Two Decades of Solar Pioneers in Sacramento – Episode 27 of Local Energy Rules Podcast

I mean, we partnered with a thin film manufacturer and they brought ’em here to Sacramento and we used a lot of their stock. I seemed to even remember some B stock we used in some of RIE blends, but were perfectly still good in our installations. So those came to us at almost nothing. So when you start adding in all the economies of scale that we get, when we’re doing megawats at a time, you can lower those costs, but please understand. I mean, we weren’t magicians. I’m very proud. I came on during that time. I’m very proud of what SMUD did in the PV pioneer program. And certainly the PV pioneer two program, which I was more directly involved with at that time.

And you know, I spoke at UEX once, and I said, you can have any solar system you want in Sacramento, as long as it’s a black model T. And I said that for a certain reason, is it, we went to customers’ homes, and we said, here’s your two K cookie cutter system. And we never had to worry about redesigning it. Once we designed it one time, it was simply placing it on the right spot on the roof. So how we delivered the product was substantially cheaper than a custom design system for a home. If I have TV on my home right now and my home, my system is designed for my home, that wasn’t what SMUD was offering. SMUD was saying, Hey, we’re, we’re gonna go down and you’re gonna buy a system. Or when we got to the PV pioneer buy a system, but we’re gonna deliver a system to you. And you have choice a, would you like to participate in the program? We’re trying to learn about distributed generation.

We’re trying to get people to get solar away from being special, unique. Everybody stands around and stares at your roof for six hours. We want it to be something where you drive down the road and you expect to see PV. You and I are living in a world today where we may see that. I jokingly tell people that I’ll know I’ve completed my job here at SMUD when two things happen: one, we no longer have a solar program, because it’s just like putting in HVAC, a heating and air conditioning. It’s just like putting in windows. It’s just what we do. And I’ll also know it because we won’t have a new construction program that incentivizes solar on new construction homes. Why? Because people won’t walk into a house and ask to see if they’re solar, they’ll walk outta the house and go, why was there not solar?

So we’ve, from day one, tried to get to that point of the market where we’re not necessary because it’s a viable, sustainable, mature, part of our economy and the best way for us to do it at the time. And I can agree with the gentleman who designed the program, the PV one program was to just get as many out there as possible. We happen to be blessed to live in a very, what people would call green community here in Sacramento. We’re well above our RPS goals and our people want us to continue to stay well above our RPS goals as a nonprofit. So we were overwhelmed with people who said, yeah, use my roof, see if it’s gonna work SMUD. So it was, it was really a meeting of the mind. It was really an opportunity for a very green community and a very green utility to step forward and say, we’re gonna do some crazy stuff and see if it works, but the way we’re gonna do it is just gonna sell. But we’re gonna put the, a very basic, very simple, very small in today’s world, size system on as many roofs as we can and see if some economy as scale got in.

One of the things we also did through this, which there was none, was build a viable sustainability contracting community. You know, nobody knew about PV when we started. We put it on, we had to go out and find contractors. We had to go out and train contractors. We had to be trained. Good gosh, I even trained building officials at some point because they’d never seen it. We were the subject matter expert on all this. We were doing it before, you know, the state of California decided to join us, which Schwartzenegger signed in the million solar roof program. If you can make a look at the days, we’re a decade or two before him, right?

And the solar PV systems of course are modular. It’s all these little panels, the same panels that go on a home go on in these larger arrays, even when they build in that utility scale. And, and so there’s a lot more opportunity to sort of iron out the challenges. And it sounds like SMUD had that same approach. I’m curious, you know, you mentioned the PV pioneer two program, which was the sort of the second iteration. As I understand it, that’s the one where customers would buy the system themselves. They would actually own them and have a net metering relationship with the utility. They’d be offsetting their own energy use. How was the utility involved in that, was it the same kind of cookie design? Was there financing, were the costs similarly low?

That’s the commitment SMUD had to solar. And what we would do is we would go out and we would use the combination of thin film or crystal in near the end, cuz we matured the thin film partnership we were in. We were, partner, the thin film manufacturer we were partnering with, came into some STR we wanted to continue to deliver the program. We went to crystalin. If you remember back in the early two thousands, there was a lot of promise of what thin film technology was gonna deliver. It hasn’t delivered that yet, but we can always still hope because of the lower cost of manufacturing, but it hasn’t been there yet. So we transferred to, to crystalin what we designed was the same thing. We said years two K or 2.6, four roughly. Um, here’s your two K system string and ver cuz it’s all we had back then.

And my design team, myself and the other solar specialists, we would go out and we would have to crawl the attics. We would literally go through the entire house and do a site survey, but we didn’t have to worry about what equipment we put on anymore because we knew that you got system a, your choice was near the end. Did you want one system or two? Because we had so much feedback about, I want two systems, but you know, at that point it was really leading the building officials through because when we first started to do this, I had to crawl every attic and, and create span tables and prove that the roof wasn’t gonna collapse. Nowadays, you only have to do that because everybody knows it’s two pounds per square foot and you’re not gonna fall through your roof. And so most jurisdictions kind of wave the hand. If it’s crystal and system, wave the hand and you only have to do roof spans anymore because cause it’s a mature technology. Well, at the time we started doing this, every step we had to go through engineer, improve every step we engineer improve. So it doesn’t make sense for me to reengineer a 10 module system, a 20 module system, a 15 module system, a 12 module system and 11, no, no, no. You get your 10 modules, have a good day. You get your 20 modules, I should say, have a good day. So that’s where we got the economies to scale.

So we’re nowhere near 450. I think that’s the world needs Mavericks and the world needs people who achieve what the Mavericks dreamed. And we were very lucky with our PV pioneer one and two programs to have Mavericks and leaders in the end industry. People who dream big and I believe achieved well. But those type of folks don’t build viable, sustainable marketplaces. What we need is folks who come in and do the day to day operation, who will retire before we get 500 megawatts of residential solar. As opposed wrote this report. I want to remind you talks about all the different solar types that, that we classified PV pioneers, not just the PV, but where you and I are talking about just residential, as in residential customer side customer-owned distributed generation, I doubt we get to 500 before I retire in six years. I just, I don’t see that happening. The market has gone, intake in our marketplace has gone up 300%. In probably 18 months, I would have to do the exact math now, but we were averaging about 70 interconnections a month less than six months ago. And we’re over 300 connections a month now. So the market’s blowing up even in SMUD’s territory, which is a very hard place to sell solar. I mean, one thing people don’t understand is we’re the third lowest rate in the state, one of the lowest in the, you know, non-coal utilities in the country I heard. So it, the cost benefit for PV is not a good, easy sell here. You’re replacing 9 cent power, 8 cent power, or energy, I should say. So with the biggest comment we get from our contractors is when are you gonna raise rates? It’s like, well, we…

I’m like, last time I checked, God turned lights out every night. So you’re probably gonna still have a SMUD bill. And last time I checked, you’re hooked up to the grid. You know, people are buying a product they’ve never purchased before. I use the example that if you and I were gonna go buy a Tesla, it’s brand new technology, it’s really cool, beautiful car. Doesn’t have an engine. It’s got a motor, totally different technology, but you and I would kind of know what we were buying. We bought cars before. We just hadn’t bought that technology a car before. You and I have never shopped for energy and power, not one day of our lives in this country. Have we shopped for energy or power? I mean, there’s a couple of large entities that are able to do some true shopping of the actual current, but not really the, the interconnection or anything. So it’s almost like buying a Martian spaceship, but yet we have people, guys knocking on a door selling people a Martian spaceship when they’ve never shopped for energy before, and then they’re getting taken.

So I think what you’re gonna see is you’re gonna see utilities decide in some for-profit, but certainly the nonprofits, decide they need to get back into the marketplace to be that trusted energy provider and trusted energy advisor. Because I know there’s people here at SMUD who would probably want to get back into the marketplace. I will continue to say, we need to educate our customers, but we may play that game someday. Salt River Project or whoever it is you said may play that game because there that game, because you know, if customers are going to replace 10 cent power with 14 cent solar power, perhaps somebody just needs to step into the room and say, would you like solar? I t’s gonna cost you 11 cents. Do you want it at least be tell the customers the truth?

I think what you see now is you see so much dishonesty in some of these leasing programs that, you know, if you care about your customer base, I mean, we pulled a large segment, not a huge, but large segment of lease PPA style, zero down agreements, and almost 80% of them either lost money or stayed the same. Less than 20% actually saved money. So 80% of our customers who got involved in solar, how many of that 80% of this sample set, okay, we need to do a bigger survey, but of this sample set, how many of those people thought they were saving money? Were all of them like me? Who said, I really don’t care if I save a lot of money. I just want to have solar on my roof. Or were some of ’em like, you know, Janie Sue, who said, no, I’m doing it to save money. Well, I hope you’re on the 20% and you’re not on the 80% cuz the odds are, you’re not saving money.

I mean, I’m a big fan in that [inaudible].  I want everybody to get it, but at some point, if we are truly looking to have a viable, sustainable marketplace, if that’s truly what we all want, if we truly want an interactive grid, which is which I allow you, you and I get to come onto the grid and produce our own power and use SMUD grid as a giant battery and interact with that grid. If we want all those things to happen, then we need to make sure the grid is stable, which means I need to make, know what comes on the grid and what goes off the grid, which means I need to be able to balance the grid, which means I need men and women on poles and transformers. And yes, I even need people to talk on a phone, there are costs involved in that.

I think what you’ll probably see in the future is a continually move towards, first time of use. Everybody in the country’s gonna go time of use. It’s pretty much a happening thing which helps solar. But it also, you’re gonna see what’s called a deep bundling of rates. You’re say, okay, we’re gonna start pricing the fluid in the can as the fluid in the can. And we’re gonna price the infrastructure to deliver that product as the infrastructure to deliver that product. We haven’t got there yet. Don’t know when we’re gonna get there, but as you’re just as much of an economist as I am probably, I mean, you can’t look at this business model and go, wow, you’re continuing to deliver retail product, but you’re buying it at retail, but yet you’re having deliver. You’re not recouping those costs. It just doesn’t work for a long term solution.

Question is, will we achieve our goal? And I, that’s why I keep pushing on, as long as we have the same goals, then we’re gonna come to the same solution. Some people may come to it before others, but if we want a viable, sustainable marketplace, we want a marketplace that doesn’t need the government to give us incentives. Doesn’t need the utility to give us incentives. It’s just like buying an HVAC. And what the utility does, we incentivize new and groundbreaking technologies. At that point, we don’t incentivize you to go put an air conditioner on your house, but if you wanna put a super hyper efficient air conditioner on your house, that’ll give you an incentive, right? So that’s where we need to be, that person who continually pushes the industry to these next thresholds. And we need to get out of the market base and just into the let’s do cool new technology.