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ATTENTION: SOLAR OWNERS!
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Elliot Johnson
Mueller Community

Posts: 20
Joined on August 28th, 2013
ATTENTION: SOLAR OWNERS!
by Elliot Johnson on September 19th, 2013

Hi all,

A group of concerned citizens, and a number of solar groups (including Solar Austin, and Mueller Megawatt), met twice over the last few weeks, to discuss all these issues.

A board member of Solar Austin met with an AE VP , and they are discussing trying to get a rolling credit established.

Several other issues are equally important, one is that the VOST is adjusted every 12 months, so the 12.8 cents you receive, can be adjusted up and down.

There was a lot of discussion at the meetings, and no unified position. However, in general, it was felt a rolling credit would be beneficial and some sort of stabilized VOST (i.e. a 3, 5 or 10 year rate) was a starting point.

We should hear back from AE in the next week or two. I will update this post when we know more.
 
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danx111
Mueller Community

Posts: 1151
Joined on November 25th, 2008
ATTENTION: SOLAR OWNERS!
by danx111 on September 19th, 2013

Quote:
Hi all,

A group of concerned citizens, and a number of solar groups (including Solar Austin, and Mueller Megawatt), met twice over the last few weeks, to discuss all these issues.
A board member of Solar Austin met with an AE VP , and they are discussing trying to get a rolling credit established
Several other issues are equally important, one is that the VOST is adjusted every 12 months, so the 12.8 cents you receive, can be adjusted up and down
There was a lot of discussion at the meetings, and no unified position. However, in general, it was felt a rolling credit would be beneficial and some sort of stabilized VOST (i.e. a 3, 5 or 10 year rate) was a starting point
We should hear back from AE in the next week or two. I will update this post when we know more.


thanks, Elliot
 
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langhugh
Mueller Community

Posts: 1149
Joined on August 18th, 2007
ATTENTION: SOLAR OWNERS!
by langhugh on September 19th, 2013

Quote:
Several other issues are equally important, one is that the VOST is adjusted every 12 months, so the 12.8 cents you receive, can be adjusted up and down.


Thank you, Elliot. This is the money quote for all who seek a perpetual credit. 1. Solar owners signed a contract when we received tens of thousands of dollars to subsidize the installation of their array. In it, the utility can mess with the billing however they please. 2. If all AE hears from us is that many solar owners feel entitled to the credit that AE subsidized, they may have a variety of remedies. From lowering the VOST to zeroing out the credit each month, there are a range of options that throw the baby out with the bathwater.

Please understand that the vast majority of solar owners (95%...98%..99.99%???) are better off under the current algorithm than they were under net-metering...even after AE raised the fixed customer charge concurrent with the VOST. If interested, here was the initial methodology behind the shift to VOST: http://www.cleanpower.com/wp-content/uploads/090_DesigningAustinEnergysSolarTariff.pdf

It sounds like solar owners are well-represented by the group Elliot mentioned, and a rolling 12-month credit can be achieved (if AE's notorious billing system can manage it). this would be a reasonable outcome to our first-world problem. We are privileged to have a public utility to even entertain these conversations.

Dusty

 
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danx111
Mueller Community

Posts: 1151
Joined on November 25th, 2008
ATTENTION: SOLAR OWNERS!
by danx111 on September 19th, 2013

Quote:
[quote]Several other issues are equally important, one is that the VOST is adjusted every 12 months, so the 12.8 cents you receive, can be adjusted up and down.[/quote.
Dusty



Dusty, you are correct - ".....the utility can mess with the billing however they please." Having the power to do as they wish doesn't mean they will do the fair or equitable thing - refer to the Sept 2009 rebate decision. Note that Austin Energy is owned by the City of Austin and manages/administers the COA Solar Program.
There are a fair number of solar owners who will have extra power at different times in the year. Some have planned it that way and others find themselves in that situation due to unforeseen circumstances. There is no "good" plan to take that energy.
 
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Jeffrey Dwyer
Mueller Community

Posts: 16
Joined on July 25th, 2013
ATTENTION: SOLAR OWNERS!
by Jeffrey Dwyer on September 20th, 2013

Hi Langhugh,

Don't you think it is fundamentally unfair for AE to clawback a portion of the solar rebate only from solar customers who generate the most electricity in proportion to what they use while having no such requirement for solar customers who generate far less than what they use? Paying back money that was given is a loan not a rebate.

AE is in violation of VOST! VOST is not some subjective approach to assigning value to solar, it is quite the opposite. True, AE could abandon VOST.

Perhaps AE and others should study the following from April 9, 2010:

City Council Adopts New Energy Code Amendments; Action Moves Austin Closer to “Zero-Energy” Homes:

"The series of amendments move Austin closer to the goal of the Austin Climate Protection Plan to make new homes built in 2015 65% percent more efficient than those constructed in 2007. The increased efficiency of the new homes due to the code amendments also will make them Zero-Energy Capable in 2015. Zero-Energy Capable is defined as being so energy efficient that it is cost effective to install enough on-site renewable energy collectors to make the homes truly net-zero energy homes."

I achieved this goal of the Austin City Council in November, 2011. My reward for this is receiving less than the 12.8¢/kWh than those who have fallen short of the stated goal. There is no incentive for anyone else to achieve Council's goal. In fact, as I have pointed out on numerous occasions, there is substantial disincentive to build or remodel to net-zero energy.

I have no faith that a solution to this will come from AE. I think it will have to come from the Austin City Council.



 
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Jeffrey Dwyer
Mueller Community

Posts: 16
Joined on July 25th, 2013
ATTENTION: SOLAR OWNERS!
by Jeffrey Dwyer on November 17th, 2013

Hello All,

A few weeks ago, I sent a letter to all of the City Council members, and I think the Mayor as well, through a link at the City of Austin website. I outlined my concerns regarding several issues with AE's solar program including the coming January 1st reset of surplus dollars generated by some solar customers to $0.

I received a response on November 8th from Kurt Stogdill, who is the Interim Solar Program Manager with AE. Essentially, all of my arguments were rejected and my suggestions were dismissed. I was told that AE's solar program and policies were designed to benefit the vast majority of ratepayers seeking to implement solar, even if there were some unintended consequences for some of us.

I currently have a surplus of nearly $400. My home is heated with electricity. Because of my electric heat and the lower production of my solar panels in January and February, I will not produce enough electricity to offset these bills even though I will have a surplus very soon afterwards. I will be required to pay those bills when due or face late fees and disconnection of services. Later in the year when I am in net surplus for the year, these payments will not be refunded!

This is just the latest shoe to drop in this debacle and I am not sure it is the last one. If I had taken the advice of some at AE and purchased an electric vehicle to use up the surplus, these non-refunded payments would be even higher.

The explanation I received about resetting the surplus to $0 instead of refunding the surplus with a 1099, is that "if Austin Energy were to consider the solar production as taxable income it is anticipated the negative tax consequences to the solar customer would far exceed the benefit of any refund." This is absurd. AE is not the arbiter of whether or not surplus refunds are taxable income. The IRS is. And, surplus payments would not be taxable income until the amount of the refunded surplus exceeded the net cost of the solar system after AE rebates and federal tax credits. In my case, it would take more than 16 years for a $400 annual surplus payment to offset my net system cost of $6500. I would then replace inverters at a cost of $4000, if they had not previously failed, and it would take another 10 years of $400 annual surplus to offset that. My system would then be at the end of its useful life and $10,400 of surplus payments over 26 years would still not result in a taxable event.

Kurt Stogdill also stated in his letter that "a system that generates revenue is ineligible for the federal tax credit (FTC)." I have studied IRS form 5695, which is used to claim the solar tax credit, and I have read its instructions and I cannot find this limitation in these documents or elsewhere. The form and its instructions do indicate that there is no limit to the tax credit. If anyone can point me to a resource that would provide clarity on this I would be grateful.

Another justification for resetting the surplus to $0 is to discourage over-sizing of residential solar systems. A better way to avoid over-sizing, while still encouraging maximum efficiency of the building envelope is to set a maximum on the number of installed watts of solar panels that can be rebated per total square footage of the home. Under current policy, the financial incentive is to build the least efficient structure that will qualify for solar rebates and then maximize the solar array. I could easily have saved $6500 in remodeling costs by building less efficiently and I would still have net $0 annual electrical consumption. If AE had a maximum of 5 watts of solar that would be rebated per square foot of my 1200 square foot home, then my system size would be 6kW instead of 8.2kW and AE would have saved $5500 in rebates.

A few years ago when the solar rebate was still $4.50 per watt, the 30% federal tax credit was implemented with no cap. Understandably, it took AE some time to react to this and lower their rebates in response to the new market conditions. Many customers who were in the process of having solar installed benefitted from this short overlap in very high AE rebates with the new federal tax credits. They were not penalized for this and neither should any of us who have participated in the program.

The policy in place at the time I had my system installed was for surplus to be applied to the other other parts of the utility bill. If this cannot be done, then send a refund check with a 1099 and stop pretending to know better than us how to handle our taxes.

I have not received a response from any of the council members or their staff, so it seems to me that council is going to simply defer to AE to deal with solar.

When a set of policies is implemented with an apparent motive of social justice over good business sense, the "unintended consequences" quickly pile up and threaten the viability of the program.

Regards,

Jeffrey T. Dwyer
 
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danx111
Mueller Community

Posts: 1151
Joined on November 25th, 2008
ATTENTION: SOLAR OWNERS!
by danx111 on November 17th, 2013

Sounds like the same attitude they exhibited over the retroactive rebate cancellation. SSDD......
 
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paulsjv
Mueller Community

Posts: 191
Joined on September 5th, 2008
ATTENTION: SOLAR OWNERS!
by paulsjv on November 17th, 2013

Good luck getting AE to change anything. There just aren't enough people (IMO) that are going to care enough like yourself to make a hill of beans difference.

It sucks and is all about the money not what is in the interest of customers. Too bad we don't have competition because this kind of thing wouldn't be an issue if we could move to a different provider.

 
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Elliot Johnson
Mueller Community

Posts: 20
Joined on August 28th, 2013
ATTENTION: SOLAR OWNERS!
by Elliot Johnson on November 20th, 2013


A few of us went to the Solar Austin meeting last night which had Karl Rábago speaking about the Value of Solar Tariff, it was a good discussion and quite a few questions where answered.

Since this is long, for those of you that want to skim it, I would also like to propose another meeting to discuss these, how we can help Solar Austin and anything else the first week of December.

Solar Austin
For those that have not been, this was my first, it was a huge group of Solar enthusiasts, all very welcoming and a fund and social gathering. I would encourage you to attend in the future.

Update from Charlie
I caught up with Charlie at the beginning of the meeting very briefly. He reiterate that he felt 'confident' that AE could figure something out with a rollover. He did not give me any ideas on timing. I still think we need to lay some ground work for assuring this.

Rollover/Credit Refund
Karl discussed credit refunds during his presentation. Summarized. Basically AE, did not want to issue refunds mainly to avoid the appearance of subsidizing Solar, and also there are some potential Tax Credit/Tax income issues. After further discussion he clarified that the IRS has an 80/20 rule about use versus revenue. I also have a call into the governmental affairs person at SEIA to verify this.

This should clear the road for this allowing for a rollover or credit refund, as AE is oversimplifying their comments, almost all solar users with a credit should be well below the 80/20 rule and its a buyer beware issue. 11 states have indefinite rollovers of Net Metering credits. I think trying to get a refund for the surplus would be hard, however we should present it, the consumer could sign something saying they would assume the responsibility for Tax issues, and maybe pay a fee for the 1099. Dont know.

VOS - VOS - VOS
This is a very serious issue!
At the end of the presentation, Karl, made a very telling comment. At a solar conference in Chicago, he was informed earlier this month of the new VOS of 10.7cents, by Leslie Libby. They both were very happy and view this as a 'win'. The telling comment is that he was very concerned that AE would have tried to 'gut' the VOS down to net metering levels, i.e 3 cents.

AE is tweaking the methodology of the VOS, it all seems legitimate, Karl made the comment of fighting for a few parts of the new Tweak, which I believe the Solar advisory committee/Solar Austin intend to do. He talked about how part of it is tied to the price of natural gas, which is lower this year, but expected to rise over the coming years, and therefore the VOS would go up.

The chief thing that Charlie, as the president of Solar Austin promised to try to promote, was to have the VOS methodology to become more open and transparent.

Multi-year VOS
On Council Member Bill Spellman's talking points, he talks about a multi-year VOS. (I think we need to get him to readdress the issue)
http://austintexas.gov/page/council-member-bill-spelmans-jan-27-rate-design-discussion-points

It is my opinion that a multi-year VOS would be beneficial for both AE and the consumer. from 2006-2011, the VOS varied from 10.3-16.4 cents. A high VOS has the potential to create a lot of surpluses, and a low VOS has the potential to making the PV system payback longer and for the consumer to be paying for their own Solar use.

I propose that we pursue two scenarios;
1. A multi -year levelized VOS - reevalute the VOS every year, however, tie it to a 5 year average. From 2006 to 2011 the average VOS 13.02 cents, adding this years 10.7 into the mix would reduce that to 12.6, even taking out the high of 16.4, levelizes the VOS at 11.88. This benefits the utility and consumer in avoiding really high swings in the VOS, 16% this year. Maybe this year is a fluke and it will do nothing but go up in the future.

1. A VOS tied to a PV systems payback - this is complicated for AE billing - however most fair and stable for the consumer. Whatever the VOS is at the time of the PV installation, that VOS would be the minimum for the 8-10 years of the payback to assure the consumer is covered for the cost of their system, and thereafter if it goes down then the utility and the consumer share equally in the benefits of the system. If the VOS rose during the time, the clients could go up, but there would be a minimum. I think this protects the consumer's investment, yet does create a long-term encumbrance to the utility.

I also think the VOS needs to be updated and consumers notifies sooner than 1 month prior to the rates adjusting, and I think there are some discussion about AE needing to be more flexible, but I will save those for later.

Thanks for reading.
Let me know if you have any questions.
 
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Elliot Johnson
Mueller Community

Posts: 20
Joined on August 28th, 2013
ATTENTION: SOLAR OWNERS!
by Elliot Johnson on December 7th, 2013


The Value of Solar Tarrif (VOS) will be going down from 12.8c to 10.7c. for 2014.

This will essentially increase your utility bill by 16% /-

If you are concerned about this, please reach out to your City Council. There is a link in David's newsletter.

Check out David Dixon's newsletter.

http://buildnative.com/solar-under-attack/?utm_medium=email&utm_campaign=Solar Under Attack in Texas - December 7 2013&utm_content=Solar Under Attack in Texas - December 7 2013 CID_0c3f4c7c879645d81c895cfd0b9785e9&utm_source=AscendWorks Bullseye
 
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