The one thing that could make or break solar energy

The one thing that could make or break solar energy

REUTERS/Carlos BarriaA worker inspects solar panels.

One of the more important and misunderstood parts of the solar industry is the impact policy has on making solar energy viable in the electric grid. Without policies like net metering -- which allow solar customers to send extra electricity back to the grid during the day and only pay for net usage each month -- companies like SolarCity (NASDAQ: SCTY) and Sunrun(NASDAQ: RUN) wouldn't exist. Policies like feed-in tariffs and renewable requirements that promote large solar energy projects in California, Japan, and Germany have also created demand for projects from SunPower (NASDAQ: SPWR) and First Solar, which has allowed them to grow.

I'm not talking about subsidies, like the US' Business Energy Investment Tax Credit, but rather ways the solar industry gets access to the grid, particularly for very small projects. 

But as the solar industry grows to become a larger piece of the electric industry, it puts a strain on utilities that aren't used to customers creating their own energy and have to deal with the supply and demand changes solar energy brings. As a result, many utilities and governments are either fighting solar or changing the policies that have caused its growth in the first place. Here are some important trends to watch and who might be affected.

Solar policy wins As utilities have tried to fight solar, there have been some important wins for the industry. These are often seen as signs of a positive policy environment, at least in the U.S.

A Wisconsin state court recently overturned regulator-approved charges for solar customers in WE Energies' territory. Charges based on the size of a solar system were overturned because the utility couldn't prove that residential solar really cost it money, especially with extremely low market penetration in Wisconsin. 

In August, after NV Energy said it had hit the solar cap for net energy metering, the Nevada Public Utilities Commission decided that it would allow the policy to be expanded to new customers until the end of 2015 when a new policy could be decided on. 

Arizona's utility proposals to increase grid access charges for solar customers from $0.70/kW to $3/kW was withdrawn after a public outcry against the fight on solar.

In nearly every case where solar energy has been challenged the solar industry has won, either on the regulator level or in court against utilities. But that doesn't mean policy will always be favorable for the solar industry, and changes are definitely coming. 

REUTERS/Jean-Paul Pelissier

Clouds are forming for solar In Hawaii, regulators recently released solar tariff plans that include a self-supply and a grid-supply option. Self-supply will be great for energy storage assisting self consumption, but it eliminates the ability to feed solar energy to the grid. The grid-supply option reduces what solar customers are paid from the net energy rate to the wholesale energy rate, or from about $0.30 per kWh to about $0.15 per kWh. That's a big reduction in the value solar provides to homeowners. In both cases, it will be less profitable to install solar in Hawaii than it was previously.

California is also discussing what's known as net energy metering 2.0, which will change how much homeowners are compensated for solar energy. This could include lower tariff rates, fixed charges, and other fees that make solar less economical. Initial proposals were submitted earlier this year, and a plan is due later this year.

What's clear is that where solar energy has the highest penetration -- and therefore the biggest markets for solar companies like SolarCity, Sunrun, and SunPower -- there are going to be changes that will make solar less attractive to customers in the near future. That's the bad news.

The light at the end of the tunnel What's good for the solar industry is that any changes to net metering will likely be good for energy storage and a broader range of energy services. SolarCity and SunPower are investing heavily in these new broader offerings, which will be able to take advantage of changing rates or the need for self consumption. If done right, that could be an advantage for both going forward.

Sunrun, on the other hand, will need to adapt its business model to keep up in a new energy world.

Policy is important for the solar investor, and while it may not be something you pay attention to every day it's worth understanding what the trends are. For now, the solar industry is in business as usual, fighting off challenges from utilities across the country and winning. But as the industry grows there is a need for reform in energy rates and utilities, and regulators are learning how best to make solar work for homeowners and the grid. That can be an advantage for a solar company or a threat. So it's important to understand how the stocks you own will be affected positively or negatively by the changes we can see coming a mile away.

Read the original article on The Motley Fool. Copyright 2015. Follow The Motley Fool on Twitter.

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Our Solar Bonanza!

Our Solar Bonanza!

We’ve had solar power energizing our house in Sag Harbor on Long Island in New York for six years now—and it’s a bonanza!

Once the photovoltaic panels are up on your roof, nothing more needs to be done. They harvest electricity from the sun even on cloudy days. Never in the half-dozen years have the 38 panels on our roof needed any care. And frequently, looking at the Long Island Power Authority meter attached to the house, I see the numbers going backwards—we’re producing electricity for LIPA for which LIPA reimburses us.

Then there are the two thermal solar panels heating up water and sending it—very well-heated—into the house. The other day, it was 64-degrees outside but the thermometer on the hot water tank in the basement showed water from the thermal panels coming down at 130-degrees. Amazing! And these panels are also care-free.

Meanwhile, the price of solar panels have plummeted since the panels were installed at our house—and efficiencies have gone up, Dean Hapshe of Harvest Power was saying the other day on a visit to check our installation.

Mr. Hapshe of Patchogue, New York is a master teacher of solar installers on Long Island. He entered the solar energy field in 1980 and with his decades of experience has served as an instructor of others in the industry.

When he and his crew put our system in, the cost of the photovoltaic panels, which produce 7,500 watts—an average-size system—was $6 a watt. “Now it’s down to $3.65,” Mr. Hapshe was saying. The efficiency rate has risen to 21%—getting close to the 25% efficiency of solar panels on space systems such as satellites and the International Space Station. That means more electricity is generated for every ray of sunlight.

The thing about solar power is that the sun sends no bills.

And that has been vexing for electric utilities around the nation.

Indeed, the motto of Harvest Power, which is based in Bay Shore, New York is: “Let The Sun Pay Your Electric Bill.”

“Utilities wage campaign against rooftop solar,” was the headline of an article in March in The Washington Post. The story, by Joby Warrick, a Pulitzer Prize-winner who often writes on energy issues, begins: “Three years ago, the nation’s top utility executives gathered at a Colorado resort to hear warnings about a grave new threat to operators of America’s electric grid: not superstorms or cyberattacks, but rooftop solar panels.”

“If demand for residential solar continued to rise, traditional utilities could soon face serious problems from ‘declining retail sales’ and a ‘loss of customers’ to ‘potential obsolescence,’ according to a presentation prepared for the group. “’Industry must prepare an action plan to address the challenges,’ it said. “The warning, delivered to a private meeting of the utility industry’s main trade association, became a call to arms for electricity providers in nearly every corner of the nation.” The article continued, “Three years later, the industry and its fossil-fuel supporters are waging a determined campaign to stop a home-solar insurgency…”

The New York Times, in an editorial last year titled, “The Koch Attack on Solar Energy,” noted how “the Koch brothers and their conservative allies in state government have found a new tax they can support. Naturally it’s a tax on something the country needs: solar energy panels.”

The Times told of how the Koch brothers, their Koch Industries based on oil refining, “have been spending heavily to fight incentives for renewable energy, which have been adopted by most states. They particularly dislike state laws that allow homeowners with solar panel to sell power they don’t need back to electric utilities.”

On Long Island, support for solar power by LIPA—created with a mission to advance the development of solar and other forms of renewable energy on the island—has gone down and down. The once hefty rebate LIPA provided for solar installations has now descended to a paltry 20 cents a watt.New York State, however, still provides up to $5,000 in support for an installation, and the federal government offers a tax credit of 30% of the cost of a solar system. But this program needs to be extended at the end of next year.

The capacity and economics of renewable energy are simply wonderful. The New York Times recently ran a front-page story headlined: “In Texas. Night Winds Blow in Free Electricity.” It told of how in Texas “wind farms are generating so much electricity” that it is now being “given away.”

There are those who seek to profit from expensive electricity generated by oil, gas, coal and nuclear power—and they would try to suppress the renewable energy revolution now underway. They must be stopped, and the windfall of safe, green, inexpensive electricity be allowed to flow.

California Solar Power

' California Solar Power  How To Get A Free Quote On  A Solar Power System  For My Home Or Business? Solarcity will lead you into  all your inquiry My name is Pierre Godin and I am a representative of Solar Power Installation.  I will help you get all the information you need to get a  solar power system implemented quickly.  The system can be bought out but I am offering you to get it financed.  Solarcity offers a chance to get your own power with no money down.  You end up paying less the very first month that you have a  solar power system on your home or business. You have an average credit?  You pay more than $80 a month in electricity to the big energy company? You have a sunny south roof? Those are the main criteria to qualify.  Why SolarCity? We're America's  #1 full-service solar energy provider. We've created clean, more affordable energy solutions for Fortune 500 companies, cities and schools throughout the U.S. See how we can help your organization.  Solarcity will take care of everything. from designing your soalr panel system on the roof to monitor in case of problems. The average home needs a 10 KW system which would be very expensive to have to pay for at once. This is a no brainer. It's like someone giving you money every month for going with a solar power installation. And you have control of your power. Take advantage of this short time promotion and be a fighter for the environment. Not by signing petitions or holding up a sign. It never got us anywhere. Lead by example.                       Experience We currently install 1 in every 3 residential solar power systems in the U.S., but we also think big. We've helped businesses, governments, schools and other agencies install large scale commercial solar power systems to help them meet their sustainability and financial goals. Our clients include eBay, Walmart, the City of Sacramento, Los Angeles Unified School District, Boulder Valley School District and more.                        High quality Our emphasis on quality goes beyond solar panels and software. We've hired the brightest talent in the solar industry. Our team includes numerous NABCEP-certified supervisors overseeing your projects. That's the highest accreditation in the solar industry. It a perfect match for our "A" rating from the Better Business Bureau. Latest solar technology We evaluate and select only best-in-class technology for your solar energy project based on performance, quality and cost effectiveness. Once your system is up and running, our proprietary monitoring system tracks both your energy production and usage to give you a more complete picture of your energy needs and costs. Zep Solar commercial solutions One of the secrets to our success is our proprietary solar panel mounting technology. Zep solutions substantially reduce the cost and complexity of designing, shipping, warehousing and installing PV systems. Solar financing advantage Switch to solar with no upfront capital costs and start saving on electricity as soon as you turn on the power. Our Solar Power Purchase Agreement (PPA) is just one of the flexible financing and purchase options we offer. Direct financing, instead of financing through a third party, means that you'll have a single point of contact for all of your solar financing needs. Competitive price We've installed thousands of solar power projects across the country. Each one has helped us fine-tune our project management system and drive down costs. Operating on this scale lets us build strong relationships with our suppliers who give us volume discounts that we pass along to our customers. Environmental stewardship We're on a mission to drive down the cost of clean solar energy. We've received many environmental leadership awards from the Aspen Institute and Acterra for our efforts. We were also recognized as the a Green Power Supplier of the year by the Department of Energy (DOE) in 2010. Join us. Take control of your energy cost while helping to build a cleaner future. Full solar energy service We’re your all-in-one solar energy provider. Our in-house team will take care of every part of your project including financing, custom engineering, solar panel installation and ongoing system monitoring. You’ll also get a dedicated SolarCity Sales Manager who will keep you up-to-date on your project status and answer any questions you may have.