Our big takeaway from SEIA’s latest Grid Modernization report: Utilities need to step up

electrical grid modernization

The Solar Energy Industries Association (SEIA) continues its in-depth look at state-level efforts to modernize the electric utility grid with the fourth paper in the series, Getting More Granular: How Value of Location and Time May Change Compensation for Distributed Energy Resources. The focus in this one is ways in which utilities can more effectively operate on the grid.

“When states develop fair compensation mechanisms for distributed energy resources (DER), the result is a modern electric grid that better serves the needs of all its customers,” said Sean Gallagher, SEIA’s vice president of state affairs. “The case studies highlighted in our report can serve as a model for other states interested in grid modernization and the economic benefits that result.”

We recommend reading the whole thing, which you can access here: SEIA-GridMod-Series-4_2018-Jan-Final_0

Our two cents per kW

Our big takeaway is just how imperative it is for utilities to be more transparent with their data, forecasts and calculations. We need to get more voices in the room to offer solutions. What locations in an area need which specific upgrades? For what time of year? For what time of day?

We all already know utility transparency is an issue (improved so much through UtilityAPI), but when the possibilities for grid modernization are laid out as SEIA has done in this series, the lack of transparency seems more inexcusable than ever.

Our favorite concept from the report, as an example:

Locational value can be used to guide resources to high value locations. Utilities can create, and should publish maps showing the specific locations of any needs on the distribution system, the specific grid constraints to avoid the need (e.g., high loads during hot late summer afternoons), and the value of the avoidance in terms of dollars per amount of capacity. If a developer knows in advance that there will be a utility solicitation for the identified needs, it can begin seeking customers or project sites in anticipation of the opportunity to bid in its projects.

The report continues in that section to lay out a basis for compensation:

In addition to competitive utility solicitations, there are alternative means of providing targeted tariffs, programs or incentives to drive DER to locations to meet identified needs. If identified needs are too small or have too short of a lead time to be met through a competitive solicitation, the utility could have a tariff- or program-based mechanism that can step in on short notice.

For example, voltage issues are often very isolated and managed with small utility investments. However, smart inverters are increasingly being deployed widely and can be used to provide voltage management services in the locations where a utility has challenges managing voltage within an acceptable range.

In addition, tariffs enable customers of all stripes to adopt solar and other DER, which delivers the generalized grid benefits we discuss, but also ensures that a state’s clean energy market grows equitably in a manner that distributes the social, environmental, and economic benefits to all ratepayers. This is an emerging topic and it is expected that California’s Integrated Distributed Energy Resources proceeding will explore non-solicitation based sourcing mechanisms.

So, there needs to be more transparency for developers and engineers to jump in and propose solutions, but there also needs to be more general transparency for the public to better understand how electricity gets to their house, what exactly it costs, and what alternatives could look like. Each small decision is super complicated, but zooming back out and considering the broad strokes from the point of view of an actual home owner would be revealing. Jamal Homeowner, an outside observer, is plainly presented with plain insight into how exactly the grid functions and what the utility business model is, and also presented alternative plans for what it could be. Remember, this whole monopoly exists in his best interest, allegedly. What would he think?

Well, I can’t speak for Jamal, but I can’t help but be confused. Why we aren’t doing this already? How is what SEIA lays out in this report not the expectation? If you started the grid from scratch in 2018, knowing what we know, and with the technology we have, there is just no way you’d arrive at the current arrangement and business model. Having utilities prioritize DER with the same long-term, capital intensive strategizing that they apply to their current approach, could be the most impactful U.S. innovation this century.

Anyway, there is a ton more in that report and the series overall. Be sure to check it out.

— Solar Builder magazine

Podcast: How to sell solar in the Midwest with Inovateus Solar President TJ Kanczuzewski

Inovateus solar buzz

Outside of the solar hotbeds on the coasts, a solar company might need to be even more passionate to succeed. Inovateus Solar, for example, has carved out a sizable solar development market in the Midwest – a journey that has required a ton of customer education and a deep corporate belief in the mission of advancing renewable energy. We stopped by the company’s South Bend, Ind., offices to chat with President TJ Kanczuzewski about how they’ve done it, the book he wrote about it, the role of solar + storage going forward and the company’s new energy fund.

Listen (or subscribe!) at the bottom of this post. Here are some highlights:

First important note: I successfully pronounce TJ’s last name.

We start with TJ’s book, Building a Brilliant Tomorrow, and dive into the history of the company, which I find fascinating for how nimble Inovateus has been — never settling on one business model – but always staying true to its core purpose of pursuing solar business, wherever that leads them. This mission started with TJ, after he left a large company to pitch his dad on a wacky idea he had for expanding his company into solar.

“I didn’t get a sense of purpose working for the second largest mall owner-operator in the country,” he says. “I wanted to do something meaningful … and renewables is something our country needed and was something I was passionate about.”

This is the passion that was needed to jump start a dormant solar market in the middle of the country.

“We are solar evangelists,” he says of the company’s approach. “Sometimes we are just meeting with someone, establishing a relationship and teaching them about solar, and it might take 3, 4, 5 years before they do something, but when they are ready and looking for information, they’re going to call us up.”

This brings us into meta topic of “the psychology of renewables” which undergirds this entire business strategy.

TJ’s hot take: Not enough people working in solar practice what they preach. “I wanted to drive an electric car so that I could think like someone who drives an electric car.”

Our second favorite term after solar evangelist: Professional opportunist.

“We have to be professional opportunists because of where we are located. If a job pops up, we have to go after it whether it’s small or large.”

Finally, as usual on the Solar Builder Buzz, drinking a beer leads to an actual segue to solar business discussion, including why solar + storage, in more and more cases, is creating a better investment opportunity than just solar on its own. This leads me to get excited and fumble my way through a retelling of why our Project of the Year for 2017 was so awesome. Do yourselves a favor and just read what I wrote on it here instead of listening to me babble.

We end with some news on a new energy fund the company is launching. TJ also references a Michigan State carport project, which we covered here, and in this feature we did on the carport opportunity in the market.

— Solar Builder magazine

10 predictions for community solar in 2018 via Clean Energy Collective

Clean Energy collective

From an evolving market structure to technology innovation, the community solar landscape is transforming quickly. What does this mean for 2018? Clean Energy Collective (CEC), the nation’s leading community solar developer and solutions provider, forecast what is on the horizon for community solar. CEC’s experts offer the following 10 predictions for 2018.

“We are inspired by the surging demand for renewables and the expectation that community solar will play a leading role in solar’s growth for years to come” said Paul Spencer, CEC Founder and CEO.

1. Strategic partnerships will accelerate the drive to scale.

2017 saw solar financiers and asset owners looking to become more involved in the earlier stages of community solar development, seeking the potential for stronger profits indicative of this asset class; evidenced by CEC’s joint development agreement with ENGIE. Leveraging shared financial and technological resources will accelerate the development and deployment of more and larger community solar portfolios in 2018, broadening access to shared renewables to a significantly wider customer base.

2. External factors will intensify the focus on cost-effectiveness.

Equipment costs are continuing to fall, but declines are slowing. Rising interest rates, rising interconnection costs, potential import tariffs, and potential changes to the federal tax code will provoke an even greater focus across the solar industry on optimizing program design, integration, and management to maintain community solar’s pace of growth. (See #4 regarding technology.)

3. Commercial and industrial customers will take a larger share of capacity.

Solar procurement by commercial and industrial customers grew substantially in 2017 as more businesses looked to renewable energy for cost savings and to boost their sustainability credentials. One of the most critical strategic initiatives for utilities is allowing key C&I customers to procure renewable energy from a dedicated offsite facility/program via community solar. Like residential customers, shared off-site generation expands the accessibility of renewables purchases beyond the Fortune 100 to medium and small companies that lack the resources for separate project development. In 2018, community solar will take a lead role in providing commercial and industrial companies with a path to renewable energy.

Nexamp community solar

Nexamp community solar project.

4. Demand for technology will increase from both asset developers and owners.

2017 saw effective progress toward reducing the complexities of community solar programming by standardizing policies, procedures, and technologies where possible. Enterprise-level software opened the gates to greater efficiency and accuracy throughout the proposal, e-commerce, and customer engagement processes. For 2018, the integration of multi-megawatt projects and portfolios means integrating with significantly more utilities and engaging an exponentially larger number of customers. The biggest winners in 2018 will be IT solutions that seamlessly manage customer acquisition, credit allocation, and collections with lower costs and less risk through automation, not only for single community solar programs but for entire energy portfolios. CEC is investing significantly in advancing its Community Solar Platform and IT architecture to continue to shape and serve the next-generation of community solar programs and community solar customers.

5. Data security will be a key value proposition.

As the shift to mobile and cloud technologies becomes the norm in most industries, data vulnerability is top-of-mind for all IT administrators. Data security processes and planning for community solar programming, particularly regarding the requisite software administering bill credits and customer benefits, is vital for the protection of utilities, consumers, and the grid. 2018 will see an increased focus on available and emerging technologies delivering information security to meet the industry’s rigorous requirements. Security certification of community solar software solutions will quickly become the norm, raising the bar in solution maturity similar to financial technology solutions.

6. Project finance and product strategies will move closer to balance.

Expanding project financing options and sources is still at odds with the move toward more consumer-centric products. Both purchase and subscription programs have been subject to relatively strict terms from finance partners, limiting flexibility in product strategy. We believe 2018 will be turning point toward more adaptable financing as additional risk mitigations emerge and the finance market better understands the reduced risks inherent in community solar solutions. New technologies for acquiring and engaging customers, increasing participation by investment-grade companies, and further validation of community solar’s low customer default and streamlined ability to re-subscribe replacement customers will allow for shorter contract terms, reduced credit score thresholds, and an overall enhanced customer buying experience.

7. Big capital will move into the market.

The underlying variables of community solar programming – like multiple customer profiles, unique technology requirements, and maintaining full subscribership – has been thorny for capital markets. However, in 2017 we saw a slow but measured migration from boutique investors to the more mainstream financial community. Bigger financial players are becoming more familiar and comfortable with community solar’s long, optimized assets and predictable cash flows, and are now turning their focus to addressing the mechanisms for market development. 2018 is the year large institutional investors will move in, positioning community solar as the next place to put low-risk capital at scale.

8. Utilities will launch larger programs more frequently.

Many utilities blazed the community solar trail in 2016 and 2017 to integrate DER solutions and satisfy customers. Several of the U.S.’ largest utilities now have operational community solar programs, and dozens more have initiated programs — in regulated and deregulated markets, by investor-owned, cooperative, and municipal utilities. Such pervasive exposure has provided sufficient evidence for the best practices that allow for low-risk, cost-appropriate, and highly engaged community solar programs. In 2018, we expect less “piloting” by first-time utilities and more comprehensive, full-scale deployments by those currently testing programs. This move to scale will provide further economic efficiencies, driving even more benefit to utilities and customers.

9. Prevailing policy will accelerate market development.

Advanced tools and resources are emerging to help policymakers, regulators, and advocates navigate tariff and compensation strategies, incentives, land use and siting criteria, interconnection issues, consumer protections, and more to balance a market’s diverse interests and a program’s economic viability. In 2018, state policy development will take on a renewed urgency, and we expect to see community solar raised as a key platform item in state and federal elections in November. Streamlining adoption of well-vetted enabling policies and regulatory frameworks in slower-to-adopt states will translate into faster legislative action, fewer pilot programs, and more receptive markets.

10. Uncertainty at the federal level will temper enthusiasm.

Despite all the positive indicators, unknown risks at the federal level could pose new challenges for the industry in 2018. Complications from a possible ITC tariff, the federal tax overhaul, continued anxiety with EPA policy direction, and the DOE’s renewed interest in coal are ingraining a degree of uncertainty that is difficult to quantify. On the positive side, the solar industry is gaining momentum through increasing numbers of legislators and government officials across the country supporting community solar thanks to a well-informed base of industry advocates. This advocacy is fueled by solar industry associations, executives, employees, customers and enthusiasts, and in 2018 we will see an even stronger and louder coalescence of stakeholders with an amplified grass roots movement that will more deeply engage with elected officials and regulators. Equally important, rapidly declining solar costs are allowing solar to become a much larger part of the national energy mix simply due to its recent status as a low-cost power solution. This fact has increased utility support for many pro-solar initiatives.

— Solar Builder magazine

Four services, tools to ease solar installer pain in 2018

The following article will appear in the Jan./Feb. issue of Solar Builder magazine. Sign up for your free subscription (print or digital) today.

1. Education tools.

solar education preview

Often, the biggest hurdle for selling solar is a lack of understanding by potential customers. Energy costs can be hard to understand, not to mention the value propositions of different financing methods or the basic effect of the investment on home value. Luckily, more guides are available to aid in your explanation.

The Solar Energy Industries Association (SEIA), How Owning a Solar System Impacts My Home Value: A Guide to Valuing Residential Solar Energy Systems, walks consumers through the various methodologies that professionals use to value a solar system and provides homeowners with tips along with a recommended valuation method. In the guide, SEIA advises readers to focus on the projected income a solar system will generate for the owner over its expected lifetime. According to a recent study by Sandia National Labs and Energy Sense Finance, that approach is typically used to determine value in home appraisals in major solar markets.

smappee solar storage

But the education shouldn’t stop at the sale. Smarter homes are starting to make the general public more aware of their energy use, which is also a helpful nudge toward selling solar systems. Smappee Plus is the coolest device for this that we’ve seen. It measures real-time energy use from household appliances, offering valuable insights into a homeowner’s energy use and production. Smappee Plus is the only energy monitor that combines load disaggregation with submetering technology to provide real-time data also for appliances with variable output –such as air conditioning, electric vehicles, heatpumps, etc. Consumers are able to see how much energy a device uses and its daily, monthly or annual energy costs. Consequentially, owners can make informed decisions on their energy consumption (e.g. when to buy a more energy efficient fridge) and act to save on energy costs and efficiency.

Smappee Plus is also the only energy monitor that you can program to take on the role of an “energy traffic controller” in the home. The product can automatically steer excess energy production, such as solar power, to appliances in order of preference, further increasing a homeowner’s energy efficiency and cost savings. You can choose from numerous “recipes” that automate certain actions.

2. Comparison shopping

EnergySage_Screenshot-1

The Database of State Incentives for Renewables and Efficiency (DSIRE) has a wealth of information on incentives and policies that support renewable energy and energy efficiency in the United States, including solar. In order to make that info more accessible to those who need it, when they need it, the DSIRE teamed up with EnergySage, an online comparison shopping marketplace for solar. EnergySage and its full set of tools are now available through DSIRE, including comprehensive solar data on pricing and savings.

Like DSIRE, the EnergySage Solar Marketplace provides consumers with access to a free, unbiased content library built to simplify the process of researching and going solar. By collaborating with EnergySage, DSIRE is offering consumers the option to seamlessly move from education and research, to evaluating their solar options online.

3. Stronger protection

solar production warranty guarantee

Two stigmas to address here: 1) The worries of some customers (especially in a market like Ohio) of relying so much on the sun for energy when it feels like it’s cloudy all the time. 2) The reality that some solar systems are installed with subpar quality equipment that either underperforms, or fails but can’t be replaced because the company that provided the warranty went out of business.

One defense is always installing quality equipment by trusted brands with solid warranties. Another new concept is looking to third parties that guarantee performance for the lifetime of a PV system. Omnidian, for example, is a nationwide provider of comprehensive protection plans for investments in residential solar systems. Omnidian’s performance guarantee includes 24/7 continuous monitoring, proactive service alerts and 100-percent covered hardware and software through a nationwide network of field service professionals, as well as 100-percent guarantee of promised energy or plan owners will be reimbursed for energy loss.

Omnidian’s proprietary technology integrates with all major third-party monitoring platforms and quickly identifies underperforming assets requiring field service dispatch. The firm partners with a nationwide network of pre-certified field technicians. Omnidian’s 100-percent performance guarantee transfers solar energy production risk away from the asset owner. This risk transfer secures the solar energy investment, enhancing asset security and liberating capital.

4. Streamline payments

solar payments streamlined

Solar contractors are in a constant battle against soft costs, so every gain in efficiency helps. Frequently installers have disparate and fragmented systems in place for their billing and payments that increase the cost of their cash and require high degrees of financial and IT labor. Operationally, these legacy systems often mean solar businesses are taking a combination of extremely expensive credit cards (fees of 3 percent or more!), manually intensive bank payments, and a staggering number of paper checks that delay cash settlement. Rarely do these payments tie back to the financial systems or the POS/invoices, so manual labor and reconciliation end up introducing needless costs in lost productivity and customer maintenance.

In 2018, consider a new cash management process: from accounting software, to invoice, to receivables, to payments, to settlement, to reconciliation. PayStand is one such cloud payment suite. With PayStand, solar distributors, manufacturers and installers, can take payments across multiple channels such as PayStand’s 0% network, as well as echeck bank transfers, and wholesale ACH and card transactions all-in-one system. Further, PayStand works directly with invoices, automating financial processes alongside accounting software, and ads powerful management & reporting capabilities.

PayStand has recently added Allterra Solar, Geoscape Solar, Gunthers, and Simplify Solar to its ranks of solar customers. With PayStand, these new customers are enjoying the many benefits including: faster time to cash, a frictionless customer payment experience, automation & improved billing efficiencies, and significantly reduced transaction costs.

— Solar Builder magazine

Four ground-mounted solar trends in 2018 from IHS Markit

Array Technologies Lead photo

Centralized trackers like Array Technologies’ DuraTrack HZ can simplify O&M requirements and reduce the amount of motors needed.

The following article is from the Jan/Feb issue of Solar Builder magazine. Set up your free print or digital subscription here.

1. Demand for ground-mounted PV has been the primary driver of growth in the United States.

The United States has become one of the largest solar photovoltaic markets in the world, primarily driven by demand for ground-mounted systems. To put this in perspective, IHS Markit forecasts the U.S. market will deploy 37 GWdc of PV from 2016 to 2018, with ground-mounted systems accounting for over 70 percent of installed PV capacity during the period.

After the rush of development and installations in 2016 due to the late extension of the Federal investment tax credit (ITC), the U.S. PV market experienced decline in 2017 as the project development pipeline replenished and set targets on opportunities in 2019 and beyond. Due to recent trade policy dynamics, 2018 could lead to a second year of decline for the U.S. PV market if new tariffs result in significant price increases for PV technology. IHS Markit currently assumes that a new 30 percent tariff on imported PV cells and modules will be implemented in Q1 2018 [the decision was not made at presstime], increasing the base price of PV modules in the United States and negatively impacting demand for utility-scale PV solutions during the year.

IHS Markit solar trackers

But even as the market for ground-mounted PV in the United States faces decline in the near-term, it remains a multi-gigawatt opportunity. When the market experienced its greatest demand for ground-mounted PV in 2016, leading markets included familiar states such as California, North Carolina, Utah and Nevada. Increasingly, emerging markets are accounting for more ground-mounted PV demand in the United States. IHS Markit projects that Texas, Florida, Minnesota and Virginia will also be top markets in 2017 and 2018. Primary drivers of growth in such markets include the emergence of new renewable energy policy initiatives, attractive project economics for customers and utilities, and the developing interest of traditional energy companies.

2. Single-axis tracking has become the dominant technology choice for the ground-mounted market in the United States, primarily due to continued price reductions and improved energy yields.

IHS Markit fixed tilt solar stats

Single-axis trackers have become increasingly popular in the United States in recent years, growing steadily in market share from 2014 to 2016 to 70 percent of market share compared to fixed-tilt systems in terms of megawatt shipments. From 2017 to 2018, IHS Markit forecasts the share of fixed-tilt systems for ground-mounted systems will remain relatively stable as demand for such solutions remains strong in markets with lower solar resource, incompatible weather patterns, less than ideal land types, and when modules can be procured cheap enough to capitalize on the denser ground coverage ratio of fixed-tilt systems.

3. The competitive landscape for single-axis trackers continues to grow at a rapid pace.

NEXTracker solar tracker

NEXTracker can apply in-house monitoring and software to optimize and manage the operations of the energy storage system with the output from the tracker system. Pictured here is Pirapora I & III in Brazil.

Due to higher demand for single-axis tracking systems in the United States, many suppliers have jumped into the market, but none have a greater presence than the two leading suppliers: NEXTracker and Array Technologies. Both have a multi-gigawatt track record of shipments and installations in the United States and are seeking to grow in international markets as global demand for tracking systems continues to increase. Notably, the two suppliers utilize vastly different tracker designs that are able to meet different needs: NEXTracker’s architecture is distributed while Array Technologies is centralized. In basic terms, a distributed system can add flexibility in layout design and distribute the risk of failure to smaller portions of the system, while a centralized design can simplify O&M requirements and reduce the amount of motors needed.

In addition to the leading players, many other suppliers have also developed tracking systems. Some of the rapidly emerging domestic suppliers of single-axis trackers in the United States include SunLink, GameChange Solar and Solar FlexRack, all of which also maintain a portfolio of products dedicated to the fixed-tilt market. International tracker suppliers such as Soltec, Arctech and Scorpius are also vying to increase their market presence in the United States, in addition to their domestic markets of Spain, China and India, respectively.

4. New trends and opportunities for ground-mounted PV emerge as technologies and business models continue to evolve.

A notable trend emerging in the United States is demand for hybrid mounting systems for some customers. Such solutions are increasing in popularity in some markets, especially those that have been very active historically, because of the lack of suitable terrain to support the use of PV tracking systems due to the sensitivity of the components.

Solar FlexRack Trackers in GRID Alternatives Community Solar Project_2017

Some tracker vendors such as Solar FlexRack offer both fixed-tilt and tracker systems for complete solutions on any terrain. Photo courtesy of GRID Alternatives.

For sites that have a mix of suitable and un-suitable land for PV trackers, some customers are benefiting from working with suppliers that offer both fixed-tilt and tracker mounting systems to optimize the energy output of such projects, using the fixed-tilt mounting on rougher terrain and tracker mounting on smoother terrain. This type of solution caters well to suppliers such as SunLink, GameChange Solar and Solar FlexRack. Suppliers solely focused on tracking systems, such as NEXTracker and Array Technologies, continue to improve their products to allow customers to use their products on less than ideal land types as well.

An interesting solution developed by NEXTracker and its parent company Flex involves integrating energy storage with the design of the PV tracking system. The company has designed solutions around both flow and lithium ion batteries to service the needs various customers may have regarding their specific circumstances. The primary benefits energy storage can provide to PV customers include broader flexibility of the power generated by the PV system to better meet the load profile of their business and the ability to store energy that would otherwise be lost due to clipping by the power conversion system. NEXTracker’s solution goes a step further by applying the company’s in-house monitoring and software to optimize and manage the operations of the energy storage system in conjunction with the output from the single-axis tracking system.

Other suppliers are seeking to offer additional services by leveraging expertise and/or partnerships to diversify their businesses and create additional sales channels for their products. For example, SunLink offers integration, O&M, and software services for some customers and GameChange Solar is seeking to leverage connections with financial partners to help fund the project pipelines of their customers. Offering such services can generate additional sales channels that provide the benefit of helping customers manage fewer vendors and streamlining project development, integration and operational experiences.

IHS Markit is a global information resource for numerous industries, including finance, energy and transportation.

— Solar Builder magazine