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The clock is ticking. Get control of the San Diego Gas & Electric TOU energy rate plan transition.

Will the TOU schedule affect me if I don't have solar? Am I grandfathered from a TOU shift?

If you’re a current SDG&E customer and don’t have home solar or have had home solar since before March 30, 2018 and believe you are grandfathered into tiered rate billing, there are some significant billing changes that you may already be experiencing. The change is a passive transition from your current tiered rate to what’s called “Time of Use” (TOU) electricity rates. This began on March 1, 2019. Many customers are unaware of this reversible change to their electricity cost structure that nearly all SDG&E customers are or will be experiencing. The conversion is scheduled to roll out throughout 2019 and potentially into 2020. It may have impacted your bill already or will soon. The good news is you can choose which billing structure works best for your family. Before you decide, it’s important to understand how your electricity rate baseline is determined, understand your TOU rate schedule choices and consider a couple energy management options.

Before learning about TOU plans, it’s a good idea to cover some basics about how your current tiered rate works. Tiered rate billing, in simple terms, increases the cost of electricity as you use more. Electricity costs start out each month at their lowest while the household is under its Baseline Allowance. San Diego Gas Electric gives different Baseline Allowance amounts for different homes. SDG&E’s online calculator [https://www.sdge.com/baseline-allowance-calculator] can give you some insight into how different regions, home set-ups and seasons all are factored in to determine each household’s baseline. The baseline is the approximated minimal amount of energy your house would need for basic needs – not much beyond just lighting and keeping a refrigerator running. Once your individual household’s baseline is determined by the utility, on a tiered rate plan the lowest rate will be for electricity used before 130% of that baseline allowance is reached. There is a higher rate charge for electricity used from 130% to 400% of baseline, and a highest rate charge for all electricity used above 400% of baseline – this highest rate is called a “High Usage Charge” or “Super User Rate.” And SDG&E’s Summer Rates (June 1 to October 31) schedule, when peak energy use hits, increases everyone’s rates for a 5-month period across the board.

What is the best the TOU pricing plan?

As for Time of Use billing, San Diego Gas Electric’s TOU rate plans have different electricity prices for different times of the day. Let’s take a look at two popular plans, TOU-DR1 and TOU-DR2: the most expensive time periods for both of these two plans is during peak energy demand; its called “On Peak,” and falls between 4:00 PM to 9:00 PM. Electric energy however, is cheaper during “Off Peak” time periods. On the DR1 plan, Off Peak is between 6:00 AM and 4:00 PM on weekdays (with an exception during March and April) and also from 9:00 PM until Midnight. Between midnight and 6:00 AM (and also between 10:00 AM and 2:00 PM during March and April) the rate is billed at the “Super Off Peak” pricing which is the lowest rate on this plan. DR1’s weekend and holiday billing structures have the same On Peak hours, but Off Peak hours switch from 2:00 PM until 4:00 PM then again from 9:00 PM until midnight time periods. Midnight until 2:00 PM falls under Super Off Peak billing. That’s a lot to take in. TOU DR2 billing rate structure are easier to understand and only has two rate categories: On Peak is from 4:00 PM until 9:00 PM every day, and Off Peak is every other time. Both of these TOU plans shift to different electricity prices for “Summer” and “Winter” sections of the year.

Another TOU pricing plan is called TOU-Plus (TOU-P) and it involves vigilant attention to energy consumption on “Reduce Your Use” event days. SDG&E can impose up to 18 of these Reduce Your Use days per year; during these times there is a drastic price increase between 2:00PM and 6:00PM for that day – this is based on the understanding that customers shifting to this plan must self-enforce zero or minimal energy consumption during this period; think of it like a self-imposed outage with a big financial hit for not complying. For households that can be flexible enough to essentially avoid using electric energy during these peak energy hours on the selected days, there are good savings to be had. This is the pricing plan for people willing to pay additional attention to SDG&E’s Reduce Your Use days schedule and announcements and don’t mind the inconvenience of occasional, self-imposed power “outages” as a trade-off for SDG&E charging lower electricity rates throughout the rest of the calendar days.

For solar customers, the DR-SES rate plan is the current default plan. The TOU-P plan described above is a good option, but comes with the need to heed “Reduce Your Use” days. Another good option is the TOU-DR plan, which does not require observation of those “Reduce Your Use” restrictions. And as Electric Vehicles become more popular, the TOU-EV-5 is a good choice, provided you use that electric car enough to overcome a monthly fee of sixteen dollars on the plan.

No matter whether you do or don’t curently have a solar system, you can proactively choose to remain on your current tiered billing plan. And if you have determined that tiered billing is the better plan for you than SDGE TOU plans, we have put together some tips on making this selection process through SDG&E easier on our website: https://www.bakerhomeenergy.com/tou-migration (On our website you will also find more information on solar savings, the benefits of producing your own renewable energy, solar industry news that affects residential solar, and more)

What is net energy metering?

The best defense against high energy costs, regardless of changing billing structures, is to become your own energy producer. Southern California is host to two factors that make a home solar panels one of the best financial investments a homeowner can make: high energy costs in a region with a lot of sunny days. A solar energy system allows families to produce their own renewable energy for use during the day. Excess energy (clean energy) is sold back to the utility. Baker designs home solar systems to offset, through net energy metering, 100% of the homeowner's electricity in order to maximize savings. The total cost of the system usually pays for itself in five to six years – after that it’s free energy from the sun.

And there’s another factor that makes 2019 the very best time to get into solar or solar + a home battery system: The Investment Tax Credit. This is a federal program that was created to encourage home solar use back when energy rates were lower and residential solar systems, and the entire solar industry, were in their early stages of development. Today, solar systems are so efficient and solar savings are go great that that there’s no longer the need for a tax incentive, so it is expiring. That means this is the last year to take advantage of the Federal Investment Tax Credit (ITC) at its full rate of 30%. Here’s an example of the impressive financial benefit you could experience. Let’s say a solar system costs around $30,000 to purchase and install. That means most taxpayers can deduct $9000 from their 2019 income tax payment. Every year, homeowners walk away from thousands of dollars because they delay their clean energy solar or solar + home battery purchase. So, Baker would like to ensure we educate as many homeowners as possible about the reasons to invest in solar systems this year. 2019 is the final year to get the full 30% benefit; for this your system needs to be installed and operational before the end of the year. Solar panels will still be a smart financial investment after the ITC is gone, and still the best way to create renewable, clean energy, but the system will just take longer to pay for itself.

Should I change my SDG&E rate plan? How do I contact SDG&E?

Be warned if you don’t think any of this rate plan switch applies to you. Many households that installed solar panels before March 30, 2018 were told that their current tiered electricity rates were grandfathered. Those customers still need to confirm their plan – some are finding they were switched to a TOU plan already or will be shifting to one soon. Your San Diego Gas Electric bill will tell you which SDG&E billing plan you’re on. To actively choose your plan you’ll want to log into your SDG&E account at https://myaccount.sdge.com or call 1.877.558.1674. If you’re an SDG&E customer and haven’t yet been switched over, and you qualify to remain on tiered billing, you can prevent shifting to a TOU plan by mailing your request to SDG&E at SDG&E, P.O. Box 129831, San Diego, CA 92112-9831.

Here’s an overview of how the transition applies to households with solar:

SDG&E customers who activated their solar energy system before June 29, 2016 have the option – so long as tiered billing plans remain available – to stay on the tiered billing plan and sell back power on the Net Metering 1.0 plan until the 20-year anniversary of their system. (Net Metering is the buy/sell rate plan for the public utilities)

SDG&E customers who activated their solar system before March 30, 2018 get to delay the passive shift to TOU until the earlier of either five years from their system’s activation date or in June 2021.

SDG&E customers who activated a system after March 30, 2018 are already on a TOU plan; the default plan is the DR-SES plan, but they can select an alternate plan. TOU plans keep the same baseline allotment of energy usage and also have a rate increase for energy consumption beyond 130%, but the two popular TOU plans do away with an additional increase after 400% of baseline energy usage.

Another major factor for residential solar customers to consider is the effect TOU has on Net Metering. With TOU rates, solar customers will sell excess produced energy back to SDG&E at the lower mid-day Off Peak rates but need to use SDG&E energy during the costlier On Peak hours.

TOU plans incentivize customers to lower energy use during peak times when energy is in higher demand to ease the load on SDG&E’s system to meet this spiked energy usage. The generation of this energy occurs at Peaker Plants – facilities the electric utilities use that burn natural gas to create electric energy. Energy from natural gas Peaker Plants is produced quickly to meet the immediate demand, then shut down; compared to residential solar, solar industry energy, or hydroelectric production it is much dirtier.

As an interesting wrinkle in all of this, SDG&E is offering temporary “One Year No-Risk Pricing” to most customers; this offer allows customers to give SDGE TOU DR1 or DR2 pricing plans a try; if they don’t save, they can switch back to tiered billing and SDG&E will pay back, via a credit, the difference over one year. It could be useful to evaluate a new rate plan and see what your actual utility bill would have been during the same period. Essentially, this is a no-risk option for an ‘apples to apples’ comparison between SDGE TOU and their tiered plan.

Some non-billing measures to consider for residential solar customers looking to expand their energy independence are home energy storage solutions – using your solar system for charging a home battery . At current electricity prices, money savings is not the primary benefit of energy storage. The main benefit of charging home battery systems still remains power outage protection with some benefit to energy cost. But as TOU billing reaches more households and rates increase overall, energy storage will become an option to help mitigate peak rates.

The customer transition to TOU is being undertaken by three major California public utilities: PG&E (Pacific Gas & Electric), SCE (Southern California Edison), and SDG&E (San Diego Gas & Electric). It’s important for you and your family to consider your electricity needs now and what you might need in the future (will there be a plug-in electric vehicle in your garage in the next 10 years?). Get on the right rate structure to ensure you’re on the plan that will give you the best solar savings and the best value on your energy – It’s the smart thing to do!

This is an update of the previous article further down the page:

The Solar Investment Tax Credit, or ITC, was created in 2006 to help grow a new industry – solar electric power. In the early days, prior to 2006, solar was expensive compared to more traditional sources of energy, especially fossil fuel. Solar was the realm of environmentalists, off-gridders, and perhaps a few unique situations where solar made sense despite the high cost. Thankfully, from growing public support for renewable energy, the federal government created the solar investment tax credit to help even the playing field and give solar the foothold it would need to become a thriving industry. It worked. Since its inception, the ITC has helped the solar industry grow 1600%.  However, the ITC is also designed to ramp down and eventually be eliminated completely. Unfortunately that day will soon be upon us.

 

The ITC has been under threat before.  It is unlikely to be extended again.

The ITC was actually supposed to have ended already. The original ITC program was meant to expire in 2007, or shortly after its creation. Thankfully congress extended the solar investment tax credit, but it again came under threat and saved by legislation in 2015.  The current ITC begins to ramp down in 2020 and goes away completely by the end of 2021. Only utility-scale solar, such as investor-owned utilities or commercial solar systems, can still get renewable energy credits beyond 2021. They can also get the federal solar tax credit on non solar pv systems such as geothermal heat pumps, fuel cells, or other energy efficiency installations but rooftop solar systems and ground mount solar installations for homeowners, the investment tax credit ITC will no longer exist after 2021.

 

2021 feels like plenty of time?

It’s not.  As I write this in August of 2018, people have a little over a year to go solar before the ITC ramps down from 30%, to 22%, to nothing. This is free money from the IRS to go solar.  The ITC value on an average solar power system is around $7,500. I cannot stress enough that this is free money to go solar!  If wait much longer you are simply going to miss out. Don’t expect the ITC to be renewed again, industry experts expect it to go away forever.

  • 2019: 30% ITC available
  • 2020: 26%
  • 2021: 22%
  • 2022 and beyond: no more residential ITC

 

Guide to the solar investment tax credit.

Frankly, a “guide to the solar investment tax credit” is not necessary. It’s simple; the solar investment tax credit is a federal tax credit that allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. Don’t have the tax liability to use your entire credit? You can roll it over to subsequent years. The only catch is that when using a lease or PPA, you do not receive the rebate, the lease or PPA company does – but the savings are usually folded into a lower monthly payment.

The ITC is so simple to implement, that many people handle the paperwork themselves. We recommend you speak to a tax professional prior to solar power installations.

 

FAQ:

Where else is the government investing in solar energy projects? In what states are these applicable?

Solar incentives differ widely from state to state and locally, so do government investment in solar projects. Some areas have different feed-in tariff and Net Metering math, or none at all. If you are located in Southern California, give us a call and we’ll walk you through everything that’s available to you.

What is a breakdown of some of the solar panel purchasing and financing options?

Solar energy systems are installed mainly using cash, finance, lease and PPA. Cash is the best option as there are no financing costs, but most people are unable to use this option. Financing is the next best option as the homeowner keeps the system after it is paid off, and the system pays for itself faster as there is no lease or PPA middleman. Lease and PPA are excellent options, but generally only for those without high enough credit scores to qualify for financing. See this article on the difference between a PPA and a lease for more information.

What is the minimum expense of getting into the solar panel market?

There is no one-size-fits-all answer to this question. You need a solar panel system sized to exactly your individual needs. The minimum expense is perhaps 1 panel on your roof, but it will do little to reduce your electricity bill. The average system costs around $25,000, but is reduced to $17,500 after the ITC solar incentives. The total cost of the system is not what’s important, it has to be compared against how much money it will save you over the lifetime of the system.

What kind of investment do most homeowners who get solar panels make?

Again, this is specific to each individual household. Most solar panel systems pay for themselves around year 7 through Net Metering.

How long does installation usually take?

It takes about 2 or 3 days for average solar energy systems. We start early, around 7am. We install with the minimum disruption to the homeowner as possible, pick up our trash, and respect people’s privacy and property.

Briefly, how has solar panel technology evolved over the past few years?

It has evolved very little in not only the last few years, but the last 20 years.  Panel performance is measured in ‘efficiency’, meaning, how much sunlight they convert into usable electricity. Efficiency has only improved by a few percentage points in the last few decades.

What regions/climates are optimal for solar panels?

Oddly, solar panels perform best in cold weather! But don’t worry, they do well in warm Southern California as well. It could be said that solar panels along the cooler coastal regions slightly outperform panels in the desert, but the coast gets less sunshine and things begin to even out.

 

 

Previous article below:

 

The most important solar policy of the 21st century, which has helped drive the solar industry boom and dramatic savings to consumers, is slated to expire next year. Unless Congress extends it, the residential component of the Solar Investment Tax Credit (ITC), which provides a 30% federal tax credit to home solar buyers, will be no more on January 1, 2017.

In his proposed 2016 budget in February, President Obama made a move to extend the solar ITC permanently. However, Congress is unlikely to approve this budget as is. Rhone Resch, president of the Solar Energy Industries Association (SEIA), is pushing hard for an extension. “Oil and gas has had incentives since 1916, coal since the 1930s, and nuclear since the 1950s,” he said at the PV (solar PhotoVoltaics) America 2015 conference earlier this month. "They aren't ramping down, so why should we?"

Although Congress has given the credit new life twice since its passage in 2006, it's impossible to say what will happen this time around. Given that many of the big state incentives have come to the end of their life (the California Solar Initiative is no longer taking new applications), the ITC may be the last big solar subsidy for most California homeowners.

If you have been considering a solar PV system, now is your chance to make a move or miss out on sizeable savings. To be eligible for the credit, under the current deadline, PV systems must be installed and running by December 31, 2016.

What Is the Solar Investment Tax Credit?

The Solar Investment Tax Credit is a dollar-for-dollar reduction in federal income tax for home solar buyers. It's not a rebate (which helps you pay for your system directly). And it's not a tax deduction (which reduces your total income and thereby decreases your tax bill by a small amount). It's dollars that you don't have to pay the IRS, or that the IRS will refund to you in April if you've overpaid.

Who Can Get It?

Any U.S. taxpayer who purchases a solar system outright is eligible for the ITC. No matter what financing method you use to buy your system; cash, loan, a line of credit, or even that mint-condition Tony Gwynn rookie card. In almost all cases, you can take the tax credit.

If you installed your system with a solar lease or Power Purchase Agreement, then you are not eligible, since the leasing company actually owns the system.

Remember, this is a tax credit, not a rebate, so you must have a tax liability to benefit. If somehow you don't pay income tax (I won't ask), then you won't be able to use the credit.

How Does It Work? How Much Will I Save?

The ITC for residential system owners is 30% of the net system cost. You are permitted to combine it with other financing plans.

Let's say you purchase a system in 2015 for $25,000. Take the net cost, which is the price you paid less any other credits*, and multiply that by 30%.

$25,000 x 0.30 = $7500

(*Some states, municipalities, and utilities have their own rebates or credits, and the IRS won't let you double dip, so you must subtract those credits from your total to come up with the net cost. People in Baker Electric Solar's service area are not currently eligible for any credits other than the ITC.)

Next, complete an IRS form 5695, file it with your 2015 tax return, and take $7500 off your tax bill. If you don't owe the IRS that much, carry the excess over to your 2016 return. (It's a one-time credit, but you may carry it forward up to five years.)

Easy peasy.

How to Begin Saving Sooner

Your solar tax credit is really like a prepayment to the IRS. So if you don't want to wait until tax time to see your savings, you can decrease your withholding or your quarterly estimated tax payment as soon as your array is running. That's more cash in your pocket today, and another reason not to wait to buy your new system.

(Note: Please always consult with your tax advisor about how tax incentives will work for you before you take action. The tax code is a complex animal.)

Why Is the ITC Important?

Since it was implemented in 2006, the ITC has helped spur the renewable energy industry boom, driving competition and innovation and reducing costs and carbon emissions — a win-win for consumers and the environment.

According to SEIA, from 2010 to 2014, the average price of a residential PV installation dropped 45% and the average price of a PV panel 63%. “The solar industry employs nearly 175,000 Americans, pumps $15 billion a year into our economy and offsets more than 20 million metric tons of damaging carbon emissions into the air. This remarkable progress is due, in large part, to smart, effective public policies like the solar ITC,” said SEIA's Resch.

What's the Catch?

There is none. And other than the usual impenetrability of the IRS form (which providers like Baker Electric Solar will help you with), it's quite painless.

The bad news of this story is that for residential solar, it all goes away December 31, 2016, so make sure your system is online by then or you'll miss out.

Find out how much the ITC can help you save on your new system. Contact Electric Home Energy.

Speak Out for Smart Solar Policy, and Savings

If, like me, you think letting this important policy come to an abrupt end is a dreadful idea, then please contact your representatives and tell them so. Extending the credit has clear benefits for consumers, the solar industry, the economy and the environment.

Contact your congressional representatives!

More information:

https://calssa.org/itc

 

Help to decide whether to get a solar PPA or a solar lease.

Are you deciding whether to get a solar PPA or a solar lease? To someone who does not already have a thorough understanding of how solar power saves money on their electricity bill, the difference between a PPA (Power Purchase Agreement) and lease can be subtle and almost indistinguishable.  Solar leases and solar PPA are arrangements where the homeowner does not own the solar energy installation on their roof, it is owned by the lease or PPA company.  There are pros and cons between this model vs a traditional

different solar contractors have different options from different partners.

finance or cash ownership model, and pros and cons between a solar lease and a solar PPA.  This article should be your starting point in researching which model is the best fit for your individual renewable energy needs.  I point out multiple times below that you must do your own math when comes down to making a decision – different solar contractors have different options from different partners, they will almost always be biased towards the programs they have available.

Here is the difference between a solar lease and solar PPA in plain English, however, most of you will need to continue reading to fully understand.

  • Lease: The homeowner leases the solar panels and components, but the homeowner’s relationship with their utility and how they buy/sell electricity, such as Net Metering, is no different than someone who owns a solar panel system.  The homeowner pays fixed monthly lease payments for the duration of the lease term, usually 20-25 years.
  • PPA: The homeowner neither owns nor leases the solar system.  The PPA company installs their own system on the roof and sells the homeowner the electricity it produces at an agreed upon amount.  Depending on the agreement, the homeowner pays for only the electricity they use not a fixed monthly amount, or they can pay a fixed monthly amount – just depends on which option works best for the individual.  PPA contracts usually last 20-25 years.

Solar PPA and solar leases are so similar that there is no easy answer to which one is best for an individual homeowner.  Different solar contractors offer different solar PPA and solar lease programs and costs can vary widely.  There are prepaid leases, PPA with down payment, zero down, free installation, different kW system sizes and component manufacturers…  It is the homeowner’s responsibility to do their own math.  Until the homeowner feels they have researched all available lease, PPA,

get multiple proposals from several solar contractors

cash and finance (solar loan) options, they should not move forward.  Never rely solely on what a solar salesperson tells you, independent online research on the pros and cons of all options is necessary.  Find out which companies the solar contractor uses as their third-party financing or lease/PPA partners and research them online as well.  You might find that the solar contractor has an excellent reputation, but their PPA or solar leasing company might have hidden up-front costs being passed along to the lessee or unfavorable lease agreement conditions you weren’t aware of.

Something else to be aware of

It is common to be sold a PPA or lease by one company, who then outsources the installation to another, and yet another owns the panels and equipment.  This scenario is common in the lease and PPA industry because the company who sells a lease or PPA is not responsible for the maintenance or production of the solar system, they are simply ‘brokers’ between the homeowner and the company who owns the system on the roof.  Although this arrangement does not necessarily mean the homeowner is getting a sub-par system or being misled, it can mean complications in the future.  Take for example, five years down the road the homeowner discovers their system is not producing the amount of solar energy promised.   They report the issue to the company who sold them the system with the expectation the problem will be resolved quickly.  Unfortunately there could be a lengthy battle behind the scenes as to who is at fault between all the companies involved.  In some cases one or more of the companies may no longer be in business.

Ask the right questions to discover if there are multiple companies involved in the installation of the system and research all of them.  Make sure each company is financially healthy and been in business for a significant amount of time with thousands of satisfied customers.  Check their BBB status and look them up on Yelp.  Generally speaking, it is better for the homeowner if the company who sells the solar system is the same company who comes out to install it.

The real question is should you be financing instead?

In many cases, it is better financially for a homeowner to pay cash or finance a system rather than lease or PPA.  With a lease or PPA agreement, the homeowner is locked into a 20 or 25 year contract, whereas most financed (third-party solar loan) solar power systems are paid off in 12 years or less.  Another benefit to  financing is the homeowner owns the system after it is paid off; unlike at the end of a lease or PPA when the homeowner only has the option of buying the system at fair-market value, or having the lease or PPA company remove it from their roof.  Homeowners who finance or pay

buying the system at fair-market value, or having the lease or PPA company remove it

cash for their solar renewable energy system also get to claim the 30% ITC (investment tax credit) or other tax incentives where in the case of a lease or PPA, the lease or PPA company claims it for themselves.  There can also be challenges selling a home while in a lease or PPA contract, although most, if not all, lease and PPA companies allow the system to be transferred to a new homeowner, some home buyers might simply not be willing to do it.  There are many cases in which the seller had to buy-out the lease or PPA contract before the buyer was willing to purchase the home.  Generally speaking, a solar lease or solar PPA is the best option only when the homeowner does not qualify for financing or does not have cash.

When is a lease or PPA a better option than financing?

Lease and PPA are excellent for people in very specific situations.  Keep in mind that some solar contractors ONLY offer a lease or PPA and are unlikely to provide unbiased information on financing.  They may try to sell a lease or PPA even if financing or cash is clearly the better option.  This is true even of some large national solar contractors that offer no options beyond a solar PPA or lease.  Again, the homeowner needs to get multiple proposals from contractors with a variety of options.

  • People with low tax liability.
    One of the major advantages to owning your solar system vs leasing or PPA is that by owning the system, the homeowner can claim the 30% ITC (investment tax credit).  However, if the homeowner does not have a large enough tax liability, some or all of their ITC could go unused.  But be aware the homeowner does not get the ITC in a solar lease or PPA agreement either – the solar company keeps it for themselves.  This puts the solar leases/PPA on more equal footing as a finance option or cash purchased system.
  • People with credit problems.
    Some people might not have a high enough credit score to qualify for a solar loan.  The credit requirements for a lease or PPA are much lower.  Credit score alone could limit people to only a lease or PPA.
  • No down payment
    Some homeowners are only interested in saving money on their monthly electricity bill, regardless of which is the best long-term option.  For example, they might have an immediate monthly savings of $50 by installing a lease or PPA.  Because leases and PPA programs are generally zero down payment, the homeowner can start saving money with no up-front costs the moment the system is installed.
  • Variable payment
    PPA, not leases, can have a variable monthly cost.  Because with a PPA the homeowner is only paying for the electricity they use, not a fixed monthly lease amount, some people might find this to be the better financial option.  In most cases, however, the PPA company is going to size the solar energy system exactly to homeowner’s needs and the variable monthly cost will even out over time to a similar amount to that of a lease.  In other words, the PPA’s variable payment is likely to be about the same as a fixed lease payment when averaged over time.
  • It’s just simple
    If a homeowner just wants to go solar as quickly and easily as possible unencumbered by research, then a solar lease or solar PPA is the answer.  A few signatures later and an installation crew will come out in a few weeks to install a system.  There really isn’t a logical scenario when this is the right way to make a decision; homeowners should always consider all options and do the math.  Some homeowners are lured into a solar PPA or solar lease because it ‘feels’ like less of a commitment than owning a system, but the reality is a PPA or lease is actually a greater commitment as contracts are generally 20-25 years, where solar financing or a solar loan is generally 12 years or less.

Frequently asked questions

  1. What makes solar energy right for someone’s house?
    There are a few basic qualifying questions, such as do they own the home, have access to the roof (not a condo or similar), and have an electricity bill somewhere around $80 or higher.  If the answer is yes to all of these, solar might be right.  You should contact a solar contractor for more information.
  2. What is a power purchase agreement?
    A Power Purchase Agreement, or PPA, is an arrangement where a PPA company installs a solar energy system on a homeowner’s roof and the homeowner buys the electricity generated by the system at a fixed amount.  The homeowner does not own the solar system.
  3. Is it better to do a PPA or a lease? Why?
    The difference between a PPA and a lease are very subtle, in fact, there almost is not difference from the homeowner’s point of view.  Different solar contractors will have different lease and PPA options.
  4. Why doesn’t a PPA require you to have an electric bill for the excess power needs as well?
    Any excess electricity the homeowner requires that the PPA does not cover will come from the homeowner’s power company.  At night, for example, when the sun is down and the solar panels are not producing electricity, the home will draw energy from the power company.
  5. Which of these options is best for the customer over the long-term? Why?
    If cash or financing is not available to the homeowner, leasing or PPA might be their only option.  Lease and PPA programs vary widely from one solar contractor to the next.
  6. Which of these options is best for the customer over the short-term? Why
    Either a lease or PPA are generally the best over the short-term because they are usually installed with zero-down and no up-front costs.  But this can be short-sighted; in most cases the long-term gains of financing a system outweigh the short-term benefits of a solar lease or solar PPA.  If you go with a least or PPA, make sure it’s for the right reasons – and not because you were lured by short-term math.
  7. Is one of the options preferable based on geographic location (i.e. sunlight exposure) or other factors? Why?
    Geographic location has no impact on lease vs PPA, or lease/PPA vs finance or loan.  Geographic location, sun exposure and similar factors only have an impact on solar system sizing and how it is installed on the roof – these factors are independent of the financial arrangement of how the system is being paid for.  In other words, no matter which financial model you select in order to get a solar energy system on your roof, it has no impact on how the system should be designed.

In summary

You need to hear all options available for putting solar on your roof, from cash to financing to lease or PPA and anything else in between.  Solar contractors have different solar lease and PPA programs from different partners, it is the homeowner’s job to do their own math.  Leases and PPA have become less popular in recent years as the public becomes more knowledgeable on the benefits of owning rather than lease or PPA.  But for some people a

Leases and PPA have become less popular in recent years as the public becomes more knowledgeable

solar lease or solar PPA is the best, or sometimes only, option.  The process of going solar can be somewhat complicated for homeowners whose individual situation is not an obvious fit for one model vs another.  Keep in mind that installing a solar energy system on your roof is a significant expense and can have a significant positive impact on both your short-term and long-term finances.  Because of this, the decision deserves research.  Do your own math.  Speak to your friends and neighbors who have gone solar, but keep in mind your situation may be different.  Here at Baker we pride ourselves on providing unbiased information on going solar, even if it means losing business to a competitor with a better solution for your needs.  We are happy to answer all your solar questions, even if you are not ready to go solar yet.

We’ve made some exciting changes here at Baker and we want you to be the first to know. For over 13 years, we’ve delivered some of the best solar design, engineering and installation in Southern California. During that time, we listened carefully to the needs of Southern California homeowners and so we’ve made a shift. Today, I’m proud to announce Baker Electric Home Energy.

Building on our award-winning solar business we’re now offering Home Batteries, Smart Home solutions and Heating and Air systems. Apart from giving homeowners the ability to generate their own renewable energy, we now provide products and services to manage and use that power to create an affordable, comfortable and convenient lifestyle. And to ensure you get only the best, we’re proudly offering products from companies like Lutron, Nest, Google, Tesla, Ring, Arlo, Samsung, Rachio, ChargePoint, Carrier and Trane.

Baker Electric Home Energy

Our official Baker Electric Home Energy launch is today and very soon we’ll be telling you more about our new set of products and services. Also, watch for great introductory offers you won’t find anywhere else!

Please click here to read our Press Release and learn more about how Baker is now offering you more.

Once again, we’re very excited to have you learn more about our new offerings how they can benefit you and your family. Your trust in our company, its people, products and services is more important than you know. Welcome to Baker Electric Home Energy!

Sincerely,

Mike Teresso
President
Baker Electric Home Energy

You may have heard of the Investment Tax Credit (ITC) that’s being offered from the federal government. It’s a 30% dollar-for-dollar reduction in federal income tax for those who purchase and install a solar system on their home or business. You may have also heard that it’s gone away. But that’s not true.
 
You can still receive up to the full 30% if you go solar now through 2019. The credit allows you to deduct 30% of the cost of your entire solar system on your taxes until 2019, after which it drops down to 26% in 2020 and 22% in 2021. After 2023, the investment tax credit comes to an end for residential solar systems and remains at 10% for commercial systems. 
 
 
 

How Does the Investment Tax Credit Work?

The ITC is a reduction in federal income tax for individuals who purchase and install a solar system on their home (businesses can qualify too). The amount credited is equal to 30% of the purchase price of your entire solar system. It’s not a rebate which helps you pay for your system directly. And it’s not a tax deduction which reduces your total income and thereby decreases your tax burden. It’s a credit against your tax liability — dollars you don’t pay the IRS. However, you do not receive a tax refund if the amount of the solar credit is larger than the amount of the taxes you owe. 
 
ITC expiring soon
 
It works like this: Let's say you purchase a system for $30,000. Take the net cost, which is the price you paid less any other credits or rebates, and multiply that by 30%. $30,000 x 0.30 = $9000. That $9000 is a pretty impressive reduction in the taxes you would otherwise owe. 
 

Who Can Take Advantage of the Investment Tax Credit?

Any homeowner who is a U.S. taxpayer and purchases a solar system through cash, loan or line of credit is eligible for the ITC. However, if you choose to fund your system using a solar lease or Power Purchase Agreement, you aren’t eligible. In this case, the tax credit belongs to the third-party owner of the system who uses it to lower your monthly payments. 
 
And remember, this is a tax credit so you must have a tax liability to benefit. And you must owe taxes at least equal to the amount of tax credit you are claiming. But good news – if you don’t have enough tax liability in the current financial year, you can roll the remaining credit amount over to another year while the ITC is still applicable. 
 
One other condition – you can only use the ITC on the solar system installed on your primary residence. Other homes you may own don’t qualify. 
 
 And as with any tax situation about which you need clarification, a call to your tax professional should be your first move.
 

For more information, visit us at bakerhomeenergy.com or give us a call at 877.578.8080. 

Michael Chagala
Solar and Energy Storage Marketing

Love the idea of a Smart Home? Before you buy, here’s what you need to know.

If you think about it, automated or smart home technology has been around for a long time.  You’ve probably surrounded yourself with smart home devices all your life.  You’ve grown up with them.  Think about it; your garage door opener, the dimmer switch in your dining room, The Clapper.

Ever since the dawn of the industrial revolution, people have been busy replacing manual labor with machinery.  You can thank a bunch of machines for the device you are reading this article on. What about the shoes you’re wearing or the food you’ll eat for dinner?  Machines have allowed the human race to advance faster in the last century than perhaps the previous 10,000 years.  But the industrial revolution is not over.  It’s not a historic period from our past rather it is still very much in full swing.  If anything, the rate in which we are mechanizing the world around us is increasing.  You just need to know where to look.

The mechanization of our environment is not only about replacing factory workers with robots, it’s also about freeing people from the mundane chores of everyday life.  Unlike our ancestors, more time has given us the ability to pursue goals and dreams as well as fit in some leisure time. My great-grandmother made soap by hand, a labor-intensive chore requiring a full day’s work.  Today I can buy a bar of soap on Amazon for 25 cents and have it delivered to my doorstep at a speed that seems to defy logic.  This frees me up to do important things, like re-watching last night’s Game of Thrones.

The mechanization of the home took a giant leap in the 1950s with advanced versions of toasters, refrigerators and washing machines.  Microwave ovens, cordless phones, and the VCR were added in the 70s and 80s.  Computers, cell phones and the beginning of the internet in the 90s.  Fast forward to today and our homes are now a fragmented collection of comfort, convenience, security and communication devices.

Enter the grand notion of today’s “Smart Home”.   The idea of a smart home (also known as or referred to as an internet-connected/wifi-enabled home) has captured the public’s attention because we’ve reached a tipping point.  The exact moment of the tip came when the effort involved in installing, integrating and programming these devices began to outweigh the very convenience they were supposed to deliver.  It’s the modern-day equivalent to the VCR perpetually blinking 12:00 because nobody knew how to program it.  How many remotes would be considered too many on your coffee table?  Five between the stereo, TV and cable box, and another for the ceiling fan?  It’s time to bring intelligence to the simple but sometimes cumbersome things we do every single day.  Here are some examples:  The next garage door opener you buy will have the brain power to open itself as you pull into the driveway.  Your doorbell will ring on your smartphone and you’ll be able to see who’s at the door, no matter where you are.  Your wifi-enabled sprinkler system will detect the weather and behave appropriately.  And with the influx of new smart devices hitting the market daily, the intriguing automated home scenarios go on and on.

But Smart Home is less about the individual devices and more about bringing them into a harmonic symphony of domestic bliss.  The industry has already moved on from the tacky quick-installation ‘smart home’ product you can pick up from your local electronics store.  Today, smart home devices can be integrated seamlessly into your home’s infrastructure and electrical system.  They are now sophisticated systems designed to meet the lifestyle needs of an individuals and families.  Installed by electricians and programmed by experts, the control of your home’s entire ecosystem is suddenly in the palm of your hand.

The question is whom you should reach out for an integrated smart home system?  Most of the individual smart device manufacturers can do nothing more than send you an installation guide.  Others might be willing to install for a fee, but won’t be willing to provide expert consultation and integrate a whole-home system that includes devices from a wide range of manufacturers.  If not careful, you could end up with an expensive set of smart home devices that do little more than add to the collection of remote controls on your coffee table.

So if you’re ready to start enjoying the benefits of these amazing new smart products, look for a home systems integrator with deep experience in the production, management, and use of energy. They should be able to recommend proven yet advanced devices from the world’s leading designers and manufacturers.  And the best companies will program, integrate and educate you on how to get the best out of your new system.  Find a company to expertly curate and integrate the optimal set of smart devices and before your know it, you’ll be relishing your lifestyle, saving energy and money.   

As a company on the leading edge of providing systems designed to produce and manage renewable energy, Baker Electric Home Energy has a strong interest in the using that energy intelligently. With the recent evolution of “Smart Home” devices and technologies, our customers are showing an increased level of interest and awareness and want a better understanding of what’s on the market today. Here’s what we’re telling them.

Everywhere you look someone is using the term Smart Home. We hear it while watching TV; it’s advertised online and in magazines; and maybe your neighbor stopped by just last weekend to brag about his fancy new “smart doorbell”. Today, Smart Home is being used to define specific devices, technologies, and a lifestyle that has built-in intelligence. Smart products are intended to make life easier, more comfortable and in some cases, more secure. Although rudimentary home automation has been around since 1975, suddenly it’s all the rage. So, what’s captured our attention this time around?

Seamless integration of Smart Home devices through one platform, programmed to your specifications including remote access and control from a single app on your phone or tablet — is now a reality.

Let’s take a quick look at the recent past. The term “Smart Home” has been primarily used to describe any number of product categories such as thermostats, lighting and entertainment systems. Each was marketed as the most innovative of their day but for the most part, were a bunch of standalone applications. Easy integration and control were still a thing of the future. But the future is here. Seamless integration of Smart Home devices through one platform, programmed to your specifications including remote access and control from a single app on your phone or tablet — is now a reality. And now that devices can “talk” to each other, the possibilities for your family’s ease, comfort and peace-of-mind are endless.

But before you buy those awesome automated blinds, smart doorbell with a security camera, intelligent thermostat, etc., here are some things you should know.

"Connected Home" vs "Smart Home". What's the difference?

Although these terms are often used interchangeably, they’re fundamentally different. Generally, the industry is in agreement that a “Connected Home” has a variety of independent smart devices with little or no integration and several apps needed for control. A “Smart Home” however, is an intelligent, integrated eco-system of devices. Control can be managed from anywhere via your smartphone, tablet or from home using a voice assistant like the Amazon Echo. The internet and wireless technologies like Zigbee have brought this all together taking Smart Home to the next level.

For a Smart Home to really shine, integration is key and that’s made possible through a hub. The Wink Hub2 and Samsung Smart Things are examples of hub technology enabling these devices to “talk” to each other via a single platform. With these next-generation technologies, Smart Home has quickly evolved from collection individual products to an intelligent, integrated and scalable portfolio of solutions. This could be the answer to achieving a new lifestyle — one that is pre-configured and customized to enhance the way your family lives. Consider these Smart Home scenarios. Each one illustrates possible homeowner preferences and is fully automated.

#1 Your Smart Home sensors detect that you’re pulling into the driveway. Your garage door automatically opens; specialized lighting “scenes” come on in specific areas of your home; each room is automatically “smart zoned” for desired temperature and comfort. Now, take your shoes off and relax.

#2 You’re at work; the kids are at school; the house is empty, the dog is home alone and the outside temperature is going up fast. Your automatic shades lower and close throughout the home. A window has been left open and the AC adjusts to avoid energy waste. The temperature is auto-regulated in each room. You’ve just saved some significant money.

#3 Although your lawn has been scheduled for watering, it’s raining. Your smart irrigation system senses the moisture and shuts down. And because it’s connected to thousands of weather stations, it knows that it will probably rain for the next two days. Watering is automatically delayed. You’ve found a way to conserve water and preserve your landscaping.

#4 You tell your Amazon Echo you’re leaving for a week. Your doors automatically lock; your AC powers down; specific security lighting scenes are activated inside and outside the home. Now, enjoy a worry-free trip.

So how does the savvy homeowner begin? Start with energy. Produce it, manage it and use it with intelligence. A perfect way to begin is with solar + a home battery. Once you own and control your energy, the sky’s limit. Now everything from smart AC to door locks to lighting controls to EV charging and much more — is available to enhance the way you and your family lives every day. Bring it all together and you’ve created a lifestyle eco-system that just a few years ago was only a dream. It’s not quite on par with the Jetson’s – but we’re well on our way.

 

 

Michael Chagala
Manager of Marketing Technology

It's going to happen fast.

A new concept is sweeping the internet that will fundamentally improve the trust, speed, and accuracy of all digital transactions within a few short years. It is based on leveraging communities of computers all working together, using the power of group consensus to make decisions without a central authority. Why is Baker Electric Home Energy interested? Blockchain will fundamentally change how the energy industry operates and Baker intends on being at the forefront of this exciting new technology.

So what is blockchain technology anyway?

what they fail to recognize is blockchain technology itself is the bigger story

Blockchain has been revealed to the world recently as the technology behind Bitcoin. The financial world is buzzing with talk of Bitcoin. How are people becoming Bitcoin millionaires? Should you invest? Is there a bubble? How will it be regulated? And so on. But what they fail to recognize is blockchain technology itself is the bigger story. Blockchain allows billions of dollars a day to move in and out of Bitcoin without the need for direct human intervention or a master record keeper. Blockchain is a way of maintaining the integrity of information by distributing it among a network of hundreds or thousands of computers. There is truth in numbers. For example, a thousand people collectively telling the same story is more trustworthy than an individual. Or think of it like this, you are running a business where it is critical that financial accounting is accurate down to the penny. You could hire one accountant and trust their work to be error-free. Or you could increase the probability of accuracy by hiring two accountants to work independently and compare their results. Hiring a third accountant would almost guarantee accuracy. How about hiring thousands? That’s blockchain.

The blockchain can keep accurate records of anything digital or digital representations of things in the physical world. Perhaps most disruptive, however, is the blockchain can hold executable instructions – or ‘smart contracts’. Smart contracts eliminate the need for third-parties or middle-men to execute the terms of a contract. You might want to look away for this next example if you are a lawyer. Two driverless electric taxis get in an accident. The data logs from both cars are instantaneously uploaded to a community of computers whose job it is to determine fault and cost of repairs. They collectively agree Car #1 is at fault due to a sensor malfunction. A smart contract executes in which funds from Car #1’s insurance company transfer to Car #2’s bank account. The entire process takes less than a second.

The barriers have been purely psychological.

There has been no sudden advancement in technology that has led to the upcoming blockchain revolution. The barriers have been purely psychological. The concept of computers having the final say in moving valuable things in and out of your possession is a bit terrifying. But consider this – every bill you have set to autopay each month is technically a smart contract. Much of your retirement portfolio is traded not by humans, but computers running algorithms. Blockchain simply spreads the decision-making process across multiple computers for improved trust, accuracy and speed.

How exactly will this change the energy industry? From the consumer’s standpoint, it won’t appear to change much at all. Don't count on being able to wake up anytime soon to pay your electricity bill in Bitcoins. The changes will all be behind the scenes. The energy industry operates on layer upon layer of contracts. An electron generated at some faraway solar farm might change ownership several times before reaching your fancy new smart-home dimmer switch. It might be stored, borrowed, lost or stolen along the way as well. All of these scenarios require a complex maze of contracts. All of these contracts will be executed quickly and accurately using blockchain. This will translate into massive cost savings for all parties involved. Except for the consumer, of course, who will always get charged as much as their utility can legally get away with.

This will translate into massive cost savings for all parties involved.

The concept of Bitcoin or any other cryptocurrency coin will play almost no role in the energy industry blockchain. There will not be some sort of energy Bitcoin the various players will be trading back and forth. Blockchain technology does not require a cryptocurrency coin, it is happy to trade in any currency or asset you tell it to. You will hear about various energy coin offerings over the next few years, but this is nothing more than fundraising. A company developing blockchain technology can invent their own cryptocurrency coin and sell it the way another company would sell shares. For example, the company might invent 1 million Acme Energy Coins out of thin air and sell them in an Initial Coin Offering (ICO) event to raise a few hundred thousand dollars. If they need more money, they can invent another million coins and sell them too. The people buying the coins may have no idea there is no connection between these coins and the blockchain technology the company is developing. These companies are not trying to be deceptive, this is fundraising 2.0 in the new digital world. It does, however, leave some unanswered questions about the value of the coins after they are no longer needed for fundraising purposes.

The intensity of the blockchain hype will increase over the next couple years, then quickly die down as people grow more accustomed to it. It will be the technology behind everything from voting to holding the life savings of a farmer in Africa. For now, just enjoy watching it unfold. Watch as industry after industry adopts blockchain. Watch as others resist because it removes their ability to cheat and manipulate. Overall, the world will be a better place with the adoption of blockchain.

Baker Electric Home Energy is watching blockchain technology closely to find ways it will improve the lives of its customers. It is not outside the realm of possibility that someday Baker’s thousands and thousands of solar customers across Southern California form an aggregation of clean power producers. This massive collection of generation would exceed the size of many utility-scale power plants and allow Baker’s customers to leverage financial returns beyond Net Metering. Blockchain technology and smart contracts could be used to automate the entire process. Can you imagine a day when your solar system not only powers your house but is part of a larger system that changes California’s renewable energy future? We can.

Next:

What is the internet of energy?

The Mobile Grid: Secret Life of Electric Cars

Michael Chagala
Manager of Marketing Technology

It will be a billion-dollar industry…

long before you ever see one, perhaps even before the first one is built.

At any point in time, there are visionary people working in basements and coffee shops whose ideas will someday make them overnight multi-millionaires. They are able to make sense out of a seemingly infinite and random set of variables swirling around in what we call the future. They see intricate patterns where the rest of us see nothing. They invent brilliant things that revolutionize our habits and become part of our everyday lives.

I’m going to pull back the curtain and reveal something to you.

Much to their dismay, I’m going to pull back the curtain a bit and reveal to you something still in the basement stage. This will help you skip the “how did I not see that coming” feeling everyone else will have in a few years. Smart parking lots will eventually be an integral part of our everyday life, and will fundamentally change how the grid operates.

To begin to understand the upcoming paradigm shift, you need to stop thinking of electric vehicles as electrified versions of gas cars, and think of them as they truly are – portable power plants. Each one contains a very large lithium-ion (or similar) battery, much of the time charged from free solar electricity. If we pick a number between a Nissan Leaf’s 30 kWh battery and a Tesla 100 kWh, let’s say the average car battery is 50 kWh. To put this into perspective, just 10 kWh (plus solar) and you can take your house off the grid.

Let’s get an understanding of what battery sizes look like on the opposite end of the spectrum. The largest lithium-ion battery installation in the world, located in Escondido, is 120,000 kWh.

Large-scale energy storage projects are astronomically expensive to build. Batteries cost somewhere around $250 per kWh, this means the giant installation in Escondido cost 30 million dollars. These are conservative numbers, the final cost of building a complete energy storage system are actually much higher. The land alone might cost 30 million dollars. Or you can forget these calculations and just know that California’s major utilities have mandates from the state to install a certain amount of energy storage by 2020, and the spend will be in the billions.

So here comes the aha moment. The collective kWh of all the electric vehicles in California today amounts to over 112 Escondido installations! But wait, it gets even better. California Governor Brown signed an executive order to achieve 1.5 million zero-emission vehicles on the road by 2025. 1.5 million electric cars is the equivalent to an absolutely staggering 625 Escondido installations! Think about this for a moment; if you multiplied the world’s largest energy storage installation by 625, that’s how much battery power will be driving on California’s roads by 2025.

Electric vehicles represent a massive untapped resource of distributed energy storage.

It will start with parking lots. High volume. Densely packed. Predictable occupancy. Let’s say a shopping mall’s 7,000 parking spaces were reliably occupied with 10% electric cars. That’s 35,000 kWh, bigger than the battery currently powering an entire island in Samoa. Or how about San Diego’s Qualcomm stadium? If 10% of its 19,000 spots were occupied by electric cars, we’re at 95,000 kWh, surpassing the size of the 2nd largest lithium-ion installation on the planet. As more smart parking lots get built, the more the grid will begin to rely on them. Eventually, there will be a tipping point in which enough electric cars are parked in smart parking lots in any hour of the day to fully satisfy the grid’s energy storage needs.

The person who develops the technology to connect electric cars to the grid as a distributed energy resource will be an overnight multi-millionaire.

The physical infrastructure for a smart parking lot is not as complicated as you might think. If a developer was building a parking structure, they would lay a network of wires in the ground connecting each parking space. There would be a cable for the car owner to plug into their vehicle, which they are already accustomed to doing. These cables would all feed into a series of components like inverters and voltage regulators, then connect to the grid. This would hardly present a challenge to the construction companies and electrical contractors who already build parking lots. Even from the utilities’ point of view, there is nothing exotic about this, it’s just another large-scale energy storage installation.

where the overnight multi-millionaires (or billionaires) will be made

The uncharted territory, and where the overnight multi-millionaires (or billionaires) will be made, lies in the blockchain, smart contracts, and algorithms that control it all. A LOT of factors that I’ve skipped over the need to be taken into account. Who will write the software giving your car the intelligence to buy and sell energy while you’re in the mall buying yoga pants? How are car owners compensated? What percent of their battery are owners willing to designate for energy storage services? How full is the average battery when it enters the lot? Are all electric cars capable of exporting energy? How does it work when the utility needs to push energy, rather than pull it? If the car owner doesn’t have a cheap source of electricity to fill their battery, such as solar, does this make financial sense? If not, will these parking lots be empty when it’s overcast? Qualcomm is only guaranteed to be full on certain days a year. Mall parking lots are empty at night (maybe not, stay tuned for my future blog on the Secret Life of Self-driving Cars).

These questions need to be answered before utilities will see smart parking lots as a reliable source of energy storage. In the meantime, there is already a financial case for these lots, which will eventually provide the proof the utilities need to see. Qualcomm stadium might power its lights using the electric cars parked in its lot, or the mall might use its collective energy storage to avoid demand charges. Maybe joining as a ‘member’ of a smart parking lot network means you can pull into a lot and charge your battery at a discount from the cars parked around you. Put solar on the roof and the financial picture gets even brighter.

Instead of paying a parking meter, it will pay you.

In a few years, you’ll forget that you once had to pay to park. Smart parking will quickly become the new norm. You’ll come to expect 10% off your purchase because you parked in the mall’s smart lot. Instead of paying a parking meter, it will pay you. It might not feel ‘free’ since you may park your car with a full charge and return to half a tank – but energy storage works in both directions, you are just as likely to park with half a talk and return to a full battery. Your car will be smart enough to only engage in a transaction if it’s profitable (see my last blog on the Internet of Energy).

If you’ve always felt destined to be one of the world’s 1,810 billionaires but didn’t know where to start? This is it. There are only a few people working on it, well, prior to this blog anyway.

Michael Chagala
Solar and Energy Storage Marketing

There’s only a few times in a person’s life when something integral to their everyday world gets turned completely upside down.  A disruption to a routine long since accepted as the norm.  A spectacular solution to a problem they didn’t know they had.

You have long since submitted to your electricity bill.  It’s egregious and continues to rise.  You grumble a bit as you write the check each month, but quickly move on to problems you can control.

You have been powerless until now.  But this changes everything.

Solar + energy storage, also known as a home battery, is the paradigm shift in electricity you never saw coming.  It means total control.  It solves a problem everybody has been ignoring.  It would be like waking up tomorrow and gasoline was free, or fresh drinking water bubbled up from the ground in the back yard.  Sure, solar panels are a smart purchase, but are only a half-measure to what is truly possible.

Energy storage holds onto your electricity and gives you maximum control over how it is used.  People have grown accustomed to the fact electricity is fleeting – the very instant it is created, it is gone.  This means the electricity generated by your solar panels is either put to work running your pool pump, or gets sent back to the grid where you once again have no control.  It also means you are 100% dependent on your utility, even if you have solar.

Energy storage empowers homeowners to manage electricity in a way never before possible.

  • Self-consumption: Want to run your house on solar power both day and night?  Home batteries can do that.  Instead of exporting your excess electricity to the grid, store it in your battery and use it at night.  Whatever you don’t consume gets sent to the utility for further savings.  And you remain connected to the grid in case you need a little extra juice.
  • Backup power: If the grid goes down, so does the safety and comfort of your family.  Think your solar panels will keep you powered?  Think again. Most solar systems turn off when the grid goes down.  But energy storage leverages the power of your solar system giving you anywhere from several hours, to several days of backup power.
  • Time-of-Use: If you went solar after mid-2016, or plan to go solar in the future, you are in for a big surprise.  SDG&E has changed the rules.  Soon, they will give solar homeowners less credit for the surplus electricity they put back on the grid during the day.  With energy storage, you control the time of day to export your power, protecting your solar investment.  More on this later.
  • Off the grid: Rural or just want true energy independence?  Say goodbye to your utility forever with an off-grid system.  Generate and store electricity completely shielded from the outside world.  Building a home?  An off-grid system might be cheaper than connecting to the utility.

This is why you will buy a battery.

Did you go solar after mid-2016, or haven’t gone solar yet?  You are about to be rocked by a massive change to how you pay for electricity: the new rate structure called Time-of-Use.  It means electricity will cost more depending on the time of day it’s used.  And if you currently have solar, the electricity you export to the grid during daytime will be worth dramatically less that it was before.  In short, you’ll pay more for electricity in the late afternoon and night, and get paid less for the solar you generate during the day – a double whammy.  Homeowners and their families will find themselves having to make lifestyle changes in order to avoid expensive bills, such as a prohibition on running appliances after 4pm.

The future of energy storage.

Some people will choose to buy batteries simply to lower their electricity bills, but that’s just the beginning.  Energy storage fundamentally changes the very nature in which homes and businesses manage electricity.  The days of buying overpriced electricity from sources dependent on non-renewable fossil fuels will end abruptly in just a few short years.  You look around and see solar panels on nearly every roof – the same will soon be true of home batteries.  Millions of people generating, storing, and using their own clean, renewable energy either zeroing out their electricity bill or certainly paying less than they are now.     

Baker has been monitoring the emerging energy storage industry for quite some time.  As we watched home batteries begin to come on the market, our challenge was clear.  Choose the right companies with which to partner and create a portfolio of the most technically advanced and proven storage solutions on the market.  After more than a year vetting and installing numerous home battery options, it became very apparent there is no single energy storage product right for everyone. Therefore, identifying an intelligent and robust set of battery solutions capable of meeting any homeowner’s unique requirements was critical.  We believe our partnerships with four of the world’s leading home battery companies has allowed us to accomplish this goal better than any other local solar provider.      

To answer your final question: no, it’s not expensive if you act fast.  While the Federal ITC tax credit and California’s SGIP incentive are available, a home battery is within your budget.  Adding a battery to your home can cost less than a daily latte.

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