CALIFORNIA ADVANCES USE OF SOLAR ENERGY IN RESIDENTIAL SECTOR WITH NEW MANDATES AND INCENTIVES

By Gary Liardon

California is setting the new standards and bringing our country to the forefront of solar power. The state government recently adopted new policies that mandate solar for new homes and provide incentives for existing homes. As more national attention is focused on the growing importance of solar power, the energy storage market is being driven by improved energy efficiency, the declining cost of solar equipment, and higher capacity energy storage that is made possible by improved battery technology. We are indeed at the cusp of a new generation of intelligent energy production and use. I believe this new paradigm of energy partnerships is a win-win not only for solar energy providers but for people and the planet.

The most recent policy, SB 700, signed into law by Gov. Jerry Brown in September, extends California’s Self-Generation Incentive Program (SGIP) for an additional five years, from the current January 1, 2021 expiration date until January 1, 2026. SGIP provides substantial rebates to home owners through the state Public Utilities Commission for the installation of energy storage systems that save solar power for use during off hours such as evenings and cloudy days, or during utility blackouts.

SB 700 comes in the wake of another far-reaching energy policy adopted earlier this year by the California Energy Commission requiring that solar photovoltaic (PV) electric systems are installed on virtually every new residential dwelling built in the state starting in 2020. “California is about to take a quantum leap in energy standards,” states Robert Raymer, technical director for the California Building Industry Association. “No other state in the nation mandates solar, and we are about to take that leap.”

SB 700’S PATH FORWARD

According to the California Solar & Storage Association (CALSSA), the bill is critically important for helping to meet the state’s clean energy goals, address grid reliability issues and protect tens of thousands of solar jobs as so-called “time of use” rates hit consumer energy bills in 2019.

“We’ve come out by the hundreds from all over the state to speak directly with our elected officials about the urgency of supporting energy storage in California,” says Bernadette Del Chiaro, executive director of CALSSA, the bill’s sponsor. ”S.B.700 will do for storage what S.B.1 did for solar over a decade ago – namely, create a mainstream market by driving up demand and driving down costs all while creating jobs and clean energy choices for consumers.”

PetersenDean Roofing & Solar is at the forefront of storage battery technology as a key component of our solar energy systems and thus fully embraces California’s SB 700.  To this end, we have partnered with SolarEdge and LG Chem. SolarEdge provides PV inverters, power optimizers, and module-level monitoring services and LG Chem provides our lithium-ion batteries. It’s worth noting that tor residential storage applications, LG Chem is using the same technology that has been used in its utility-scale projects. With this partnership in place, our company has made a major leap towards utilizing state-of-the-art storage battery technology as part of the solar packages we offer to our builder customers and home owners.

“The melding of PV and battery storage technology will be pivotal to the growth of solar in 2019,” said Sanjoy Malik, CEO of Urjanet. “As storage advances and states like California mandate time-of-use (TOU) rates, we also expect to see a growing need for granular monitoring of on-peak, off-peak, and demand usage.” 

In the solar energy sector, the rapidly growing residential battery marketplace is based on the concept that by storing electric power generated by solar panels, the solar homeowner has the advantage of four important benefits:

  1. With a storage battery system, a home that utilizes solar power is protected from solar system down time due to a utility operating problem (e.g. brown or blackout) or a long period without sun.
  2. As demand for storage batteries increases, the costs of purchasing and installing the systems decrease.  The more battery systems that are sold, the lower the cost to builders and consumers.
  3. By combining solar systems and storage batteries with “smart” software, homeowners can create intelligent home energy management systems that analyze historical energy consumption trends and then develop efficiency recommendations that include the exact combination of stored and renewable energy required to power a home and limit energy demand.
  4. In some states, a homeowner can benefit economically by storing excess power generated by the solar system and then sell it back to their utility.

High-performance storage systems such as lithium ion batteries that are now being installed by solar companies such as PetersenDean, dramatically increase the homeowner’s independence from utilities and the associated challenges related to stability and rate increases.

By combining SolarEdge’s StorEdge solution with LG Chem batteries, customers can both manage and monitor PV and battery status through a single platform and with the peace of mind that when the grid goes down, they’ll still have power backup. A grid-connected residential energy storage system that synergistically combines solar and energy storage can also greatly reduce a homeowner’s operational reliance on the local electric utility.  Simply put, batteries make it possible for homeowners to use stored solar energy not only during the night and possible blackouts, but during peak demand times when utility rates are at their highest, thus keeping their monthly utility bills lower. Storing excess solar and drawing from it when needed, saves customers substantially in the long-term and it also avoids unnecessary fees and taxes.

On a macro level, storage battery technology offers electric utilities the opportunity to create a smarter power grid that, among other benefits, can give the utility better control over managing peak demand and thus reduce the need for new, extremely costly generation plants to cover that demand. Considering all the changes required by utilities and regulatory agencies as these entities respond to the new energy age, this transformational storage technology provides energy producers more creative ways to connect with home builders and home owners, giving them greater control over their efforts to save money and help our environment by using more renewable energy.

Storage battery technology as that promoted by SB 700 is also bringing our country to the forefront new energy partnerships that advance the use of solar power.  As more national attention is focused on the growing importance of solar power, the energy storage market is being driven by improved energy efficiency, the declining cost of solar equipment, and higher capacity energy storage that is made possible by improved battery technology.  This creates a huge benefit for consumers of electric power.

The market research firm IHS Markit states that energy storage is considered critical to enabling power delivery systems that are heavily reliant on renewable energy, and batteries will play an important role in this transition. According to Grid-Connected Energy Storage Market Tracker by IHS Markit, 130 gigawatt hour (GWh) of battery energy storage will likely be installed worldwide between 2018 and 2025.

“The flexibility and scalability of batteries will enable them to deliver a wide range of application from optimizing solar self-consumption in the residential sector to large-scale systems that provide grid balancing services or provide renewable firming,” explains IMS.  “The applications driving the market will vary significantly in specific regions.”

FULL COURT SOLAR ENERGY

California has been a leading proponent of solar power for the past decade with its goal of reaching net-zero energy usage by 2045. Committed to the long-term use of solar power, in May of this year the California Energy Commission took a major step toward achieving that goal, and beyond, by adopting a policy that will make solar energy systems standard on virtually every new home built in California starting in 2020.  We expect other energy progressive states such as New Jersey, Colorado and Virginia will follow California’s lead, especially as the cost of solar products decrease with increasing demand.

California’s net-zero mission dates to 2007 when the Energy Commission adopted the goal aimed at making homebuilding so efficient “newly constructed buildings can be net zero energy by 2020 for residences and by 2030 for commercial buildings.”  Under this policy, solar energy was considered one component of building more energy efficient homes — but was not required.  Now, this new solar mandate, officially called the 2019 Building Energy Efficiency Standards, will apply to all houses, condos and apartment buildings up to three stories that secure building permits after January 1, 2020.  To help with wider adoption of SB 700, builders installing storage batteries in concert with a solar panel system under this new mandate will get “compliance credits,” allowing them to reduce the size of the system.

The new CEC policy focuses on four key areas: smart residential photovoltaic systems; updated thermal envelope standards (preventing heat transfer from the interior to exterior and vice versa); residential and nonresidential ventilation requirements; and nonresidential lighting requirements. The standards also encourage demand responsive technologies such as heat pump water heaters, improvements to a building’s thermal envelope to enhance comfort and energy savings by inclusion of high-performance insulation and windows

“Under these new standards, buildings will perform better than ever, and at the same time they contribute to a reliable grid,” explained CEC Commissioner Andrew McAllister, who is the commission’s lead on energy efficiency. “The buildings that Californians buy and live in will operate very efficiently while generating their own clean energy. They will cost less to operate, have healthy indoor air and provide a platform for ‘smart’ technologies that will propel the state even further down the road to a low emissions future.”

With the new standards in place, more advanced solar products will become the norm as consumers expect optimum performance and maximum savings from their solar investments.  Based on a 30-year mortgage, the Energy Commission estimates that although the new standards could add about $40 to a residential homeowner’s average monthly payment, they will save consumers $80 on monthly heating, cooling and lighting bills.

“With this adoption, the California Energy Commission has struck a fair balance between reducing greenhouse gas emissions while simultaneously limiting increased construction costs,” explains California Building Industry Association CEO and President Dan Dunmoyer. “This set of cost-effective standards ensures homebuyers will recoup their money over the life of the dwelling.”

NEED FOR EDUCATION

As alternative-energy policies such as those adopted by California become more prevalent in states across the U.S. – especially the use of solar energy in so-called sunshine states – builders and their planners/architects must be in tune with the demands and requirements of structural design and implementation that optimize the performance of solar as well as other non-polluting, energy producing systems.

“There is a lack of awareness and technical expertise with respect to creating cost-effective net zero energy communities,” explains Judi G. Schweitzer MRED, AMDP, CALGreen CAC, founder and owner of Orange County, CA – basedSchweitzer & Associates.  An energy consultant for the state as well as major residential developers, Schweitzer says that one of the top priorities to achieving optimum performance is education.

We couldn’t agree more.  While much has been written and said about solar energy and its benefits, education about system design and proper installation is at best, lagging.  For example, we are still amazed as we do our on-the-ground assessments how many residential solar panel systems are improperly designed and installed, such as not orienting solar panels southwardly for maximum exposure to the sun.

Along with orientation, Schweitzer points out that the size of a solar PV system will depend on such factors as the location of a home and its relative climate zone.  Obviously, solar panels will perform better on homes located in sunbelt states, but even in these regions, design and installation are critical to performance. One other point that falls under education.  Something as basic as the correct color of a roof can improve the performance of a solar energy system.  Combining a PV system with a so-called cool roof – usually white or light colored – can boost the performance of a solar system by as much as 10 percent.

A NEW GENERATION

Now, at this critical energy threshold, we in the solar and storage battery industries must collaborate via partnerships at the highest level to keep the momentum moving ahead.  In the renewable energy sector, the rapidly growing solar marketplace is without question making its mark within the global energy industry.

We have the tools to be better.  Now together we must make the financial and human resource commitments to keep moving the energy industry towards a cleaner environment and healthier world. We are indeed at the start of a new generation of energy and hopefully we will continue down that road, especially as other states hopefully follow California’s lead and adopt similar policies.

About the author Gary Liardon is President and Chief Operating Officer at PetersenDean Roofing & Solar. Founded in 1984 by Jim Petersen, PetersenDean is the largest, full-service, privately-held roofing and solar company in the United States. Specializing in new residential and commercial construction, PetersenDean works with some of the nation’s largest builders and developers. With more than a million roofs under its belt, the Fremont, Calif.-based company employs 3,000 workers and operates in 11 states: Arkansas, Arizona, California, Colorado, Florida, Georgia, Hawaii, Louisiana, Nevada, Oklahoma, and Texas. Please visit http://www.petersendean.com/ for more details.

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