The annual Washington solar production incentive payments are based on the fiscal year from July 1 – June 30, so everybody with a grid-tied pv system is about to read their meters for the 2015/2016 year.
You will get a letter containing this form below. If you are a PSE customer, the form will be filled out for you. We are not certain what the Jefferson and Clallam PUD’s are planning this year. We have highlighted some of the important fields.
The main thing you want to bear in mind is to go read your production meter on June 30. Even if you are in PSE territory and they are going to read your meter and provide the information for you, we recommend reading your meter yourself at least annually. Then you will want to compare that figure with last year’s June 30 reading in order to get your annual production figure for this year. You will also be able to copy your DOR Tax Reporting Number from the top of last year’s form.
Unless you are among the minority of our clients who have the Made in Washington PV modules from Silicon Energy or Itek, you will use the field highlighted to report your total kilowatt-hours for the year. Although the base rate is stated as $0.15, all utilities in which we operate are or will be pro-rating this base rate due to the fact that the applications are now exceeding the available incentive pool, of 0.5% of taxable utility revenues.
In the midst of our series of 2016 Solar Tours, we bring the Jefferson Solar Tour and EV Round-Up. This will be our second year of making this Solar Tour petroleum-free. Last year, we had 6 different electric vehicles (Nissan Leafs, Toyota RAV4 EV, BMW i3, Smart EV, and Tesla) carrying tour-goers to the local solar homes.
The Jefferson Solar Tour is on Saturday July 9th, and will commence at 10 AM with tour orientation and Solar 101. The local solar homes will be open from 11 AM – 3 PM, and while this is a self-guided tour, we hope everyone can drive or be passenger in an electric vehicle. With our 10 KW PV system and Level II EV charging equipment here, we try to run these tours on 100% solar power.
Kick-off Location: Power Trip Energy, 83 Denny Avenue, Port Townsend, where you will be able to pick up maps and information, as well as ask questions of the Power Trip Energy staff.
10 AM – 11 AM “Spin Your Meter Backwards” Solar 101 workshop
10 AM – 3 PM: Tour info, Maps, & Staff available for questions
11 AM – 3 PM: Solar Homes Open for Touring
People tell us that the solar tours are the most valuable educational events we conduct. Over the years, we have created a curriculum and determined how to make a focused informational solar tour that works well for attendees and hosts alike.
For more details on the entire summer tour schedule, see http://powertripenergy.com/upcoming-events/solar-home-tours/
The first tour will involve three homes in North Kitsap (Kingston, Poulsbo, & Indianola) that are different examples of state-of-the-technology grid-tied solar PV systems.
The kick-off location for the North Kitsap Solar Tour will be the Kingston Community Center at 26159 Dulay Rd NE, Kingston, on Saturday May 14th. From 10 AM – 11 AM, there will be a brief presentation letting you know what you will see, and providing context for your site visits, maps will be available, and solar experts on hand to answer any questions. The sites themselves will be open for touring from 11 AM – 3 PM.
High solar demand, lower equipment prices, higher wattages, bring continued solar installation growth on Olympic Peninsula
There are several trends in the solar industry that are benefitting us locally, and driving our growth. We are currently installing over 60 KW per month, having installed 180 KW in Q4 of last year, and Q1 of 2016. That means in each quarter, we are installing as much solar as we did the first five years of business from 2003 through 2007.
We continue to see prices on pv modules slowly decrease, mostly as a result of global manufacturing capacity increases and efficiency gains. SunPower specifically has seen recent gains at its fourth “Fab” and is now approaching producing 1500 MW of pv per year.
So as a result of this increased manufacturing capacity, SunPower has been able to give us a fairly significant price cut recently, in addition to adding a 360 watt version of their standard residential pv module. We have been installing mostly 327’s for the last year, though now the 345’s are very close in price per watt and will make up the bulk of our designs for the remainder of the year. In cases where we want to make the most power possible, we will give our clients the option of the 360 watt product.
The increased installation rate here at Power Trip Energy also creates an interesting dynamic in terms of our pricing. With more and larger projects being installed each month, without our overhead significantly increasing, we can lower our installation charges on each job. So the lower equipment costs are actually resulting in lower labor charges as well.
The extension of the federal tax credit has removed a major deadline we were facing at the end of 2016 so we can intelligently plan for manageable growth this year. The waning state incentives should be considered, since we have about four more good summers to capitalize on those annual production payments from the state.
We don’t know how long these market conditions will persist, but we do know there has never been a better time to install a grid-tied pv system in Washington.
Are 10 Year old Solar PV Modules Obsolete?
This 10 year old array continues to produce returns with no additional investment on our part. Thanks to the Energy Edition of Industry Focus for bringing up this topic – http://www.fool.com/podcasts/industry-focus. Sean, Tyler and Taylor – I hope you appreciate my Foolish perspective.
In 2015, Power Trip Energy assisted three local businesses receive USDA REAP grants that provided 25% of the funds for solar PV and other energy efficiency projects. We have installed solar PV at two of these businesses and expect to install at the third once the development of their new location is complete.
- Ryan McCarthey of Dungeness Valley Creamery noted “The solar PV system purchased with the assistance of the REAP program helped us decrease our energy costs and become more energy-independent.” He also stated: “Producing our own clean renewable energy not only reduces operating expenses, but it helps us communicate to our customers our passion and goals as a business. Being environmentally conscious and big picture thinking is integral to our long term sustainability.”
- Eric Jorgensen of Finnriver Cidery commented: “Finnriver is extremely excited to be partnering with the USDA REAP program and a local solar installer to work on a major solar installation at our new facility. The advice and assistance we received from USDA program staff were very helpful in helping us submit our successful application. If you are considering any alternative energy improvements we highly recommend finding out if you might be eligible for this great program!” And Crystie Kisler of Finnriver added “It’s important for our community to explore alternative energy solutions and this grant offers us a way to bring more innovative projects into our area.”
Washington State Solar Incentives – Cost Recovery Program (Existing and Ending) and HB 2346 (Proposed Legislation Being Considered in Olympia Now)
As many of you know, the declining state solar incentives here in Washington State are scheduled to completely sunset June 30, 2020. The cost recovery program has been one block in the foundation of solar economics here in Washington State since 2007. In that time, we have seen continued geometric growth, increasing the installed KW by ~ 40% per year. However its success is the cause of distress in many areas. Because the cap on the incentive was fairly low, that cap has now been breached in many utility areas, including Jefferson PUD. In Jefferson PUD for the program year July 1, 2014 – June 30, 2015, incentive applications were approximately $225,000 and the overall incentive pool was only about $155,000, resulting in prorated payments down to 70% of the regular base rate. At the inception of this program, there was virtually no solar PV market in the state, and nobody expected to exceed these caps by this time. This is an unfortunate and unexpected loss for the early adopters now that solar has gone mainstream.
Without a remedy to the loss of state incentives, we may well see a leveling-off of the solar growth. This might well result in layoffs at our company and others across the state. In Washington State right now, there are 128 companies that self-identify as solar companies, employing about 2400 people, nearly all installers. At Power Trip Energy Corp, we currently employ 10 people, and have installed about 3 MW since 2003.
State-wide solar capacity is now 60 MW installed, up from 11 MW in 2014, and 6 MW in 2012. Almost all of this installed PV is customer-owned, distributed generation making power at the point of use, and paid for by the property-owners. The state offers no up-front rebates, however there is a sales tax exemption, and also the 30% federal tax credit, which has helped people decide to invest their own money in solar PV on their homes and businesses. The main support the state offers for the installation of PV is the production incentive which pays for all PV produced, creating an economic mechanism for the additional value we see in solar above and beyond electricity generated by coal, nuclear, and the federal hydro-system on the Columbia and Snake Rivers. As mentioned above, the state solar production incentive is nearing the end of its useful life.
Despite the current solar capacity of 60 MW seeming large to some of us, it is important to remember that this is still responsible for much less than 0.5% of our overall electricity portfolio.
There is currently proposed legislation that will create a second phase of state incentives, which will close the existing program and accept new enrollments through 2020 and would provide 10 years of incentive stability for new enrollees in which to make fair financial returns, while decreasing the incentive rate structure every year between 2017 and 2020. This is called HB 2346 – Promoting a Sustainable Renewable Energy Industry – and you can view the full details here: http://app.leg.wa.gov/
This bill is the result of a two year process bringing together multiple stakeholders including the nascent solar industry, utilities, environmental groups, and consumer advocates. We are strong supporters of this bill for many reasons.
Since 2002, we have placed our own self-interests inline with the belief that our community and our state would be well-served by developing a robust renewable energy infrastructure. We have made the case that individuals should invest in renewable energy on their own homes as a way to generate some of their own capital, decrease their dependence and expenditures upon utilities. This serves the individuals by increasing the value of their home, and decreasing their energy bills in the long run. It serves the community by keeping more money local, and making the overall community more resilient. It also contributes to the overall global benefit of producing energy without contributing the the carbon emissions of coal, the radioactive waste of nuclear plants, or the environmental degradation of the mammoth federal hydro system.
This bill supports those goals by allowing individuals to continue to benefit from investments they make in their own home through the diversion of a portion of the state’s utility tax. Due to the relative low caps per project on this incentive, it is only incentivising small (generally under 20 KW) solar pv arrays, which will nearly all be installed on residential and small business rooftops. Since these arrays are installed at the point of use, there are no inefficiencies from transmission losses.
In this way and others, the promotion of distributed solar energy benefits all ratepayers. Northwesterners do benefit from the cheap electricity produced from investments made in this federal system decades ago (despite its decimation of salmon and other problems). Likewise will future generations benefit from our efforts today, as we diversify our energy infrastructure with more solar producing clean renewable distributed energy.
For these reasons and more, we support HB 2346, and urge you to do the same.
As we take off running into 2016, here is a brief look back at 2015. We are struck by the progress on several clean energy fronts in the second half of 2015.
The EPA’s Clean Energy Plan announced in August will hasten the transition to non-carbon based electricity generation. This represents a significant increase in the EPA’s authority over state’s energy policies and fuel use, although it doesn’t dictate how states reduce CO2 emissions, just that they must reduce or they must pay to participate in carbon reduction markets. This will be a long and winding legal road through numerous court challenges, but certainly represents a progressive step towards cleaner air. http://www.epa.gov/
This ITC extension is very good for the solar industry as well as taxpayers because instead of looking at a bubble in 2016 and perhaps a decrease in 2017, we are looking at several years of more predictable growth. A very good forecast and details of the tax credit schedule are in this Utility Dive article: http://www.utilitydive.com/news/what-utilities-need-to-know-about-solar-growth-after-the-itc-extension/411139/
California’s Net Metering 2.0 does not affect us directly, but represents a major confirmation that very high levels of distributed pv should be valued at the retail rate at the point of use. http://www.utilitydive.com/
Unfortunately we have seen some back-sliding in some states where the utility industry has a more unified influence on the government regulators, as in Nevada and Arizona. http://www.technologyreview.
Locally we saw another record year for pv installations in the state and at Power Trip Energy. Here at Power Trip Energy, we installed 570 KW last year, an 18% increase over the previous year, compared to ~40% growth overall in the state in 2015.
The question will now be what the WA legislature does. We stand at a crossroads here in WA. Will we lead the way to a cleaner environment and healthier economy, with individuals empowered to improve their homes and reap the benefits. Or will we back slide at the behest of utilities which are clawing to hold onto a past they can not have as their future? We are founding members of Solar Installers of Washington and through this group we are supporting efforts in Olympia to address our state programs.
Regardless of what our national and state governments do, we will continue to serve our clients by surveying the renewable energy industry and providing our best assessment of what makes the most sense for our clients, and performing quality turn-key installations.
Thank you to our clients and best wishes to everyone for 2016!
“Net Metering” describes the relationship between a utility and its customer when the customer has rooftop solar that is sometimes feeding the grid in addition to supporting their own loads, and the customer is compensated at the same rate as they are charged per kwh consumed or provided. In Washington, we have a net metering law requiring utilities to accept net metering systems up to a total capacity of 0.5% of the 1996 peak load. For more info read here http://powertripenergy.com/solar-faq/
Many utilities are now reaching that level, and due to the PR efforts of national electric industry interests, some local utilities are using language they have heard which threatens solar here in Washington. Increasing the legislative caps on net metering is crucially important to allowing private individuals the freedom to invest their own funds in upgrading their house with solar, and being compensated at a fair rate for the clean electricity they provide to the utility. Unfortunately the legislature has had a difficult time addressing this issue, even though the present cap of 0.5% of a peak load from 20 years ago is miniscule.
Here is how three other states are faring, based on recent news:
Hawaii’s Utility commission has voted to end net metering after seeing solar on as many as 16% of the homes on Oahu. This is poor policy, and will probably lead to grid-defection among some people who can afford batteries and who have large parcels (Hawaii law requires utility electrical service on standard small residential lots.) http://www.greentechmedia.com/articles/read/hawaii-regulators-shutdown-hecos-net-metering-program
New York regulators have suspended the caps on net metering in an effort not to interrupt installations as reaching the current 6% of load cap is imminent. http://www.utilitydive.com/news/ny-regulators-lift-solar-net-metering-caps-until-rev-docket-sets-der-values/407667/
In Vermont, the net metering cap was raised from 4% to 15% two years ago, a cap that has now been reached. Regulators are considering removing the cap. http://www.washingtontimes.com/news/2015/oct/24/vermont-reaching-net-metering-cap-with-solar-expan/
Based on the level of solar other states are working to achieve, if you hear anyone talking about solar causing problems in Washington at 0.5% capacity, your response should be skepticism.