Barrier and Benefit for Solar Programs

Hi Stephanie,

I am leading a very successful effort to increase residential solar PV adoption in Mountain View, California and am blogging about my experiences at http://mvsolar.blogspot.com There's a lot of helpful stuff there. One of the things you asked about is images that work. You'll find a great one (polar bears on an iceberg) at http://mvsolar.blogspot.com/2007/02/my-presentation-to-mountain-view-rotary. html After seeing it and the caption, one person said "That picture was the whole presentation!" Aside from obvious physical barriers -- trees in the wrong place, living in a really cloudy climate -- here is what I have found to be four big perceived barriers (or myths) and what you can do about them. Myth #1 -- You have to have a southern exposure for solar to make sense. Fact: in Northern California any orientation from East to West works remarkably well, and even west-northwest can be viable. If your utility pays retail rates for the electricity you produce and has a good time-of-day price structure, west can be even more cost-effective than south. Myth #2 -- The up-front cost of solar is an insurmountable barrier. Fact: most people should buy solar the same way they buy a house or a car, by financing it. Any institution that would lend you money for a room addition would probably be happy to finance solar for you. Myth #3 -- This expensive improvement will cause my property taxes to go up. Fact: in California the only improvements that trigger a reassessment are those that increase the size of the home. Since solar doesn't do this, there are no property tax consequences. Myth #4 -- Solar PV is expensive. Fact: it all depends on how you present the numbers and what you're paying today. The electric utility in my area, Pacific Gas and Electric, has a 5-tiered electricity rate structure. The lowest tier costs $0.114 per KWH and the highest is $0.370. I have found that the best and easiest way to express the cost of solar PV is one that avoids use of the 3 dreaded terms: net present value (NPV), internal rate of return (IRR), and return on investment (ROI). Try this simpler approach. "During its 30 year lifetime, this solar system will produce X KWH of electricity. The total cost of purchasing and financing the system, minus rebates and tax incentives is Y dollars. Therefore, the cost per KWH that will be produced by the system is Y / X. How much are you CURRENTLY paying per KWH for electricity?" Plugging in the real numbers for the small system I am buying for my home, X=93,780 and Y=$11,865. So my "locked in" price is $0.127 per KWH. This is about the same as the $0.120 per KwH that I am paying now for electricity. With this simple formula I don't have to explain about time-of-use pricing or estimate what fraction of my production and demand will occur on-peak vs. off-peak. I don't have to get people to estimate their time value of money or guess at how much PG&E will be charging for electricity in 15 or 30 years. I've given the decision-maker one simple, credible number that can be compared to another simple number that's easy for them to calculate. In our area, homeowners who use a lot more electricity than I do will find that solar PV costs them FAR LESS per KWH than what they are paying now, and they therefore get very eager to install it. In the last two months, TWICE AS MANY people have signed up to go solar in Mountain View than did so in all of 2006. Now, I know that the figures won't work out this nicely everywhere. You have lots more clouds in Oregon, your grid-supplied electricity is probably much cheaper, your state incentives may be lower, and you may not have vendors who can install solar as cheaply as the one I am working with. But the basic barrier-busting approach should still work. Help them do the math, then show them the picture of the polar bears on the shrinking iceberg and say: "Ask not 'What will this cost me to do this?' -- ask rather, 'What will it cost my grandchildren if I don't?'"

Good luck!
Bruce Karney

[email protected]
+1 650 964-3567 (home office)
833 Bush St., Mountain View, CA 94041 USA

Hi Stephanie,

Initially our main barrier to convincing people other than committed conservationists to purchase solar hot water systems was their high costs and the fact that electricity and natural gas are very cheap in Australia, especially in Victoria. The main areas where solar hot water systems were used was in locations remote from natural gas supplies where people relied on more expensive LPG for hot water and the payback period for solar systems reduced to less than 10 years. The problem was even greater with photovoltaic systems as their cost was very high giving them a payback period of 15 to 20 years. The only time we saw them being used was in areas remote from the power grid. The big benefit for homeowners has been in the availability of rebates to help reduce capital cost. Sustainability Victoria handles the rebates along with rebates for converting heating and hot water units to high efficiency gas systems. The rebates have reduced the payback period for solar hot water systems to about 5 years and to date have resulted in the sale of more than 11,000 solar hot water systems across the state. The sale of photovoltaic systems has also increased but not to the same extent because, even with the rebate, the payback period is still well over 10 years. There has also been a lot more advertising over the last few years about the effects of climate change and this is having an impact. We have now arranged for one of Melbourne's main daily newspapers to include an item each week advising the public of the state's total greenhouse emissions for the week and a weekly item during the weather report that follows the evening news on one of Melbourne's TV stations advising the public what percentage of their hot water heating energy they would have saved if they had a solar hot water system. We obtain solar radiation data from the Bureau of Meteorology each day to calculate this data for the TV station. Fore more information about the rebate system visit our web site at http://www.sustainability.vic.gov.au/www/html/1517-home-page.asp Once you get into the site check "Our Programs" and then "Rebates".

Cheers
John

John Osborne
Renewables, Sustainability Victoria
T: 03 8626 8783 | F: 03 9663 1007
Level 28, Urban Workshop,
50 Lonsdale Street, Melbourne 3000
www.sustainability.vic.gov.au tephanie
Swanson Principal MarketShift Strategies
971- 246-1732 (cell)
503-232-0820 (office)
[email protected]

Hi Stephanie

A recent discussion paper came out from the Alternative Technology Association in response to the State of South Australia Feed-in mechanism for residential small scale solar photovoltaic installations. This may be of interest to you - http://www.ata.org.au/wp-content/policy/sa_feedin_submission.pdf

Regards
Otto Lechner

Senior State Development Officer
State Development Centre
Ipswich/Springfield Phone (Ipswich)
+(07) 3280 1951
Fax +(07) 3280 1945
[email protected]
Ipswich: 26 East Street Ipswich
Springfield: World Knowledge Centre (Lvl 5)
Education City Sinnathamby Blvd Springfield
Mailing Address: PO Box 280 Ipswich
Queensland 4305 Australia

John,

Despite the significant improvement in affordability via the rebates available in Victroria I think your estimates of the payback times for both water heating and PV are very generous. PV grid connect systems in particular still have a payback period around 25 years, not the 10+ years you state. It will be interesting to see what happens with the introduction of feed-in tarrifs.

Cheers
MOC