Article written by Mark Becker for Danville/Alamo/Lafayette Today, April 2016.
Energy Alert! If you’re considering going solar in the near future, I highly recommend you change your PGE electric rate to an E6 “Time of Use” (TOU) rate. This rate will remain in place for seven more years, but it is closing to new customers on May 2nd. The E6 TOU rate provides best arbitrage of the rate structure and maximum solar investment return unless you have an electric car AND have solar PV. You may have short-term higher costs on this rate until you “go solar,” but most likely you’ll save slightly more on the E6 rate post solar vs. the new “A or B” TOU rate which is taking its place.
The solar photovoltaic “movement” continues to gain steam in many parts of our nation, for many reasons. The primary driver is virtually always economics. A solar investment is certainly advantaged by sunny weather patterns, but financial returns are also driven by policy, electric kWh cost, and utility rate structures. Some states have strong pro-solar policies, yet others adopt policies that intentionally harm the solar PV investment. Perhaps it’s special interests that influence our legislators on both sides of the issue.
In Washington DC, Federal solar policy is mostly bi-partisan policy. At the state level, it’s apparent that the opposite is true. SolarPowerRocks.com has a very interesting interactive map of the USA that generates a “Solar Scorecard” for each state.
Concerning the “Solar Scorecard” data below: Please draw your own conclusions relating economic, political, and educational demographics as influences and factors to the referenced states’ adoption of pro-solar or anti-solar policy. I am just fact gathering; I’m not trying to make any political statements or generalizations.
“Solar Scorecard” grading system is a traditional “A” through “F.” The metrics to assign grades are measured by Internal Rate of Return (IRR) achieved by a solar investment in each state. An “A” grade generally provides a 10-20%+ Internal Rate of Return (IRR) for a solar investment, whereas an “F” grade averages 5-6% rate of return.
States high in mineral resources: Not surprisingly, the “coal-rich” and “oil rich” states as a group failed the Solar Scorecard. They all earned an F, except for California, which earned a B. Of course, solar energy competes directly with coal and oil. Coal and oil employment is plummeting. The solar industry accounts for 1 of every 78 new jobs in our nation.
Economics: Median income defines the “richest” and “poorest” states. The richest states have a B+ Solar GPA on the Solar Scorecard. The poorest states each have an F score. The states with the highest poverty levels also have an F. States with the highest unemployment have a D+.
Education: The ten most educated states have an A-. The least educated states had a D-.
Political affiliation: “Blue” states versus “Red” states? The top ten A Solar Scorecard states are “traditionally blue” (when using historical Electoral College data to determine party affiliation). Each one of the F Solar Scorecard states is traditionally “Red.” As noted, the Federal Government (consisting of Representatives and Senator’s from individual states) have a significantly more bi-partisan view on solar. Solar seems to be one of the few things that people can agree on nowadays. Generally, solar is beloved by both parties. Motivations are that it’s good for the environment, and can be part of an excellent investment strategy.
The summary at face value of the Solar Scorecard seems obvious. I’ll grant that things are not always as they seem, yet the facts indicate that lower income, higher unemployment, high poverty states with large and heavily subsidized fossil fuel industries have the lowest solar PV adoption, even though they may be in regions that could very much financially advantage adopters. What is conjecture is WHY these demographics play out as they have. Is it really all about partisan politics and special interests that drive or stop this solar phenomenon? Have we gotten away from a free market? Everyone wants choice. Solar provides choice of energy provider. In Florida, solar has made strange bedfellows. The Green Party and the Tea party partnered to form the “Green Tea Party” politic for free market energy provider choice.
The visuals of the map on SolarPowerRocks.com are pretty powerful and interesting to ponder. Fortunately, we live in a state with all the right ingredients to make solar PV a stable and reliable investment, if “done right.”
Mark Becker is the President and business owner of GoSimpleSolar, by Semper Fidelis Construction Inc, CSLB 948715. GoSimpleSolar is one of the very few solar PV installers utilizing both licensed roofers and licensed electricians for installation work, project managed by a solar PV NABCEP professional. For more information visit www.GoSimpleSolar.com.