Solar, so close...

by Peter Seidman - Pacific Sun Staff
A group of Marin residents interested in installing solar-powered electric systems in their homes could wind up as part of a community power grid that would cut greenhouse gas emissions in the county by a vast amount.

"I moved to Marin County, and I saw all that sun, and I was blown away by the fact that not many people had solar on their roofs," says Lisa Max, founder of GoSolarMarin. The idea of solar homes interested Max in part because when she and her husband moved here from Washington state, they wanted to find a house that would be a good site to install a solar electric system. "When I got the first estimate for what it would cost, it was a real eye-opener and explained why people hadn't done it in droves."

Max sent out a flyer in her San Rafael neighborhood to see whether other people might be interested in installing solar systems. If they were, she reasoned, maybe they could pool their collective desire and get a discount. Max, a member of Sustainable San Rafael, found interest beyond her immediate neighborhood. She contacted her local neighborhood association, and then associations in other neighborhoods. When GoSolarMarin held its first meeting in September, 65 people arrived, says Max. What she calls "a core group" of volunteers then got to work crafting a request for proposals from solar companies.

The group asked solar companies to come in with their best bid, a discount actually, for installing a significant number of systems in the county. The group also asked companies about the geographical area where they would offer their discounted systems. That turned out to be a critical issue for GoSolarMarin and for SPG Solar Inc. of Novato, the company that will install systems for GoSolarMarin through February 2008. (When this deal ends, says Max, GoSolarMarin may begin another round with another request for proposals.)

The GoSolarMarin plan was inspired in part by a similar move in Portola Valley, which last year started one of the first large group-buys of residential solar systems. In the GoSolarMarin request for proposals, the group asked companies to bid based on the total kilowatt-hours of installation rather than the number of homes that received systems. In other words, a company would base a bid on an installation of between 5- and 149-kilowatt hours. The price would be less for an installation of more total kilowatt-hours. That way, if one home installed one large system and other homes installed much smaller systems, their discounts would be the same percentage of their individual costs.

That distinction is significant because Max discovered that solar companies often offer a bonus reward to customers who sign up other customers for an installation. Some companies suggested that was the best route toward discounts. But, says Max, that's not what she wanted. In the bonus system only the first people who install systems have the opportunity to sign up many new customers. The next group of people has a smaller pool of prospects, so they have a much lower chance of getting bonuses. If it sounds like a pyramid scheme, it is. That led Max, among others, to decide that a discount based on the quantity of kilowatt-hours is a more equitable distribution of the benefits of the economy of scale.

After the initial effort, 78 families said they were ready to participate in the discount plan. About 300 families expressed interest in the idea, says Max. The discount so far is nothing to sneeze at. SPG Solar says it will install solar systems for GoSolarMarin for $7.94 per watt, at least through February. That compares with an average cost of $9.29 per watt, according to SPG Solar.

Although the SPG bid wasn't the lowest, Max says it was "the cleanest." She means it contained the least wiggle room for add-ons, things like the cost of installing scaffolding and the framework needed for solar panels on a flat roof. One other key element put SPG in front of the other companies that submitted proposals. SPG said it would install systems at a discount throughout the county. Other companies said the deal was good for just the Highway 101 corridor and its main arteries in eastern Marin.

SPG told Max she can install a 5-kilowatt system for about $27,000. That figure includes state and federal subsidies and tax credits. The state subsidies are great, but they are declining, meaning anyone who wants to go solar has an incentive for moving as quickly as possible. The state last year launched a $3-billion California Solar Initiative to distribute rebates for solar power. The amount of the rebates is declining as the state dips into the solar fund. When the program started, the maximum rebate for a $36,000 4-kilowatt system was $10,000. Now the rebate for the same project is about $8,800, and that amount will continue to decline.

But there's hope for residents who want to reap the benefits of the GoSolarMarin discount even if they have yet to secure the necessary funds. If a homeowner signs up with SPG to install a system, the company will begin the paperwork with the state, and the homeowner will qualify for as high a rebate as possible at the current levels. The homeowner has one year to begin construction.

Homeowners recoup the cost of installing solar systems, although it takes time. It's not crazy to suggest that in the future homeowners who install solar systems actually could make an even better return on their investment in the long run by selling energy to a power authority. And that's where community choice aggregation comes into play, at least in this scenario.

The county is spending about $300,000 to study whether and how community choice aggregation could work in Marin. Community choice would allow the county to purchase electricity directly from generators. Residents and businesses in participating cities would then buy their electricity directly from a local joint powers authority, rather than from Pacific Gas & Electric Co.

The current plan isn't the first time electricity customers have had the opportunity to choose the source of their energy. After California deregulated electricity in 1997, individual ratepayers could pick their power providers, but the state suspended that right after the electricity crisis of 2000-01.

The state Assembly created community choice aggregation in 2002 as a compromise that allows cities or counties to opt out of utilities while avoiding the free-for-all of deregulation. Communities across the state have been investigating the community choice aggregation possibilities.

Many municipalities are attracted to the idea as a way to save money. Historically, public utilities have been able to offer electricity rates that are 15 to 20 percent cheaper than investor-owned utilities, according to the state Local Government Commission. An April 2005 study by Navigant Consulting suggested a community choice program would result in long-term electricity cost savings and a higher level of rate stability for Marin customers. Whether the program would save Marin ratepayers money depends on a host of factors, including the cost of fuel and the number of cities that agree to participate.

In Marin, an energy task force has been working on the permutations of community choice for the last few years, and buying clean energy has been a major factor in deliberations. On December 6, the energy task force will "finish its discussion of staying with the status quo versus any risks with going with [community choice]," says Marin Supervisor Charles McGlashan. The task force also will provide direction to county staff to complete a business plan for a community choice model.

Or models, actually. One model follows an "all green scenario," says McGlashan, based on "a default rate structure" that provides power that's all renewable. A second rate structure would provide power that's 50 percent renewable. And lower-income individuals would qualify for a lifeline rate that would provide power from the least expensive sources. The cost of providing power in a community choice system always has been an issue. The rallying cry for many community choice proponents across the state is, "Keep it at current rates or below." The new idea here, however, is to offer residents the opportunity to buy into the 100 percent green-power alternative. Using all renewable power may require a 5 percent premium to reap the renewable, low-emission benefits.

But the benefits could be astonishing. If the community choice program proceeds, and if enough cities along with the county join a new Marin power authority, the county could reach its target to reduce greenhouse gas emissions in the first year of the program. "We would be 15 percent below our emissions level of 1990 in that first year," says McGlashan, "and then we can move on. We will have done the great U-turn."

In addition to the benefits of reducing emissions and using renewable energy, community choice also could spark economic benefits in Marin, notes McGlashan and others intrigued by community choice. In addition to buying power from green sources outside the county, a local community choice program could offer homeowners an opportunity to become part of the green-power grid. Organizations like GoSolarMarin could work with a new power authority, which would sell solar systems to them at a reduced rate in exchange for receiving from them a flow of homeowners' excess solar power. Another option includes renting solar panels to homeowners at a reduced rate in exchange for receiving some of their solar-generated electricity. (Max notes that if enough people join the solar movement, local solar companies could get a discount from their parts suppliers, resulting in an even larger discount for end users.)

After the December 6 meeting, the business plan for a community choice plan in Marin will enter its final stages, and by March it should be ready to go out to the cities and the county for approval or rejection. To become reality, a community choice plan needs at least three key entities: the county, Novato and San Rafael. They include enough residents--and ratepayers--to make the plan work on a minimum level. The cities and the county will have until next fall to vote whether to become members of a new Marin power authority. Max says she has sent letters out to cities in Marin asking them to continue the effort to reduce or eliminate fees for installing residential solar.

McGlashan says he's "cautiously optimistic, more than two years ago." That optimism stems in part from a continuing scrutiny the county and the cities are giving the community choice idea, which has survived all challenges in terms of possible threats to its practicality. Politics is another story and will be the next chapter in the community choice saga.

News that Berkeley has begun a financing plan to help its residents install solar electric systems is another of many reports from communities across the state interested in solar, and interest in community choice is just as strong. The confluence of energy flowing from residential solar panels into a community choice power grid represents what may be the most democratic and practical possibility for residential solar in cities across the county.

The strategy behind GoSolarMarin "is an important concept that other communities already have embraced," says Kiki La Porta, president of Sustainable Marin. "We think that participation in [community choice] will be the single most effective broad stroke to reduce greenhouse gas emissions in the near term. As the business plan process progresses, we think more and more good news is coming."

An indication might be the experience of San Joaquin County, which is about two years ahead of Marin in the community choice process. Keeping energy costs down is the primary goal there. Community choice gave the county an opportunity to receive power at a 5 percent cost reduction. And, says McGlashan, "in their bids from power companies, [the county] had an excess supply of 1,400 megawatts of green power that they didn't need. We only need 250 megawatts to run our county on green. The energy is out there. We just need to get organized so we can go get it."

For information about GoSolarMarin, contact Lisa Max at 415/847-0900 or gosolarmarin@yahoo.com.

Contact the writer at peter@pseidman.com