Solar Southwest Florida

As expected, Cape Coral passed the Public Service Tax measure on April 29, 2013. The tax impacts every utility electric customer in the City. The more you use electricity, the more tax you pay.

As I noted in my earlier post, solar energy producers can avoid tax on every kilowatt-hour they reduce or produce with solar energy.

The City of Cape Coral released an online calculator that has a few deficiencies. Most importantly to me is that the calculator ignores solar producing customers using LCEC’s netmetering program (both commercial and residential). If you are a small commercial (non-demand charge) or residential customer with solar electric panels and you have a netmetered account, you pay different rates than standard utility customers. As a result, your tax calculation is different. The City’s calculator only shows large commercial (demand charge) rates, and not small commercial rates.

The good news is that there isn’t much tax difference for netmetered customers, who often pay lower rates than those who don’t produce solar energy. In fact, many residential netmetered customers fall below the 500 kWh tax threshold, so they will pay no tax except tax on the customer charge, or $1.35. Netmetered customers with an energy surplus in any month will also pay just $1.35!

I felt obligated to produce a better calculator that could be used by most commercial and residential netmetered customers who are producing solar energy. This calculator should match Cape Coral’s calculator for residential customers without solar electricity.

If the calculator does not appear below, you may access it directly at: http://szumlanski.com/PST/

Assumptions and Disclaimers: This calculator is based on the 7% Public Service Tax as approved on April 29, 2013 and utility rates are accurate as of May 1, 2013 to the best of my knowledge. SolarSouthwestFlorida and it’s author are not responsible for and errors or omissions in this calculator.  Please use with caution. Results are for approximate reference only. Rounding errors may exist. The City of Cape Coral’s office calculator can be accessed by clicking here.

“How much will it cost to get me off the grid?”

It’s not a bad question. You’re probably just asking the wrong question about solar energy. Why is it the wrong question?

1. You probably don’t want to “get off the grid.”
2. What you probably mean is, “how much is it going to cost me and how much am I going to save?”

You’re not alone – just about everyone starts their journey into solar thinking they are going to say goodbye to the utility company.

Getting “off the grid” technically requires eliminating your connection to the utility grid. The fact of the matter is that running a home or business on solar energy and stored energy alone is usually very expensive, requires quite a bit of maintenance, and may require that you change your lifestyle significantly. You probably want to stay connected to the grid and offset your electricity bill while selling excess energy back to the utility company at a fair price. Does that sound like what you meant to say?

Once we get over this initial clarification about solar energy, the learning process goes much better. There is a chance that you do want to “get off the grid,” or maybe you want battery backup with solar energy instead of a generator. If that is the case, I can certainly help you with that! The vast majority of people learning about solar energy quickly learn that they just want to save money, change the source of their energy, or contribute to a better future for our planet.

Whether you are interested in truly getting off the grid, or just reducing your bills and dependence on utility electricity, I would be delighted to discuss your solar energy needs. Contact me at (239) 574-1500!

The Florida Solar Energy Industries Association (FlaSEIA) is voicing the solar industry’s dissatisfaction with the FPL Solar Rebate program. While touted as successful by Florida’s largest utility and a spectacular windfall for a few lucky rebate recipients, the solar rebate program has been disastrous for Florida utility ratepayers, solar energy contractors, and solar suppliers.

FPL and FlaSEIA are at odds over the FPL Solar Rebate Program

Solar Southwest Florida is in receipt of a series of letters between FlaSEIA’s former President, Bill Gallagher, and Florida Power & Light’s Manager of New Product Development, Oscar Gans. The letters detail results from the latest distribution of 2012 rebate funds, FlaSEIA’s position on the rebate program, and FPL’s response. There is some very important and disturbing information contained in the letters, and based on FPL’s response I am not confident that they share the same sense of urgency about the problems with the program.

There are really three overriding factors in this debate over the program in my opinion:

• The flawed reservation system and procedures that creates an unfair playing field for solar contractors and rebate applicants.
• The rebate amount is seriously out of balance with demand for those funds.
• The program does not accomplish the stated goal, which is to increase the number of photovoltaic energy systems installed in the state.

The Reservation System

Case in point for the flawed reservation system is that one contractor was able to secure 27 of the 119 approved rebate applications (23%). The top three contractors accounted for 50% of the approved applications, and the top five hoarded nearly two-thirds. The top four solar contractors for commercial systems garnered 71% of the business, with only seven other contractors securing one or two approvals. Only 26 contractors (out of hundreds of solar and electrical contractors licensed to do installations) were able to secure any rebate approvals.

The reservation system is an online application process that requires the FPL customer to log into their account and enter system details to an online form. In reality, contractors are asking account holders for their account information so they can have employees fill in the technical data required. The application forms go live at 8:30 am on the application date, and then it’s a race to see who can type fastest.

In the last round of funding, the funds were exhausted in under two minutes and further applications were rejected!

How did some contractors fare so much better than others? It is quite apparent that some have figured out how to use form-filling software to quickly enter rebate applications. While that is not cheating, illegal, or immoral in any way, it puts others at a severe disadvantage and give individuals virtually no chance of success in securing their own rebate approval.

Full disclosure to dispel any thoughts that this is just sour grapes: My employer had 11 people frantically entering rebate applications, and we had two people type fast enough to secure approvals, one of which went through with purchasing a system.

There are other problems with the reservation system, like not continuing to take applications after funds are exhausted so that unused funds can go to the next applicant in the queue. Another problem is not requiring that the applicant have serious intentions of actually going forward with an installation. The main problem at this point is the skewed distribution of the funds – the fairness factor. A lottery process has been suggested by others, but that isn’t a process through which industry members can build reliable and predictable sales (read: jobs).

Supply and Demand

Why did the rebate funds run out in under two minutes? Because the rebate amount at $2 per watt is insanely generous in today’s photovoltaic market. It’s no secret that the price of photovoltaic modules themselves is now under $1 per watt. The total installed price being offered by retailers in Florida is well under $6 per watt, and can be under $4 per watt in many circumstances. The combination of a 30% tax credit and the utility rebate exceeding 70% of the remaining cost in many cases makes the return on investment look like stealing power from your neighbor. There is no reasonable financial argument against installing a solar electric system if you are able to secure a rebate for your home or business.

Unfortunately, the rebate funds are limited, so the number of applications approved (119 in the last round) falls grossly short of the demand.

To put things into further perspective, the State of Florida ran a wildly successful $2 per watt rebate program a few years ago when systems were selling at $8-$10 per watt retail price. Because of the plummeting cost of photovoltaic panels and components over the last few years, it is now cheaper to buy a system without rebates than it was a few years ago with rebates. Even at “those prices” a $2 per watt rebate amount was so successful that the State ran out of funds and ultimately paid many people just 52 cents on the dollar. On a good note, the FPL program guarantees that approved applications will be paid as long as the program standards are met.

The bottom line is that the rebate amount is far too generous. People are reluctant to install a system without rebates when their neighbor received a $20,000 handout from the utility. They are far more likely to roll the dice in the next round of funding and hope for a windfall.

Other states and utilities offer far less generous rebate programs and are seeing huge levels of solar energy adoption. For example, Arizona utilities offer rebates in the range of 20 to 50 cents per watt. The programs are wildly successful and at least one utility has exhausted funding for this year.

You will see in the letters that FPL spent $3 million advertising the solar rebate program. It clearly did not need to be advertised. This amount put toward actually installing solar energy systems would have resulted in 1.5 megawatts of additional capacity for ratepayers, and far more if the rebate amount was in line with demand.

The Goal

The stated goal of the FPL Solar Rebate Program is to increase the adoption of distributed solar energy installation in the state of Florida. This rebate program is effectively capping the installed capacity in FPL’s service area, having the exact opposite effect! If $4.5 million is actually reaching ratepayers as noted in FlaSEIA’s letter, then simple math indicates that 2.25 megawatts of capacity will be installed. As stated above, and proven by ample anecdotal evidence, other ratepayers are not going to proceed without a rebate if they know a rebate program is in place.

To put this in perspective, the state of New Jersey saw 173.8 megawatts of capacity installed in the first quarter of 2012 alone.

Statistically, Florida fell to 17th among states in 2011 for total installed solar electric capacity, down from 8th place, right at the time that FPL’s rebate program came into existence. In the first quarter of 2012, the total capacity installed in Florida was a paltry 2.8 megawatts. This was 14th among states, and only 1.8% of the amount of solar capacity installed in the top ranked state, New Jersey.

FlaSEIA recommends that the rebate amount be reduced to 50 cents per watt, which would result in a four-fold increase in the capacity installed. I believe a more aggressive reduction is in order – 25 cents per watt. I truly believe that and eight-fold increase in installed capacity is possible with today’s current retail price of solar photovoltaic systems and a 25 cent per watt rebate. Furthermore, a small rebate amount will not dissuade ratepayers who are not lucky enough to obtain an approved rebate application.

Conclusion

The FPL Solar Rebate Program is clearly flawed. FlaSEIA, with its limited funding and power, is admirably taking the industry’s complaints to FPL and the Public Service Commission. Moreover, this is a battle for the Florida electricity ratepayer who is willing and able to install a solar photovoltaic system, but is stymied by the process and conflicted over whether to proceed without a rebate handout. The fact of the matter is that Floridians were installing solar energy systems in larger quantities while systems were sold at higher net costs before the rebate program came into existence.

Am I asking for the rebate program to go away? Certainly not. I do believe utility rebates encourage the adoption of solar energy. Unfortunately, because of the way this program is being administered, and the supply and demand being so far out of whack, FPL’s implementation is having disastrous results on the industry (jobs), and is having the direct opposite effect as the stated goal.

The series of letters can be viewed here:

FPL Letter May 29, 2012

FlaSEIA Letter July 30, 2012

FPL Letter August 14, 2012

Most people are surprised to learn that a typical solar photovoltaic (electric) system does not provide power when the utility company electricity goes down. Most solar photovoltaic systems are grid-interconnected, and in a way, grid-dependent. Due to the variable nature of solar panel output, having power during utility outages requires a battery.

Let me say up front that batteries are relatively expensive, dirty, dangerous, short-lived, inefficient, heavy, and big. That’s why I typically don’t recommend battery based solar energy systems. However, I was reminded recently that I should listen to our customers and understand a little better what their goals are. There may be a good application for battery technology in many circumstances. For example, I shouldn’t dismiss a customer who just wants to have their refrigerator powered by solar energy. This may be a great fit for solar energy!

Boats and RVs have been using 12V or 24V DC refrigerators for many years, and some models can be extremely efficient. What if you could have a small refrigerator with one or two solar panels and a few batteries. Perhaps this would fulfill the essential refrigeration functions required during and after a storm. I could be done relatively inexpensively and be made reliable with proper system design.

An expensive part of a battery based solar energy system is the electronics to convert the solar panels’ DC energy to AC energy for household appliances and lighting. System design, engineering, permitting, and wiring (or rewiring) also add substantially to the cost. If you are able to identify clearly what you want to power during an outage, it can make a battery-based solar energy system a much more cost effective and reasonable solution.

You can do just about anything with a battery based solar photovoltaic system – for a price. Once you break it down the the real essentials, the concept becomes a lot more feasible. I’m ready to hear your battery backup needs, and I promise I won’t be so quick to dismiss the idea!

The most complex financial analyses that solar dealers need to perform are for grid-interactive solar electric systems. The number of variables makes an accurate and reliable analysis difficult to provide to potential customers (investors). However, there are plenty of models out there to give us an idea of the realistic investment returns a system owner can expect. Some are simplistic, while others are tremendously sophisticated. The key is to ensure that the inputs are realistic and accurate.

The first kind of analysis, the one that most people ask for, is the payback. Many people, myself included, are critical of this metric, primarily because it is not intended to measure the type of investment profile provided by a solar energy system, and the result is not particularly useful unless put into context. Unless you are comparing this metric to another investment option with similar costs, term, and risk, the results can be misleading. In addition, the concept only works for investments where there is a single cash outlay at the beginning of the investment with a simple stream of cash returns. You cannot calculate the payback for a system that is financed with no money down, because there is no single initial cash outlay.

What is the payback on a 10-year CD? The answer is 10 years – the stream of cash flows from annual coupons will never come close to paying back the initial investment. The investment is only paid back when the principle value is returned at the end of the term.

Many people gladly invest in CDs with 10 year payback periods, but balk at the thought of a solar energy investment with a 7 year payback. The context is not the same, and it illustrates why payback is not a reasonable metric to use, at least on its own, in deciding whether to invest in a solar electric system. Many solar models available will provide a payback period in number of years and months, and I don’t understand why.

The more important factor in deciding whether to invest is the return-on-investment (ROI) as commonly measured by the internal rate-of-return (IRR). Alternatively, if the cost of capital for the investor is well known, the net present value (NPV) can be used to compare investments or determine whether to accept the investment. The NPV is the dollar value at which IRR equals zero. The higher the NPV, the better in comparing investment alternatives. Void of alternative investments, a positive NPV project should be pursued, depending on risk and investment horizon.  Similarly, the higher the IRR, the better, and as long as the IRR is higher than the cost of capital, the project is “profitable.”

That’s all a bunch of finance-speak I picked up in school. We need to break it down to what the average homeowner is likely to experience in terms of the investment value. We need to make many assumptions and determine reasonable ranges so that we can see how each variable impacts the investment decision (sensitivity analysis). The assumptions we make include:

• The cost of utility electricity in the future.
• Rebate and incentive amounts and time of receipt.
• Degradation of solar module performance.
• Future maintenance costs.
• Future tax rates.
• Cost of capital on variable rate financing.
• Inflation rates.
• Salvage value.
• Future utility regulation/deregulation.
• Cost or benefit of waiting to make investment.

What we know for certain is:

• The price being offered for the installation of the system.
• The cost of utility electricity today.
• Individual tax rates today.
• Cost of capital on fixed rate financing.

What we have a fairly good idea about:

• The average cost of utility electricity the system can be expected to offset initially.
• The warranty on the system components.
• The longevity of the system.

Obviously there are a lot of factors at play. We can use historical data to narrow the risk in making assumptions. However, we also need to look at the future possibilities that cannot be determined by the past alone. For example, what do you expect your tax rate to be in 15 years? If you expect to be making more money and enter a higher marginal tax bracket, the cost of paying for electricity with after-tax income becomes greater, and reducing your utility electric bill would be very smart. If you are entering a period of fixed or reduced income, you may lose out on some of the tax benefits, but you may also be subject to higher risk of inflation and escalating utility electric rates, making the stability of low or no electricity bills very attractive.

A solar financial analysis will give you a good idea of what to expect from an investment in a solar electric system. Just like any investment analysis, assumptions are made and there is a degree of risk involved. Fortunately, many of the factors make the investment less risky than alternatives, and a good case can be made for solar electricity more often than not. When looking at this type of investment consider your current situation, your future scenarios, and the comparative risk of a solar investment. Don’t use payback as a deciding factor without putting it into context. Use return-on-investment as a comparative metric versus other investment alternatives with similar risk profiles and time horizons.

Regardless of what you decide, know that a solar electric system will provide a reliable source of energy production to offset you utility usage, which is the same thing as saying you will have a reliable after-tax stream of income for the next 25+ years!

The price of residential electricity has historically trended upwards despite routine promises of future innovation resulting in lower energy prices. Based on the linear trend, electricity in 25 years will cost about 50% more than it does today. At a 3% annual increase, typical of expected inflation rates, electricity would more than double in the next 25 years. In other words, a $150 electricity bill today will be over $300 in 25 years!

Florida Historical Residential Electricity Prices

What if I told you that you could prepay for 25 years of electricity at well under the current price of about 11.5 cents per kilowatt-hour? Wouldn’t that be a smart financial move and a great hedge against rising future energy costs? Whether you expect to be on a fixed income, want to improve your future quality of life, or are looking for a solid return on your investment, I have a solution for you.

Solar electric (photovoltaic) systems have come down in price so substantially over the last 3 years that, with available incentives, the levelized cost of electricity produced by the system over the 25 year warranty period can be well below the current cost of electricity. If you have the money to install a solar electric system and a suitable roof, it is completely reasonable (and profitable) to install solar electricity on your Florida home today!

FPL has announced that the remaining 2012 solar rebate funding will be released on May 3, 2012 for solar photovoltaic (electric) and solar water heating systems.

If you want any chance of getting in on the best solar rebate in Florida history, you need to act NOW. Call your favorite solar contractor (hopefully Fafco Solar) and they will walk you through the application process. Because the rebates are highly competitive and the amount available will be very limited, it is likely that the funding will run out in the first 10 minutes. The online application process requires advance planning and detailed information about the system you intend to install.

FPL Solar Rebates can cover over 30% of the cost of a solar electric installation up to $20,000 for residential and $50,000 for commercial systems. Paired with a 30% Federal Tax Credit and the lowest component costs in history, the total installed cost of a solar energy system has never been lower.

Utility electric rates in Southwest Florida vary quite a bit depending on how much electricity you consume. I created a spreadsheet to calculate what your utility electric rate would be with different utilities depending on the amount of energy consumed.

What you will find is that the effective rate for LCEC is higher for typical residential customers because of the higher fixed customer charge. Another interesting fact is that LCEC netmetered customers with solar electric generation pay more that regular LCEC customers until they consume at least 1,342 kilowatt hours (net). Again, this is because of a higher customer charge.

The rates are current as of April 16, 2012 and include all charges, fees, and taxes.

Note: The Franchise Fee will vary by municipality. I have used 3% to provide a reasonable approximation and comparison. For example, the Lee County fee is 3% and the Cape Coral fee is 3.173%.

SWFL Utility Rate Comparison

Southwest Florida Utility Electric Rate Spreadsheet (Requires Excel 2007 or greater)

The Solar Energy Industry Association (SEIA) reported that Florida dropped from #8 in 2010 to #17 in 2011 for the amount of solar electricity capacity installed. In addition, total installations decreased by 60% from 35 megawatts to 14 megawatts.

Why the big decrease? It’s my contention that the FPL rebate program is stifling the market. That’s right – a rebate intended to encourage solar energy installation had the opposite effect!

The interesting thing is that solar prices have never been lower, even without a rebate involved. The perception about solar needing rebates to be successful is an outdated notion. Getting this message out is on the shoulders of the solar industry, but our reliance on rebates over the years has misplaced our focus.

Let’s hope that we can make a better showing in 2012!

For those of you who don’t know, the largest utility in Southwest Florida, FPL, is giving away money – lots of money! If you ever had an interest in solar panels, NOW is the time to act. There is money available for solar electric systems and solar water heating systems, and combined with record low prices on solar panels, this is an amazing opportunity. The program is a huge success, but I want to talk about how FPL can improve the Solar Rebate Program, especially the rebate for solar electric panels.

FPL is offering $2 per watt of installed system rating with a residential limit of $20,000 (for a 10 kilowatt system). Smaller systems qualify for the same $2 per watt rebate amount. Most homeowners install around 5kW and receive a $10,000 rebate. How can this be improved? REDUCE the rebate amount!

What?! Huh?! No – don’t say that!!! You’re in the solar business!

Stay with me here as I explain. The first round of rebate funding ran out in under 15 minutes. That’s how much demand there was. That’s how unbelievable this deal is. That’s great, but there are some serious downsides to the program as it stands:

• Only 310 lucky people received a rebate reservation in the first round of funding.
• The first-come first-served system isn’t really fair – it benefits mainly people who can type their application fast on the FPL website. With this level of demand, a lottery would be a more fair distribution of funds. (Note: a lottery could have negative consequences for solar dealers who would not be able to predict future business.)
• Solar contractors must race to get all of their sold systems installed in a 90 day window to have the rebate paid, then there is almost no work for the next 9 months. Who is going to buy solar without a rebate if they know one is right around the corner. This makes it very difficult for qualified solar installers to stay in business and employee people year-round.

If the rebate program can “sell out” in under 15 minutes to 310 customers, how long would it take to sell out at $1 per watt? 50 cents? 25 cents? How many more people would install systems?

If FPL’s goal is truly to get more installed solar capacity in Florida, they would get the best bang for their buck by reducing the rebate amount to maximize the amount of solar electricity installed! Under the current scenario, FPL actually reduces the amount of solar energy installed in Florida, and essentially controls the market. They can predict quite well how much solar will be installed in a given year, and maybe that is their intention. The math is quite simple – if they devote half of the $15.5M annual program budget to photovoltaics, somewhere around 3.75 megawatts per year would be installed and interconnected to the utility.

Imagine the impact if the rebate amount were reduced. I’m willing to bet that if the rebate amount were cut to 50 cents per watt, 1/4 of the current amount, that four times the number of systems would be installed, especially if the installation window were increased to 9-12 months. This would help bring much more solar power to the utility’s system, and would keep solar dealers humming along installing systems year-round, employing more people and creating a greener future for everyone in Florida.

What is FPL’s motivation? What constraints exist from the Public Service Commission approved program? I don’t know all of the answers, but I’d sure like to hear from FPL about my proposal!

I recently set up a Wattvision meter on my Fort Myers, FL home to evaluate its effectiveness. I have to say, I love it! It definitely clues you in to how much energy you are using, when you are using it, and what appliances cost to operate. The device pays for itself by identifying power hogs. For example, I cut down the time my pool lights come on each night because they were consuming 600 watts! On the other hand, I decided to run my fountain longer each day because it uses next to no energy.

The charts on the Wattvision website are excellent. You can view real time, hourly, daily, and monthly data, and can download raw data to use in spreadsheets for further analysis. Take a look at this chart from last Monday.

What can you learn from the chart? Here is my analysis of what happened on Monday (list numbers correspond to numbers on the chart):

1. The baseline load for my home is around 400W at night when we are sleeping. This energy goes to digital video recorders, chargers, TVs, coffee maker, and other appliances that draw a small amount of energy constantly, plus some outdoor landscape and security lighting. The little bumps show the times when the refrigerator is running.
2. The water heater starts up about 4-5 times a day just to keep the water in the tank hot. Around 6:00 am we got up, took showers, and got ready for work. We used a substantial amount of hot water, and the water heater ran for a long period of time, costing us about 50 cents per hour of operation. Around dinner time the water heater worked during cooking and dish washing, and came back on as we got ready for bed.
3. My variable speed pool pump is scheduled to run at low speed from 9:00 am to noon, and again from 2:30 pm to 5:30 pm.
4. The pool pump ramps up speed from noon to 2:30 pm to give the automatic cleaner time to work and get adequate pool filtration.
5. The baseline during the evening increases as we use lights, watch TV, and use computers. The fountain and outdoor lighting also comes on at dusk.

My New FPL Smart Meter

FPL is in full swing installing Smart Meters around Southwest Florida.I had mine installed last week, but the communications network is a work in progress, so there’s no benefit to me yet. Despite all of the complaints and fears about Smart Meters, I believe the benefits will be great, allowing a granular look at your energy consumption down to your hourly usage, all available from FPL’s website. It’s not as good as some of the energy monitors on the market that can give you a per-second look at your consumption, or even monitor individual appliances or circuits, but it will provide significant insight into your electricity usage.

Some claim that the meters are bad for our health, are inaccurate, or disorient bees. Seriously!

I’m not going to make a call whether some of the claims out there are accurate, but I can tell you one thing for certain – understanding your energy consumption by learning when you use energy is key to reducing your utility bills. As my father-in-law says, “just like a business, you can’t manage energy without an accounting system.”

Unfortunately, those with solar electric systems that are under a netmetering agreement will not get the new smart meters. It is unclear whether the meters are bi-directional, or whether FPL or the manufacturer just hasn’t tested the accuracy measuring energy fed back to the grid. I’m trying to get clarification on that matter from FPL and will let you know if I hear back from their netmetering department.

Here’s a video from FPL about the new Smart Meters:

I guess I’ll weigh in on the highly publicized FPL rate increase request that would add about $7 to each residential account’s monthly bill starting in 2013.

FPL representatives say that the increase will pay for increased costs of doing business and a new “efficient” natural gas fired plant. The increase amounts to $695 million per year. Expected savings from the new plant – $600 million over it’s LIFETIME!

Does something seem very wrong here?

The problem with a public utility is that they are entitled to make a net profit, but that guaranteed profit is a percentage of costs. Costs increase, profits increase. There is no incentive to keep costs in check when you can go back to your customers and get a government mandated bailout from them!

Unfortunately, this is not a rate hike, so there is nothing you can do to avoid it by reducing usage or producing your own power. They want this amount added to the monthly customer charge, which is a base cost before you even start using power from the utility. This directly impacts solar energy sellers (netmetering customers), as they would likely be forced to pay this additional cost even if they consume no net power from FPL. On the other hand, that could just create more of an incentive to reduce the usage part of your bill with solar energy.

In my previous post about plug-and-play solar panels, I discussed the realities of this technology in terms of current product offerings. The US Department of Energy just released a request for information from parties interested in developing plug-an-play technology.

The US government is about to spend up to $30M of taxpayer money to partially fund development to make this technology viable under the “SunShot Initiative.” The idea is to make solar electricity economically viable without incentives and make installation as easy as plugging in a TV. In other words, they want to put solar electric contractors out of business.

That last comment was a bit facetious, but it would have that effect. Fortunately, or unfortunately depending on what side of the fence you are standing, I don’t see it happening. Solar electricity is no less dangerous than electricity from the utility company. In fact, it’s more dangerous to handle in some ways. The concept of an appliance that simply plugs in is very nice in theory, but in practice is much more complicated.

When household generator backup became more popular in Florida over the last few decades, there were many fires and deaths attributed to people trying to connect the generator output to their home using an electrical outlet. Similarly, connecting a generator to your circuit breaker panel is extremely dangerous without a proper transfer switch to protect both the household wiring and utility line workers that are repairing systems during an outage. The difficulties with the plug-and-play solar panel concept are similar in many ways, with the added complexity of physical mounting of panels on a roof or ground rack.

In any case, a licensed electrical contractor is going to be required to make a home ready for any future plug-and-play technology that is developed. The physics involved with a standard electrical outlet will not allow safe operation of parallel sources of power on existing wiring systems. It’s like trying to fit four lanes of traffic on a two lane highway. It’s not going to work – at least not safely!

The SunShot Initiative seeks to remove some of these barriers through new product design, standardized connectors, utility and building department cooperation, and building/electric code changes. Regardless of what innovations come out of this project, don’t expect solar panels to be available at your local retailer that you can take home and plug in without some sort of major upgrade to your existing electrical distribution system.

Hopefully there will be significant cost reducing technologies that come out of this initiative. We very well may be able to reach solar cost parity with the utility in the next decade, with or without this project, and without turning every homeowner into a solar installer.

The full text of the RFI can be found here:

DE-FOA-0000634: Plug and Play Technologies and Systems Request for Information (RFI)

You may have seen the promise of plug-and-play solar panels coming to a store near you. I’ll try to make sense of these “new” products and tell you what they will and won’t do for you. There are two kinds of “plug-and-play solar panel” promises floating around out there. There is the solar panel that you can plug into your house and use or sell back to the utility, and there is the solar panel system into which you plug devices directly.

The first “plug-and-play solar panel” product promises that you can plug your solar panels into an existing outlet and feed power back into your home. This is completely unsafe and will not meet any building code in existence. This would require that the system have a male plug that you insert into the outlet. Guess what – that plug with exposed metal conductors could have live power on it (unless the inverter is listed to UL 1741 – let’s not get too technical here!) Even if the proper inverter were used, there are numerous National Electric Code sections that would not allow its use in this manner. No utility company would allow this power to be sent back to the grid. This is not an approved interconnection method, and it is completely unsafe.

Consider that you have a 15 amp circuit breaker feeding a string of outlets in your home. The wire and outlets on that circuit are capable of safely supplying 15 amps of power. If you plug a solar panel’s output into an electrical outlet, you have increased the amount of power available to that wire and all receptacles on the circuit. Furthermore, there is no way to restrict the number of solar panels that a homeowner would plug into a circuit. The homeowner could theoretically install dozens of solar panels into power strips on a single circuit. Hopefully the closest fire station is close by…

The second kind of “plug-and-play solar panel” is really nothing more than a complete mobile off-grid solar electric system. The components include a solar panel, an inverter, and possibly a battery. With this system you can plug devices directly into the inverter output using a standard AC receptacle. There is nothing wrong with this concept, except that it has serious limitations in usefulness, efficiency, and value.

A new product of this kind from Onyx Service and Solutions Inc promises to revolutionize plug-and-play solar. There is really nothing new with this product except that it is larger and higher powered than most other portable solar power devices. I use the word “portable” loosely here because it’s hardly something you can pop in the trunk for an afternoon outing. The included 330 watt solar panel is at least five feet long by three feet wide. The premise of this product is to include a solar panel, a battery, and an inverter in a single box with a standard AC outlet. That’s great, but the amount of power generated and stored isn’t even enough to run a laptop computer for 24 hours.

This system cannot be attached to your home’s electrical system and it cannot sell electricity back to the grid. Don’t be misled!

This type of product is fantastic for small power needs, like charging phones, tablets, or other small devices, or using some higher powered devices for shorter periods of time. They key is to make it portable enough. There is a nice consumer product line from Goal Zero that is perfect for modest power needs, and it does exactly what the Onyx system does, albeit on a much less powerful scale, but it is truly portable.

The promise of “plug-and-play solar panels” is a long way away. There is hope. The best opportunity for a plug-and-play type system may be using a transfer switch similar to the generator input to a home. One thing is certain – you will need to upgrade your home wiring or provide a proper receptacle that in some way makes this type of installation safe, and it will need to be done under the current or future requirements of the National Electric Code.

The best bet in solar electric today is still the basic grid-interactive solar electric system. Don’t be misled by promises of new revolutionary products that can’t deliver. If you want a portable consumer grade solar energy system, educate yourself on the limitations, and if it meets your needs, by all means, proceed!