The Utility Fox is Guarding the Solar Henhouse

The CSI, begun in January, was widely touted as a more than two billion dollar program that would pump up solar energy production statewide, and foster new solar-related businesses. But so far, it has instead turned into a bureaucratic/ utility company squeeze play that is sapping the financial strength of smaller solar companies. And it's all going on under the media's radar screen.

Don't get me wrong. I do a weekly radio show about the coming solar energy-powered economy. I was in the audience last fall at Solar Power 2006 in San Jose, when California Governor Arnold Schwarzenegger told us "the future is renewable energy. " Going green is now smart politics. At first glance, I thought the CSI was a smart solar plan.

But as any journalist, accountant, or I.R.S. agent will tell you, the dirt on a deal is always in the details. And almost six months into the program, the dirt is this: The CSI is backed up.... big-time. "The powers that be" are benefiting at the expense of smaller solar companies, and hundreds of homeowners.

I've heard the rumblings from my solar business colleagues for months...

There used to be a simple, one page rebate application form. Now the state and the utilities want much more information about a proposed system's solar savings, or "proof of performance."

The utilities say the longer application and additional information is important. They say they're worried that an unscrupulous installer will commit fraud, by over-promising how much a system will produce, thereby qualifying for a larger rebate.

But many installers say they already back their installations with warranties and guarantees. If there's a problem, they'll fix it. They're begging the State's Public Utilities Commission to streamline the process. Until it does, many installers say they're shying away from installing systems on homes, instead concentrating on commercial installations. They're seeing their home system sales dropping dramatically, because their sales people must now do all kinds of new estimates. It's a lot of work for what used to be a simple kind of small-sized sale.

Just as before the CSI took effect, installers must precisely check on the pitch of the roof, the angle of the sun, the possible shading produced from other nearby homes or telephone poles. Now they are even being asked to determine the species and growth rates of nearby trees, for fear that they'll someday grow too big and cast a shadow.

The installers I know say they're complying with the new requirements by telling their salespeople to greatly underestimate the potential power produced by their solar systems, even though the systems will certainly produce more power. But underestimating production makes it harder for a homeowner to see the savings that going solar will really give him. That makes for a harder sale. Add to the equation the fact that there are now different sized rebates for different zip codes. The new requirements are so complicated that one veteran solar installer jokingly told me he now has to use a crystal ball when he gives an estimate to a customer.

If all of this isn't bureaucratically bad enough, here comes PG&E's version of the hand that giveth, and the hand that taketh away. I recently attended a PG&E sponsored solar installer's workshop in San Francisco. About 30 of us walked in, past all the displays that tell us the monopoly now thinks of itself as a green company... "Because the future is renewable energy."

That's what we all thought as well. But that's not what we heard at the workshop. The PG&E representatives agreed that the CSI process needed to be streamlined.

"We feel your pain" they said.

Then an installer asked... "How many applications for new solar home installations have you received?

"More than one-thousand" said the earnest young PG&E representative.

"How many have been deemed "completed?"

This was a good question, because unless a new system is deemed "completed" the homeowner cannot turn it on. That means the installer must wait for his check.

The young PG&E representative answered honestly, if undiplomatically:

"None"... he said.

"None?" we asked.

"None was the reply.

The other PG&E representatives in the room quickly tried to explain. The company hired outside inspectors. They're working as fast as they can. The first checks should go out anytime now.

As the saying goes "The check is in the mail." Imagine the cash-flow problems for solar companies when no cash is flowing. Thank goodness PG&E provided a free lunch to go with the bad news. That kept the installers in the room from just walking out, so they could start looking for other lines of work. Dessert anyone?

That workshop was held two weeks ago. As of May 31st, every one of the many installers I know is still saying one thing "Show me the money." Some final notices have now finally been sent out. That's nice. But you can't cash a notice. Where's the money?

Don't believe there's a CSI slowdown? See for yourself. You'll find documentation on the PG&E website: click on "CSI and SGIP statewide average systems cost, May 2007" and check the dates for "completed" systems after January 1, 2007. None. The same goes for residential and commercial applications in Southern California Edison, and San Diego utility territories. As of May 31st, when this article was last updated, there was not a single system marked "completed" for 2007. None.

What's going on here? How much money has the state's Public Utilities Commission allowed the utilities to keep in their bank accounts for almost six months now, drawing nice interest rates? Millions? Where does that extra money go? To the CSI program? To the utility's other programs? I'm waiting for answers to those questions.

Meantime, hundreds of homeowners are still waiting to turn on their solar systems, and dozens of solar companies, many of them start-ups, are wondering when California's solar revolution will really...start-up.

Dale Julin is the owner of Stardate Solar, a Santa Cruz, California based solar power company. He is the host of 'The Stardate Solar Power Hour,' Saturdays at noon on KRXA 540 am, in Monterey, California. A long-time solar advocate, Julin is a former TV news anchor and investigative reporter. His many awards include the Peabody, which is considered the Pulitzer Prize of broadcasting. Solar enthusiasts can listen to the show online.

This article was adapted from Julin's original commentary article that appeared in the SantaCruzSentinel.com.