The pandemic lockdown orders of 2020 led to an unprecedented interest in solar energy technology. Image by Vivint Solar via unsplash.com
Written by Frank Lopez
We are in the middle of one of the hottest summers on record, and that is being reflected in monthly energy bills.
While the rest of the country plays catchup to California’s progress in meeting its environmental goals, energy consumers are looking at more avenues to reduce their environmental footprints, as well as their energy bills.
With so many people stuck at home during the pandemic, more people were thinking about how to improve their homes, which led more people to consider solar power.
Brad Heavner, policy director at California Solar & Storage Association, said that most people have a general interest in solar power, but the pandemic lockdown orders of 2020 gave people opportunity to think about it more.
Anyone considering installing a solar power energy system to their home should do it now, Heavner said.
“There actually will never be a better time to go solar than right now, Heavner said. “Costs have come down and may be at their low point, and at the same time, policies are likely to change soon so that utilities give you less credit for the electricity that you give to them.”
In 1995, the California Legislature passed a law mandating net energy metering, which required utilities including PG&E to offer bill credits to customers for surplus electricity they put into the grid.
Official proceedings at the Public Utilities Commission are taking place, with public utilities and other parties proposing to reduce the credit that solar homeowners receive. A decision is expected by January.
Currently, there are no state or local tax incentives for solar, but there is the Federal Solar Investment Tax Credit, which could qualify a homeowner who buys and installs a home solar system for a 26% federal tax credit. The credit drops to 22% in 2023 and ends in 2024.
California does have an incentive for solar battery installation. The Self-Generation Incentive Program (SGIP) offers a rebate of 15% to 20% of the average battery cost, but Heavner said the money for that program is expected to runout this year.
According to SolarReviews.com, installation for lithium-ion batteries can cost anywhere from $7,000 to $14,000.
Heavner said the solar contractors he speaks to are saying consumers considering going solar are also asking about solar batteries.
“There has been so many outages from fires and from fire prevention that backup power has become important to a lot of people,” Heavner said. “Technology now has really solidified so we have a bunch of different battery companies with a lot of products that work great.”
It’s not just homeowners that are showing interest in solar technologies, but businesses as well.
It is a huge asset for a business to be able to independently power itself in the case of fires or power outages and have reliable electricity. Solar batteries are also beginning to be utilized at school campuses, offices and industrial buildings.
With the way that commercial energy rates are set up, Heavner said that a business that installs a solar battery can see positive savings with the reduced electric rates.
Cisco DeVries is CEO of OhmConnect, a clean energy company based in Oakland that helps its customers respond to energy price swings and pays them to reduce their energy use when the electric grid is “stressed, expensive and dirty” during peak periods.
In the past, services provided by companies such as OhmConnect were performed by utility companies for large businesses and industrial companies.
DeVries said that OhmConnect is the first program of its type that supports both residential and small business customers. Previously, it wasn’t possible for smaller businesses to get paid the way large businesses could for reducing their energy use.
OhmConnect offers technologies and software that makes it easy for customers to sign up and then get shipped a smart plug to connect appliances with and a smart thermostat, and then the customer is part of the program.
It has over 170,000 customers in California and tens of thousands in the Fresno area, DeVries said.
The company is tied in to the state grid operator, the California Independent System Operator Corporation (ISO), a nonprofit public corporation that manages the flow of electricity across power lines that make up 80% of California’s power grid.
The California ISO dispatches OhmConnect during peak energy usage times to reduce demand for power.
“We get paid the same exact money that would have gone to a powerplant to turn on,” DeVries said. “We turn around and we share a big chunk of what we get paid to our customers that actually reduced.”
During times of high-energy use, OhmConnect will control the settings on their customers’ thermostats, turn off some devices and send text messages to customers to reduce energy.
DeVries said that the amount of electricity use that has been reduced through OhmConnect is equal to what is generated by three natural gas power plants.
Because of record heatwaves in the state, more people were using their AC units, and with less water in California due to the drought, hydroelectric generation capacity has gone down as well.
Over the course of the pandemic, energy use did go down slightly, DeVries said, but there was a big shift from energy being used for commercial use to residential use, and the times for energy use changed as well. People were using more energy during the day because they were stuck at home, and staying up later into the night and using more power.
Because businesses saw such a dramatic drop in revenues over the pandemic, business owners started to think of ways to keep more money, and energy usage for their business was top of mind, leading many businesses to partner with companies such as OhmConnect.
“OhmConnect became an option for people — they could sign up and make a couple extra hundred dollars,” DeVries said. “We really heard about a lot more people using this for their business or their residential needs as an additional source of income. We’ve had a lot of growth during this period of time.”
Even though the economy is reopening, and more people are comfortable with going to crowded events and stores, there are still a lot of people that are staying home more often and with increased energy rates, are getting high energy bills.
Planet Solar, a solar installation company based in Clovis and with location in Palm Desert, Santa Barbara, Puerto Rico, has seen more businesses since the pandemic, and founder and president Ben Siebert said the company has never been busier.
“I have never seen demand for solar like we are right now,” Siebert said. “The amount of people sending us inquiry forms because they are interested in solar is probably four times what it was last year, and what it’s ever been.”
There is also more interest for battery storage and there are tons being sold in California, but in the Fresno area batteries don’t sell as much. Because of Fresno’s location on the California electric grid map, and with its hydroelectric generation, there is a constant flow of electricity through the area to get to its destinations in Southern California.
Because of this, it is very rare for the Fresno market to have power outages when compared to areas such as Los Angeles.
People in more rural areas find it more ideal to have solar battery storage because of fires, controlled burns and power outages.
Because solar battery storage is a newer development in solar technology, Siebert said that only about 20% of solar installers have the electrical skills to be able to install it properly. Batteries are intended to be used as a backup load for critical activities such as lights, internet, and powering the fridge, but not washers, dryers and AC units.
Siebert said that for the first time in the industry’s history, companies have had to raise their prices because of suppliers raising prices because of the cost of materials for aluminum, silver, and copper wire.
There are also issues with labor shortages that lead to price increases.
“I’m expecting demand to continue like we’ve never seen before. Batteries are going to be more popular—battery systems are a significant investment but it takes pressure off the grid,” Siebert said.