New CSI Report Shows Lagging Progress

Does CSI need improvement? Or are we looking in the wrong place?

In its highly critical April report on the CSI program, SunCentric does have one thing right: California's publicly-owned utilities have not done nearly enough to meet their goals. However, to conclude the CSI is a failure or needs massive re-engineering is simply wrong.

Let's be realistic. CSI is not a perfect program. While the program has administrative issues, it does have a significant list of "rights". CSI is sustainable and "on budget". And CSI has delivered more megawatts of solar, however you want to count them, than any other U.S. program. All this was achieved amidst an unforeseeable turmoil in U.S. tax policy, disintegrating credit markets, and world-wide panel supply constraints that are only now giving way to surplus.

The SunCentric report minimizes or ignores significant external factors, such as the impact of utility tariffs. There is no analysis of the impact that investment tax credit expiration had on the market in the latter half of 2008, nor of the credit crunch affecting solar companies, their budgets and employment levels.

SunCentric would do California and the solar industry a great service by bringing its analytical strength to bear on utility rules and tariffs that have inhibited widespread deployment of solar. Publicly owned utilities have typically done poorly in the deployment of commercial solar because they prohibit the use of power purchase agreements and other innovative financing. The three investor-owned utilities regulated by the CPUC have avoided this mistake but the faster adoption of solar in northern California compared to southern California shows that the tariff structures of SDG&E and SCE simply aren't as well-designed as PG&E's to support solar.

The CSI could use improvement. But if we're going to improve California's solar initiative, then let's do it right. California isn't Germany and we don't want to emulate the start-stop Spanish

conclusion to previous post . . .

The CSI could use improvement. But if we're going to improve California's solar initiative, then let's do it right. California isn't Germany and we don't want to emulate the start-stop Spanish market. Let's focus on encouraging publicly owned utilities to remove roadblocks so they can fulfill their obligations and how to use Federal stimulus dollars for green energy to unlock constrained credit markets. Then we'll be in a position to tinker with the administration of a program that has already delivered hundreds of megawatts of clean, renewable generation to California.

Joe,

We have done much of the analysis you suggest in formerly published reports and papers which are posted on the Renewable Energy World site and the SunCentric site. Those reports have considered many of the factors you identify. We have made many specific recommendations to address the various issues. This new report again considers some of these old and well known factors.

Perhaps you could generate a "trend line for success" as we have for the CSI from where we are today to 3,000MW by the end of 2016 and post it to your site. We'll watch your projected results and our projected results versus actual results over the coming years.

The CSI was underperforming well before the recent economic turmoil and other well know market and federal tax situations. These should not now be used as an excuse for poor program performance. In our view, those in charge of the program should be aware of these conditions and adapt the program on a regular basis so it can meet its objectives.

Do you want some cheese to go with that whine?

Have you people in the photovoltaic industry every thought about any other way beside nursing the government teet? Or worse, expecting American citizens to go into dept and nurse the government teet as well, all in order to utilize your product? A product that will eventually have to be replaced. A disposalble product.

There is a better way for the PV industry, for the American citizen, For the U.S. government but your not going to like it and therefore would never adopt it.

For nearly two decades now, I have been reading about how "unfair" it is for the PV industry that coal and oil get so much more government money than RE. About, how we may be getting low per kWh rates from the coal burning electric power producers but we are actually paying more for it but don't know it because its "coming out of more than one pocket." Sound familiar?
It would seem that with all of the PV industries grandious posturing over "saving the planet", "saving the enviroment" they really haven't been going about their business any differently thay any other industry.

Get as much money as possible from the government for your product.
Make customers go into debt for your product.
Make the customer seek out ways to get the government to help pay for your product.

Put like this it sounds more like healthcare. Whats next PV insurance? Opps! I can invision a PV industry accountant thinking about that. Ringing his hands over the idea of how to get us to pull money from yet another one of our pockets if we want PV.

Isn't the PV industry a "billion dollar" industry allready?
Yet it can't stand on its own "two feet?"
It still needs "mommys breasts?"

I, for one, had greater expectations of the PV industry.

If saving the planet, saving the enviroment is truly the agenda we are expected to believe the PV industry has, that its not just an advertisment, Then it may truly be, a pity about Earth.

I like the idea of utilizing PV energy.
I have lived "off grid" for over 25 years.
The last decade of that time I have utilized PV at home.
I re learned how it is possible to live without any electricity first.
It wasn't easy by no means.
Nobody ever said life on Earth was easy but I have heard it said that there comes a time when every little boy needs to put away his toys and become a man. To stand on his own. To be able to give a whooping as well as take one.
The answers not in "slidng into bed" with the politicans and other energy providers boy. Make a name for yourself, stand up and show some pride. Be independent and if you do get "knocked down," get up, check yourself, square up and go back in for some more. Make sure they know your not going to take it lying down.
Make us proud son but always love and respect your mother, don't ever abuse her. There is too much of that going on already by other industries.

The U.S. government needs the support of industry and commerce but what I see going this day is industry and commerce clawing and scratching and biting trying to pull away every last piece of her they can get.

You can be better than them!

What is really needed is an effective Feed In Traiff like was proven in Germany and Denmark to date, and now Canada is adopting this new approach to encourage green energy alternatives.

Simply put, solar has lagged way behind given the big oil and utility company lobbyists have effectively paid off congress to prevent real advances in solar, wind and in my case, hydrogen generation home generator systems.

A Feed In Tariff (FIT) is far better than the Net Metering Tariff which finally became mandated by end of 2008, but look how long this took to become regulated, again, too many lobbyists throwing money around to stall any real advancements in energy conservation.

Will we ever see FIT adopted in U.S.? I sure hope so for it will not only reduce our carbon dependency, it will put a strong incentive for home owners and business to install solar, wind and hydrogen based generators which will solve many issues which have been ignored for decades. Green energy has been kept at bay for decades due to no action to put regulations in place to cap carbon.

Research FIT for yourself and see how successful it has been in Germany and Denmark. Would you, as a home owner, or business invest in a system which not only would provide a return on investment in less than a year, and then continue to provide you a profit paid by your utility company for years to come. I am not talking about Net Metering whereby you are limited to how much power you can pump back to grid reversing your meter, and in most cases, capped so you cannot earn anything more than credit on your own consumption. I am talking about being paid reasonable going rate for each KWH you produce.

How many people would invest in clean energy if they could earn a long term profit which is guaranteed by FIT gov. regulation? It would explode the industry, put millions back to work, solve the foreclosure explosion, and at the same time putting more money into consumers pockets.

www.Nano-Electric.com

The CSI is under-performing and Program Administrators have already commented that program performance is affected by the recent economic turmoil. The CSI has to change if it is to achieve 3,000 MW by 2017. The model for change is simply increase the subsidy. From March 1998 to 2001, PV installations grew slowly. After May 2001, the CPUC increased the 10 kW net-metering limit to 1,000 kW and the $3.00/W incentive to $4.50/W. PV boomed in California and inspired other states to start similar solar programs.

The concept of weaning PV off incentives with a declining incentive is a bad idea that has not been used to wean polluting and non-renewable energy sources off subsidies. I propose transferring subsidies from the polluting technologies that no longer deserve them to PV incentive programs.

A little more history: In 1991, the CPUC said Californians were paying much more for electricity than other Americans and mandated deregulation. In 1994, investor-owned utilities opposed deregulation until their 1996 proposed restructuring plan was adopted. Their plan included a one-quarter cent per kilowatt-hour ($0.0025/kWh) public benefit charge. A small amount of that was allocated for the PV rebate. Restructuring failed miserably, but the PV program was a popular success that evolved into the CSI. Unfortunately, investor-owned utilities (PG&E and SCE) manage the CSI program the same way they manage their companies. Do you see a pattern?

In 1960, Theodore Levitt wrote about short-sighted utilities in his classic Harvard Business Review essay, "Marketing Myopia." See http://www.numotion.nl/download.asp?file=marketingmyopia.pdf
"Who says that the utilities have no competition? They may be natural monopolies now, but tomorrow they may be natural deaths. To avoid this prospect, they too will have to develop fuel cells, solar energy and other power sources. To survive, they themselves will have to plot the obsolescence of what now produces their livelihood."

Joel, well put. The recent turmoil has certainly had an impact, but the program has been underperforming since it started. We did a paper before the program started in October 2006 and basically stated that the CSI incentives were going to decline too quickly and that industry profits and demand would likely suffer.

With all the contraints, there was no way for our young industry to get on the steep downward cost decline the the CSI imagined. Given everything we've learned and now know, we should do an estimate of how many MWs we could really install with the remaining program funds if we increased the incentives. Perhaps that would be of encouragement to the CPUC and CEC.