it will help American solar installers, which are usually small local businesses.
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Democrats will like the rapid scalability, the environmental benefits, and the creation of 2 million new solar advocates.
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I believe that the current Congress would approve this tax law change.
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Please join me in urging it to do so.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com1tag:blogger.com,1999:blog-6839799951743666982.post-67044071974140088562011-06-10T09:13:00.000-07:002011-06-10T09:20:29.698-07:00Excess solar generation worth only 4 cents/kwh?After nearly 2 years of regulatory studies and hearings the Public Utility Commission ruled yesterday that solar system owners who produce more kWh than they consume will be paid about 4 cents/kWh for their "excess generation." Full details are in <a href="http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2011/06/09/BUJV1JRUD9.DTL">this article</a> by SFGate writer David Baker.<br /><br />This is a very disappointing result.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-13772922024593638482010-08-24T18:38:00.000-07:002010-09-02T02:37:03.075-07:00Ice-free Northwest PassageHere's an image that depresses me. (Source: http://nsidc.org/arcticseaicenews/ )<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi4ZAkS2GG6KXqyWoaJqnNlQkOyH-jyODLh5kfU7Ak2QQHlLiY9ca1bS7vbLldq-SeGZ_x1qiWgiVCJGc07vBowCm_wTpLWcDDkna36Al13p4-dZU7yW5DtGmyJQB0HS_02d6KNZFpceY/s1600/sea-ice+copy.jpg"><img style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;width: 440px; height: 270px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgi4ZAkS2GG6KXqyWoaJqnNlQkOyH-jyODLh5kfU7Ak2QQHlLiY9ca1bS7vbLldq-SeGZ_x1qiWgiVCJGc07vBowCm_wTpLWcDDkna36Al13p4-dZU7yW5DtGmyJQB0HS_02d6KNZFpceY/s400/sea-ice+copy.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5509156213405317138" /></a><p><br /><br />As the Arctic warms, less ice remains throughout the summer. This year, it appears that the Northwest Passage may be completely ice free by mid-September. The fewer months of ice cover, the more solar energy the Arctic Ocean will absorb and the more likely it is that subsequent summers will be even more ice-free. This is just one of the positive (amplifying) feedback loops that makes climate change a serious threat to ecosystems in many parts of the world.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-17104507985772480662010-06-22T20:10:00.000-07:002010-08-23T16:05:11.845-07:008 Cents/kWh for Extra ProductionPG&E filed a document with the CPUC today that suggests it feels 8 cents/kWh is a fair price for "overproduction" by solar system owners. The final determination of the price utilities will pay will be made by the CPUC within the next 2-3 months.<br /><br />Overproduction occurs when, over the course of a year, the solar system produces more kilowatt hours (kWh) than the home uses. This is not the same as simply driving the electricity bill below zero. For example, we are on a Time of Use rate plan and our bill is zero even though our PV system only produces about 70% as many kWh as we use. We produce a lot of high-value "on peak" kWh and use a lot of low-value "off-peak" kWh.<br /><br />Up until now, PV system owners have received no compensation for overproduction. The energy, and its value, have been donated to the utility. (This is true in all utilities in CA that I am aware of, not just PG&E territory.)<br /><br />The bill that caused this policy change is AB 920 "The California Solar Surplus Act" from the 2009 Legislative session. Thanks to Jared Huffman for introducing AB 920!<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-52430887290427394672010-05-04T20:00:00.000-07:002010-05-04T20:06:31.352-07:00Solar is HOT in CaliforniaThe residential and commercial solar markets are smoking hot in California this Spring. As you may know, State incentives decline whenever sales of solar PV systems reach certain trigger points. There are separate incentive programs for residential and non-residential systems purchased in each of the state's 3 investor-owned utility territories: PG&E, SDG&E and SCE.<br /><br />Between March 26 and April 26 all six of these programs reached the end of an incentive step and lowered their rebates. This was caused by a huge surge of demand, most of which occurred the six weeks after Valentine's Day. The solar market usually pauses to catch its breath after rebate drops, but it also traditionally has its strongest selling season from June to August. I predict that the strength we've seen recently will continue and that at least 4 of the 6 programs will record another rebate drop by the end of 2010.<br /><br />You can keep track of California rebate levels and reservation levels here: http://www.csi-trigger.com/<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-45995711897649702732010-05-04T19:38:00.000-07:002010-08-23T16:07:54.047-07:00PG&E's Rate Reduction RequestIn March, 2010, PG&E filed its General Rate Case with the California Public Utility Commission (CPUC). In it, it asked for significant reductions in its top residential rates on June 1. PG&E requested permission to merge Tiers 3, 4 and 5 into a single tier and charge $.298/kWh. The graph shows 4 years of history, including the proposed reduction (which the CPUC has not yet ruled on.</p><br /><br /><B>Update</B></p><br />The CPUC allowed PG&E to merge Tiers 4 and 5 and price them both at $.40/kWh. Tier 3 is priced at $.29/kWh.</p><br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEho3BAo_wKgPaI_I1ZExX7RsMxNeB8eOOJYl-6Z_PXszBnFp1bYuJ2Mi6HsxRdrxr6g3291PfzebOzo8DI_8xPQ6mPZjuQImkXSrc97RMUuzsH2mVrDBKncPihPCmx1zpOXcuo3vn1CN18/s1600/PG&E.JPG"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 206px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEho3BAo_wKgPaI_I1ZExX7RsMxNeB8eOOJYl-6Z_PXszBnFp1bYuJ2Mi6HsxRdrxr6g3291PfzebOzo8DI_8xPQ6mPZjuQImkXSrc97RMUuzsH2mVrDBKncPihPCmx1zpOXcuo3vn1CN18/s400/PG&E.JPG" border="0" alt=""id="BLOGGER_PHOTO_ID_5467612638320520130" /></a></p><br /><br />There are many ways to look at this proposal, and I take a relatively optimistic view of the effect it would have on the solar industry if it were adopted. It's certainly true that the proposed rates would take a lot of financial pressure off homeowners with very large electric bills. The amount they could save by adding a PV system would fall dramatically. But, in my experience, it's not actually people with a $800/month electric bill who are driving the residential solar market. It's people with bills in the $200-$350 range, and the proposed rates would create a lot more ratepayers like this.<br /><br />If you look back at 2001 when the 5 tier scheme was first adopted, the ratio between the highest priced kWh and the lowest was 3:1. Today it is 4.5:1. Under PG&E's proposal it would go 2.6:1. This is still a steeply tiered rate structure. I can't easily imagine people wasting electricity because it costs only $.30/kWh instead of $.50.<br /><br />My top reason for feeling OK about the proposal is that the proposed rates are very similar to what is charged by San Diego Gas and Electric, and that part of the state has adopted solar at an even faster rate than PG&E customers over the last year.<br /><br />The CPUC will probably rule on PG&E's request in very late May. When they do, I'll update this posting.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com1tag:blogger.com,1999:blog-6839799951743666982.post-4589590011651806072010-03-11T20:01:00.000-08:002010-05-04T19:35:49.399-07:00"Solar for All" is no moreIn April 2009 I contacted my local Assemblyman, Paul Fong, and asked him to make it possible for renters, condo owners, and others to lease solar panels located on solar farms and offset all or part of their electric usage via remote net metering. Essentially, this would give every residential electric customer in the state the same access to leased solar that homeowners have enjoyed for the last 2 years.<br /> <br />In February, 2010 Mr. Fong introduced my bill (AB 1947). I had high hopes for the bill, but it was completely gutted and amended to serve an entirely different purpose. It is now a bill that will benefit only a few rate payers in the Sacramento Municipal Utility District area.<br /><br />Thanks to everyone who supported Solar for All in its original form. It may be possible to reintroduce it in 2011 with a better outcome.<br /> <br />Cheers,<br />Bruce<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com2tag:blogger.com,1999:blog-6839799951743666982.post-33257787423299656132010-01-21T19:17:00.000-08:002010-01-21T19:23:01.198-08:00PG&E Asks for 8.6% Rate Increase in 2011My January PG&E Bill included an insert summarizing rate increases requested in the company's "2011 General Rate Case Application Filing A.09-12.020"<br /><br />These inserts often go straight to the recycling bin unread, but I took the time to scan this one. PG&E is proposing an 8.6% rate increase on Jan. 1, 2011 for residential service. The increase will be smaller for low-usage customers and larger high-usage customers. As they put it:<br /><br />"A typical ... residential customer using 550 kWh per month would increase $2.37 or 3.2%, from $74.13 to $76.50. The bill for a typical residential customer using 850 kWh per month would increase by $17.44, or 10.6%, from $164.15 to $181.59"<br /><br />Proposed increases for commercial customers range from 5.8-7.6%.<br /><br />Time to go solar!<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-78215195752257373962010-01-02T14:08:00.000-08:002010-01-02T14:18:35.698-08:00Pacific Gas and Electric's Jan. 1 Rate IncreasePG&E raised its residential electric rates again on Jan. 1, 2010 by 3% for the most frugal users and 7% for heavy consumers. This was the 6th rate increase in the last 3 years. There have also been 4 rate decreases, but the increases tend to be large and the decreases are usually quite small.<br /><br />Because rate increases have been tilted toward the ratepayers who use the most electricity, the compound average annual growth in rates over the last 3 years depends greatly on which of the 5 "tiers" you are in. Here are the average annual price increases by Tier from Jan. 1, 2007 to Jan. 1, 2010:<br /><br />Tier 1 1.4%<br />Tier 2 1.3%<br />Tier 3 6.4%<br />Tier 4 8.1%<br />Tier 5 8.6%<br /><br />Tier 5 energy now costs $.474 per kilowatt hour, significantly higher than the UNSUBSIDIZED cost of residential solar energy about double the cost after taking tax credits and the state rebate into account<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-19289211633482388002009-11-02T14:01:00.000-08:002010-01-02T14:06:52.293-08:00Stanford Journalism Student InterviewStacie Chan, a Stanford graduate student in Journalism, recently interviewed me for a school project. The <a href="http://siliconvalleypulse.serramedia.com/content/solarman-0">article she wrote</a> was posted to the Journalism school's web site. It's always interesting "to see how others see you," as Robert Burns wrote, and Stacie's article gives me that chance.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-71635859980864993122009-06-20T13:48:00.000-07:002009-06-20T13:53:14.702-07:00I'll be Presenting "Solar for All" on July 8I will be presenting my "Solar for All proposal" to a large audience for the first time on July 8, 2009 from 7-8 PM. The event is part of the Silicon Valley Photovoltaic Society (SVPVS) speaker series.<br /><br />Location: the G. E. Pake Auditorium at Palo Alto Research Center (PARC, formerly Xerox PARC), 3333 Coyote Hill Road, Palo Alto, CA 94304<br /><br />I hope any of my readers who are in the area will attend.<br /><br />The 8-page Word document describing "Solar For All" is online <a href="http://groups.yahoo.com/group/mvsolar/files/">here.</a><a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-47059373624543652852009-05-21T17:20:00.000-07:002009-09-03T21:11:11.676-07:00How Much Does a Solar System Increase the Value of a Home?Many solar companies cite an article from 1998 when they tell you how much solar will increase the value of your home. The reference is <span style="font-style:italic;">The Appraisal Journal</span>: <a href="http://www.icfi.com/Markets/Community_Development/doc_files/apj1098.pdf">http://www.icfi.com/Markets/Community_Development/doc_files/apj1098.pdf</a><br /><br />You may wonder why companies cite this 11 year old article rather than something more current. The basic answer is that solar companies like the result that the author of the article derived. (They won't point out that the article was actually about energy-efficient homes, not homes with solar systems.) Solar companies will typically say "The value of your home goes up by $20 for every $1 of annual energy production by your solar system." Many solar companies use this formula to tell potential buyers that the solar system will increase their home's value by far more than the system's price.<br /><br />This defies all logic. Let's illustrate this with an example.<br /><br />Suppose there are two identical homes on a street in Anytown, USA. Each has a fair market value of $500,000. One homeowner purchases a solar system for $18,000. He is told by the solar company that the system will reduce the home's annual energy bill by $1,800. So far, so good. But then the solar company says, citing the Appraisal Journal article, that the solar system will increase the value of the home by $36,000 (i.e., 20 x $1,800). The other homeowner does not buy a solar PV system.<br /><br />Let's further suppose that the day after the solar system is turned on, both homeowners put their houses on the market. The non-solar homeowner prices his at $500,000 and the solar homeowner lists hers for $536,000. Dozens of buyers come and look at each home. Some want to live in a solar home and some don't. If those who want to live in a solar home (or their real estate agents) perform any amount of due dilligence, they will quickly learn that they can buy the non-solar home for $500,000 and spend $18,000 to add solar to it. Therefore, it would be foolish for them to pay an $18,000 premium for the solar home because this far exceeds the cost of adding solar to the non-solar home.<br /><br />Furthermore, it is generally expected that brand new solar systems will cost less with each passing year. If that is the case, then the value of an installed (used) solar system will decline each year simply because the cost of an equivalent new system will be less each year. In addition, solar systems have a finite useful life in the range of 20-40 years. Let's say that 30 years is the appropriate useful life. If we want to know what a used solar system will be worth in 5 years, we have to estimate the price of a NEW system five year from now and then reduce the value of the USED system by 5/30ths to account for the fact that the system we purchased in 2009 has used up 5/30ths of its useful life.<br /><br />Under the theory espoused in <span style="font-style:italic;">The Appraisal Journal</span> article, the difference in value between the solar home and the non-solar home will increase year after year if the price of energy rises over time. This produces the nonsensical result of predicting that the solar system has the greatest market value in its final year as a functioning piece of apparatus! That's just plain nuts!<br /><br />In reality, if solar equipment prices stay constant or decline in the future, the market value of a solar system is highest on the day it is installed and will decline gradually until it reaches zero when the equipment reaches the end of its useful life. This is exactly the kind of reduction in value over time that we would expect from any long-lived asset whose value is based on its practical utility rather than fashion or trendiness, such as an automobile.<br /><br />Beware of any solar company that tells you that a solar system will increase the value of your home by more than the system's initial net cost. They either have not thought very deeply about the subject or they are trying to manipulate you. Why would you want to spend your hard-earned dollars with a company for which either of those statements is true?<br /><br />If you'd like a copy of a spreadsheet that supports the arguments in this posting, send me a note at bkarney [at] comcast [dot] net.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com3tag:blogger.com,1999:blog-6839799951743666982.post-41221922763355922122009-05-18T16:15:00.000-07:002009-06-20T13:52:47.041-07:00Solar for All -- Including RentersI've recently developed a proposal that I call "Solar for All." It would make it possible for condo owners and renters to own or lease solar PV just as homeowners can.<br /><br />On May 8 I met with <span style="font-weight: bold;">Assemblyman Paul Fong</span> and <span style="font-weight: bold;">Monica Smith</span> from his staff last week and they both seemed quite interested.<br /><br />I would greatly appreciate feedback on my proposal. The 8-page Word document describing "Solar For All" is online <a href="http://groups.yahoo.com/group/mvsolar/files/">here.</a><br /><br />In a nutshell, the idea is to use "virtual net metering" to allow the solar panels to be located on a solar farm rather than on the building where the energy is used. However, the solar farm is not owned by your local utility company: the panels are owned by a for-profit company and leased to the family whose bill is being offset.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-13350126378229511032009-05-16T10:47:00.000-07:002009-05-16T10:54:55.921-07:00Rinsing Panels Isn't Enough, It Seems<style type="text/css"> BODY,.aolmailheader {font-size:10pt; color:black; font-family:Arial;} a.aolmailheader:link {color:blue; text-decoration:underline; font-weight:normal;} a.aolmailheader:visited {color:magenta; text-decoration:underline; font-weight:normal;} a.aolmailheader:active {color:blue; text-decoration:underline; font-weight:normal;} a.aolmailheader:hover {color:blue; text-decoration:underline; font-weight:normal;} </style>This week was the 2nd anniversary of my solar system being online. Though I've rinsed off my panels every 6-8 weeks, I noticed that production was dropping. In Year 1 the system generated 3029 kWh and in Year 2 only 2796. That's a 7.7% difference.<br /><br />On Thursday I cleaned my panels using dishwashing liquid in warm water. I used a 12' pole and window washing pad (sort of like a mop) so I could do this from a 5' step ladder without climbing on the roof. After washing each panel the pad was black, and the water in the bucket quickly turned black as well. Those panels were DIRTY, despite having been rinsed off more frequently than most solar vendors say you need to. (By the way, my roof is pitched at about 20 degrees, which is pretty normal for this area.) The whole job took about 30 minutes for my 12 panel system.<br /><br />My SolarGuard monitoring reported an 8% increase in output on Friday. Weather was nearly identical (and perfect) on both days, so I think the entire amount of increase was due to the washing, not weather or temperature.<br /><br />If I can maintain this enhanced production, it will generate about $50-70/year in extra energy.<br /><br />You can buy the pole and pad at a home improvement store for about $40 and it will pay for itself in less than a year.<br /><br /><a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOjPmsW_g_GjutbusX-4IHZWPBS-N44anITScA4-W4t7zX4R48_R4DngCNvV74jOF11a1rI3ku2oqs3MAyZTCXLqOrZoNnkN5tzvOl9fkVN_EDPQl_K7A_BUZUxQCZPYZjEK4c9iHXZD8/s1600-h/BeforeAfter.bmp"><img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 400px; height: 354px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOjPmsW_g_GjutbusX-4IHZWPBS-N44anITScA4-W4t7zX4R48_R4DngCNvV74jOF11a1rI3ku2oqs3MAyZTCXLqOrZoNnkN5tzvOl9fkVN_EDPQl_K7A_BUZUxQCZPYZjEK4c9iHXZD8/s400/BeforeAfter.bmp" alt="" id="BLOGGER_PHOTO_ID_5336481388143557202" border="0" /></a><a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com1tag:blogger.com,1999:blog-6839799951743666982.post-5198613003209001962009-04-22T10:43:00.000-07:002009-04-22T10:59:04.469-07:00"Green Energy" Programs Gaining TractionThe National Renewable Energy Laboratory (NREL) at the Department of Energy (DOE) has released a new report on the success of various "green energy" programs around the country. The URL is <a href="http://www.nrel.gov/news/press/2009/679.html">http://www.nrel.gov/news/press/2009/679.html</a><br /><br />Green energy programs typically charge ratepayers a slight premium for electricity that is certified as being 80% or 100% derived from non-greenhouse gas producing sources. Usually these are wind energy programs, but some include solar, geothermal, and biofuel sources of generation.<br /><br /><ul><li>Austin, TX leads the category for "most green energy" with 724 million kilowatt hours/year.</li><li>Palo Alto, CA leads the "highest participation" ranking with 21% of residential consumers participating.</li><li>Exel Energy in Colorado and Minnesota has the most total participants: 71,571, but is followed closely by two Oregon electricity providers: Portland General Electric and Pacificorp with 69,258 and 67,252 participating accounts respectively.</li><li>Edmond, OK leads in terms of percent of total load sold to residential participants at 6.4%.</li></ul><br />It's interesting to note that the 3 cities listed above are all homes to major universities: University of Texas, Stanford University, and the University of Central Oklahoma (the 3rd largest university in Oklahoma).<br /><br />Green power typically costs about 1-2 cents/kwh more than non-green, but in 2008 due to spikes in the price of fossil fuels, green power actually cost 1 cent/kwh <strong>less</strong> for customers of Edmond Electric and OG&E Electric Services.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-34118696038693153552009-04-21T10:09:00.000-07:002009-04-21T10:22:07.035-07:00Roadmap for Pricing Greenhouse Gasses in CaliforniaAt yesterday's SolarTech meeting I heard a presentation by Sue Kateley of CalSEIA about possible expansion of Feed-in Tariffs (FIT) in California.<br /><br />One proposal currently on the table calls for explicitly pricing the greenhouse gas emissions of fossil fuel generation plants and providing a bonus payment, or "adder" to forms of generation that produce few or no GHG. The slide Sue showed had these proposed prices per metric ton of CO2 equivalent:<br /><br />2012...$10.18/ton<br />2015...$23.76/ton<br />2020...$42.46/ton<br /><br />As I understand the math, solar would be compared to modern combined cycle natural gas powerplants, which I believe generate roughly 1 ton of CO2 per 2000 kWh. If that conversion is correct, then the "solar adder" would be:<br /><br />2012...$0.005/kWh (half a cent)<br />2015...$0.012<br />2020..$0.021<br /><br />The proposals also call for a time of delivery adder which values energy generated during times of peak demand more highly than energy delivered during off-peak hours and day.<br /><br />These proposed prices are not high enough to create a utility scale solar gold rush right now, but if the credit squeeze comes to an end in 2009, I do think there is the possibility of a rapid reacceleration of "big solar" funded by insurance companies and pension funds who want long term investments that are not tied to the up and down cycles of the stock market.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-43484125712311502002009-04-08T11:39:00.000-07:002009-04-21T10:09:44.724-07:00Tax Law Change Could Help 150,000 US Churches and Non-Profits Go Solar<span style="color:#ff0000;">Here's a copy of a proposal I've sent to my representative in Congress, Anna Eshoo. If you like it, please copy it and send it to your representative too.</span><br /><strong></strong><br /><strong>Opportunity</strong><br />1) Congress could enable 100,000 churches and 50,000 small non-profit organizations to put solar panels on their roofs in 2009-11 by a minor and temporary change to existing tax law.<br />2) The example these churches and non-profits set is likely to inspire hundreds of thousands of homeowners to add solar to their homes, thereby stimulating the economy and helping the environment.<br /><br /><strong>Current Situation / Problem Statement</strong><br />Federal incentives for solar photovoltaic (PV) systems are tax incentives. This puts churches and other non-profit entities that want to get rooftop solar at a terrible disadvantage – they have no taxes to offset.<br /><br />The solar industry and Wall Street have partially addressed this problem by creating Power Purchase Agreements (PPAs). With a PPA, an investment firm buys, owns, and maintains the solar system on the roof of a non-profit in exchange for a long-term contract to sell all the power from the system to the non-profit. PPAs effectively and legally move the 30% investment tax credit (ITC) and depreciation of the solar assets from the non-profit “host customer” to the for-profit PPA provider.<br /><br />However, the PPAs are not being offered for the small solar systems – the size most churches and non-profits need -- because the administrative overhead of selling and setting up a PPA is essentially the same no matter how large or small the system is. The very few PPA providers who have ever tried providing quotes for systems smaller than 30 kW found that the offers are not being accepted and have withdrawn from this market segment. As a result, there is no financially viable way for most churches and other small non-profits to install solar PV without paying for them using cash or borrowed funds.<br /><br /><strong>Potential Solution / Tax Roadblock</strong><br />For solar systems in the 5-30 kW range ($25,000 - $180,000 after incentives), many individuals have adequate capital to fund and own a solar system on a non-profit’s roof. In California, such an investor could earn a modest after tax return of 3-7% if two impediments in the tax code were removed. The first issue is the passive activity loss limitation which prevents most taxpayers from using the depreciation of their solar system to offset ordinary earned income. The second is the difficulty of passing the active participation tests. (If a taxpayer passes one of these tests, he or he can treat passive income as active).<br /><br /><strong>Requested Change in Law</strong><br /><strong></strong><ol><li>For a limited period (such as tax years 2009-2011)</li><li>For a limited class of renewable energy investments (such as solar PV and solar thermal)</li><li>For a limited group of eligible projects (such as 501(c) non-profit entities)</li><li>For a limited group of taxpayers (such as filers with AGIs less than $400,000 if married filing jointly or $200,000 if single)</li><li>Amend the passive loss rules to allow passive losses from leases and power purchase agreements to offset active income, not just passive income.</li></ol><br /><strong>Example</strong><br />Suppose that Jane and John Smith want to help their church go solar by purchasing a solar system that will be installed on the church’s roof. They want to recoup their investment by entering into a 15-year PPA with their church. Assume the Smiths have “modified adjusted gross income” of $155,000.<br /><br />Under current law, if they invest $80,000 to buy a 10 kW solar system (a fairly typical size) they would be able to claim $48,000 of depreciation as a passive loss in the first year of ownership<a title="" style="mso-footnote-id: ftn1" href="http://www.blogger.com/post-create.g?blogID=6839799951743666982#_ftn1" name="_ftnref1">[1]</a>. However, because their income exceeds the Passive Loss Allowance Limit of $150,000, they could not offset any of their non-passive income with this passive loss. Therefore, they will not be able to use this loss from a tax standpoint until the solar system’s revenues exceed its expenses many years in the future. The fact that the tax benefits cannot be harvested early in the ownership period makes this an unattractive investment for them.<br /><br /><strong>Example with Change in Law</strong><br />The Smiths would see things quite differently if they could benefit from the depreciation immediately. The investment would be quite attractive, and the Smiths would be willing to invest in solar for their church even though the overall IRR is modest. From their perspective, it would be like buying a bond or annuity but with an added environmental benefit. The church would benefit by getting 15 years of renewable energy with no upfront investment. The example set by the church would probably inspire many parishioners to purchase solar for their own homes who would not otherwise have done so.<br /><br /><strong>Argument from Precedent</strong><br />Current tax law already recognizes that some taxpayers should be able to use passive losses to offset some amount of non-passive income. That’s the whole purpose of the passive activity loss allowance, which allows taxpayers with modified AGI of $100,000 or less to offset up to $25,000 of passive losses against non-passive income. The proposal expands the existing rule to investments in renewable energy.<br /><br /><strong>Scale of the Opportunity</strong><br />Suppose 100,000 churches and non-profits entered into solar PPAs, with an average system size of 10 kW and price of $80,000 (before incentives). That’s one million kilowatts or 1,000 megawatts – about 600 times what Google has put on the roof of its headquarters in Mountain View. The amount of private investment leveraged would be $8 billion. These figures do not include the impact from homeowners who purchase solar systems because they were inspired by their church’s example, but their purchases could add a 3x multiplier or more.<br /><br />Current tax law already allows these tax benefits to be achieved, but only by large investors who have shunned this particular market segment. The proposal opens up a new path for capital to flow to churches and small non-profits – money from parishioners who are wealthy enough to want to help their parish and their planet, but not so wealthy that they would ever consider an outright donation of solar. There are millions of Americans who fit that description.<br /><br />Having a 2 or 3 year time limit on this program would spur all parties to move quickly. This sense of urgency would stimulate the economy and hasten the end of the recession.<br /><br />___<br /><a title="" style="mso-footnote-id: ftn1" href="http://www.blogger.com/post-create.g?blogID=6839799951743666982#_ftnref1" name="_ftn1">[1]</a> 5 Year MACRS with 50% stimulus depreciation allows them to depreciate 60% of their investment in Year 1.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com2tag:blogger.com,1999:blog-6839799951743666982.post-27360712078046674782009-03-17T14:55:00.000-07:002009-03-17T15:03:55.017-07:003-year Graph of PG&E Residential RatesThe graph below shows how electricity rates have changed for each of the 5 tiers in PG&E's normal residential rate plan, which is called the E-1 rate. After holding fairly constant throughout 2007 and early 2008, the top 3 tiers rose rather dramatically starting on October 1, 2008. On 9/30/08, the day before the rates jumped, you could have bought a kWh of "Tier 5" electricity for $.359. Today, less than six months later, the price is $.441. That's 23% higher, and during most of that period the cost of oil and natural gas have been trending strongly downwards! I wish this kind of information was being more widely reported.<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7N8UnCLTySVLx904GCWvo450mGUwjejUJu1co-TNZURhFbQs6wWXFtSgbtM9jSSKWRRJSNNh6KiEp9VwElq9TRaz6QajEjiDZiusihBvoxljv6QiyQt0msejf1Oq2twZgtvo1upY9BUQ/s1600-h/PG&E-3-Year.bmp"><img id="BLOGGER_PHOTO_ID_5314279305119412226" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 400px; CURSOR: hand; HEIGHT: 298px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7N8UnCLTySVLx904GCWvo450mGUwjejUJu1co-TNZURhFbQs6wWXFtSgbtM9jSSKWRRJSNNh6KiEp9VwElq9TRaz6QajEjiDZiusihBvoxljv6QiyQt0msejf1Oq2twZgtvo1upY9BUQ/s400/PG&E-3-Year.bmp" border="0" /></a><a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-21613489816253275842009-03-05T13:02:00.000-08:002009-03-05T13:03:51.472-08:00Local Electricity Prices Rise AgainPG&E raised its rates substantially on March 1, 2009.<br /><br />For the standard E-1 residential rate plan, the new rates are:<br />Tier 5... $.44/kwh (up 7.4%)<br />Tier 4... $.38/kwh (up 6.9%)<br />Tier 3... $.26/kwh (up 5.1%)<br />Tier 2... $.13/kwh (unchanged)<br />Tier 1... $.12/kwh (unchanged)<br /><br />Tiny changes were made to the E-6 and E-7 time of use rate plans usedby most solar homeowners.<br /><br />For small businesses on the A-1 rate plan, rates increased 7.2% to $.179/kwh. For larger businesses on the A-10 non-FTA rate plan, the rate went up a whopping <strong>13.5%</strong> to $.158/kwh.<br /><br />PG&E's complete rate history for the last 10+ years can be found online at <a href="http://www.pge.com/mybusiness/myaccount/rates/">http://www.pge.com/mybusiness/myaccount/rates/</a> (By the way, few utilities make historical rate information as easy to find as PG&E does.)<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-13434822044726591662009-03-01T15:18:00.000-08:002009-03-01T15:26:23.110-08:00Solar for your Church or Favorite Non-ProfitOne of my new projects is to develop tools and templates to help not-for-profit organizations like churches and charities that own their own buildings go solar.<br /><br />Non-profits with large enough electrical bills and enough roof space can already go solar for no money down with a Power Purchase Agreement (PPA). This form of solar financing is available from some sources for projects as small as 20 kW, though more frequently a minimum of 50 kW is required. (20 kW of solar would cost a non-profit about $110,000 after incentives in California.)<br /><br />However, I'm not aware of any provider who offers PPAs to churches and charities who need less than 20 kW. That's the niche I'm trying to fill. If you'd like to offer suggestions or know more, please leave a comment on this entry.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-67885281309717219912008-06-17T20:44:00.000-07:002008-06-17T20:51:44.704-07:00Charting Seasonal Output<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcil6CwpqKpsecLImUnzinV0wMiI2HHFHWwL-QWwu7qX1adSx2C42zWBguZ-ctU2gwA3Ttun9KN7Q-9cROpp2cncC4njmAg4L6Xs4iRN4udTd14qzulLwc-Lszyg4O2KjVETwdXUei_0g/s1600-h/Output$.bmp"><img id="BLOGGER_PHOTO_ID_5213063257471351826" style="CURSOR: hand" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcil6CwpqKpsecLImUnzinV0wMiI2HHFHWwL-QWwu7qX1adSx2C42zWBguZ-ctU2gwA3Ttun9KN7Q-9cROpp2cncC4njmAg4L6Xs4iRN4udTd14qzulLwc-Lszyg4O2KjVETwdXUei_0g/s400/Output$.bmp" border="0" /></a><br /><div>Now that many of us who got solar in 2007 have completed our first solar year, some interesting results are available for those of us who have charted our usage. The graph above shows the average value (in dollars) of my solar system's daily output over the 13 month period from 5/15/07 to 6/15/08. (I'm on the E-7 rate plan, which is no longer available to new solar households). </div><div> </div><div>Because the E-7 peak rate is $0.28 from May 1-Oct. 31 and only $0.10 from Nov. 1 to Apr. 30, my solar system generates very little value for six months of the year. (It faces WNW, which exaggerates this effect compared to a South-facing system.) So, if I ever need to take my solar system offline to re-roof, I whould do it in early November when the weather here is usually quite nice (but the value of my solar output is paltry.)</div><a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com1tag:blogger.com,1999:blog-6839799951743666982.post-74192377563252647712008-03-14T14:41:00.000-07:002008-03-14T15:02:05.378-07:00Solar Buyers Group Returns to Mountain ViewAs explained in the <a href="http://www.mv-voice.com/story.php?story_id=3874">story in today's Mountain View Voice</a>, a second edition of the solar buyers group is now active in Mountain View. This year's group is being organized by former Mayor Mike Kasperzak, who purchased a solar system as part of the first group.<br /><br />Dates and times for the first two public meetings are:<br /><br />Wed. <strong>March 19</strong>, 7 pm, MVLA High School District Office Board Room, 1299 Bryant Ave., MV<br />Thur. <strong>April 3</strong>, 7 pm, the historic Adobe Building, 157 Moffett Blvd., MV<br /><br />You can register for either event here: <a href="http://www.solarcity.com/tabid/133/Default.aspx">http://www.solarcity.com/tabid/133/Default.aspx</a><a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-67733293036572858462008-03-07T15:57:00.000-08:002008-03-07T16:00:06.454-08:00We're on The News Hour with Jim LehrerIn December, Twana and I were filmed for a segment of The News Hour with Jim Lehrer. We didn't hear anything for months, and then yesterday we were told the segment (on carbon credits) was going to air that evening.<br /><br />Here's a link to our 15 seconds of national fame.<br /><br /><a href="http://www.pbs.org/newshour/video/module.html?mod=0&pkg=6032008&seg=2" target="_blank">http://www.pbs.org/newshour/video/module.html?mod=0&pkg=6032008&seg=2</a><br /><br />We're not sure how we were selected to appear. Our best guess is that the program manager for the ClimateSmart carbon offset program at PG&E gave our names to the segment producer.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0tag:blogger.com,1999:blog-6839799951743666982.post-50337862001416184742008-02-22T05:24:00.001-08:002008-02-22T05:56:33.366-08:00Electric Bill Below Zero? How to Responsibly Increase Your UsageIt's been 9 months since our 2.4 kW DC (1.9 kW AC) solar system was installed. I can now project with reasonable confidence that on the one-year anniversary of the system, I will have a cumulative energy charge of <em>minus $65</em>. In other words, my wife and I will have donated $65 worth of electricity to PG&E.<br /><br />At last night's MV Enivronmental Sustainability Task Force meeting, <strong>Marn Yee Lee</strong> mentioned that she and her husband was in the same boat, and asked if I would blog about environmentally responsible ways to use more electricity and less fossil fuel.<br /><br />The reasons we have a negative electric bill are some combination of:<br />1) it was a very mild summer and we used our air conditioners very little<br />2) our energy conservation efforts were more successful than we imagined,<br />3) we were more successful in shifting our usage to "off-peak" hours than SolarCity's models expected.<br /><br />Here are a few ideas about how to use more electricity in a responsible way. Feel free to add more as a comment to this posting. I make no claim that any of these have a positive ROI, this is just a "top of mind" list.<br /><br />1) If you have a gas range or oven, use them as little as possible. Use the microwave, toaster oven or even an electric frying pan instead. If you remodel your kitchen, go all-electric.<br />2) Get an electric kettle to boil water for tea instead of using your gas range, but only boil just as much as you need.<br />3) Replace your gasoline powered outdoor equipment (mower, blower, string trimmer) with electric equivalents. If you have a gardener, tell him you want him to use the electric equipment that you provide rather than his own gasoline-powered equipment.<br />4) Turn down your thermostat at night even more than you already have and use electric heaters in your bedrooms to keep things warm enough to suit you.<br />5) Skip the bedroom space heaters and buy an electric mattress pad. Turn these on high an hour before you go to bed and you'll never slip into cold sheets again.<br />6) Replace your gas dryer with an electric dryer or simply buy a "clothes spinner." This is an appliance that extracts water from clothes that have just been washed by spinning them at high RPM for about 3 minutes. Once the clothes have been spun, they will dry much faster in either a dryer or hanging on your clothes line.<br />7) Replace your gas water heater with an electric water heating system, either tankless or traditional. (I must note that installing a solar hot water heating system would be better for the environment and cost less in the long run.)<br />8) Buy an electric vehicle or plug-in hybrid.<br /><br />Some of these suggestions will use only a few dollars worth of your "excess" electricity and others will consume all of it and then some.<br /><br />We've already done #2 and #5, and I would like to buy a clothes spinner soon. If spinners work as well as I've heard, it might make line drying fast enough for me to go back to doing it in the summer like I did when I wasn't working.<br /><br />What are your suggestions for additions to this list?<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com1tag:blogger.com,1999:blog-6839799951743666982.post-34271254340397834372007-12-21T11:09:00.000-08:002008-03-01T14:47:42.190-08:00SolarGuard is Up and RunningI've had SolarGuard monitoring running on my PV system since November. You can see my system's performance at <span style="color:#ff9900;">this new url</span>: <a href="http://solarguard.solarcity.com/kiosk/SolarGuard.aspx?ID=800001F1-1172101504&AutoDemo=1&Timeout=90&ChartDate=3_1_2008&RangeType=Week">http://solarguard.solarcity.com/kiosk/SolarGuard.aspx?ID=800001F1-1172101504&AutoDemo=1&Timeout=90&ChartDate=3_1_2008&RangeType=Week</a> <span style="color:#ff9900;">(There is a 12-day gap in the record due to a firmware problem that was fixed on Jan. 23.)<br /></span><br />SolarGuard sends my inverter's output statistics to SolarCity's computers. There is a transmitter attached to the inside of the inverter that sends the data wirelessly to a receiver in my home office. The receiver is plugged into my router and sends data via our cable modem.<br /><br />SolarCity can use the data to monitor the performance of my system, and soon will be able to compare my output to that of other systems they have installed in Mountain View. If there is an unexpected decline in production that isn't mirrored by other nearby systems, they will alert me to the problem.<a href="mailto:bkarney@aol.com?subject=Your%20Solar%20Blog">Bruce Karney</a>http://www.blogger.com/profile/13284122529680730803noreply@blogger.com0