Category: News

Solar power is becoming ever more popular as homeowners recognize the financial benefits of going solar. There’s no lack of professional installers to choose from, but homeowners who are a little handier than the average person are often interested in taking the DIY approach to building and installing a solar power system and saving a little money.

There’s plenty of information available online on the basics of mounting panels to a roof. You can buy all the equipment you need for a system piecemeal, or buy a complete DIY solar kit. And not only that, if you’re willing to trade some efficiency for cost, you can buy used or even slightly damaged equipment from resellers.

For people who are committed to DIY solar, there are plenty of options. But are they right for you and your home?

What are you using your DIY solar system for?

Before you start working on a DIY solar system for your home or property, you need to establish what you’re intending to use it for. This will determine the overall size of the system you’re going to install, how many solar panels you need, and what hardware you need to support them.

Most DIY solar systems are better suited for smaller-scale, off-the-grid setups. Powering an RV, or a tiny house are reasonable goals for off-grid DIY solar. If your energy needs aren’t particularly demanding, then a small DIY system can be more than enough. But if you’re thinking about powering a suburban home, you are going to need something that is much larger and scale.

The average US home consumes about 900 kWh of electricity each month, though your usage will vary depending on your household, where you live, and what time of year it is. A small DIY system isn’t going to power a typical suburban home, and it might not even provide enough electricity to put much of a dent in your monthly energy bill. Basically, if you look at your electricity consumption on a month to month basis, you can establish a baseline for what sort of DIY system you need and want.

Do you know if your roof is right for solar?

Chances are, you’re planning on mounting solar panels on your roof. It doesn’t take up backyard space, and ideally, it’s in direct sunlight for most of a day. But before you start climbing all over your roof, you should probably find out if your roof is suitable to mount anything on.

Roof-mounted solar systems are affected by different aspects of a roof. The material used, the pitch of the roof, its size and shape, the orientation of the home, and even the amount of shade you can expect throughout the day.

Also bear in mind that you’re going to have to hire a licensed electrician or a structural engineer—or possibly both—to examine your home and the roof. It may well be that your existing wiring isn’t up to code, and any work which modifies it will require that all your wiring be brought up to code.

Roofing materials:

Most roofing materials are compatible with solar panels. Asphalt shingles are the most popular roofing material in modern homes today, and they are also among the most compatible with solar panels. They can accept any mounting racks for solar panels, and whatever is needed to fasten them in place. Metal and tile roofs are also a good fit for most rooftop solar systems.

But if your home has a wood shingle or slate roof, you might be in for some trouble. These materials are comparatively brittle next to other roof materials. There’s a good chance you can damage the roof just walking around on top of your home, not to mention the rest of the work to install the panels, mounting racks, inverters, and wiring necessary for the system. Wooden shingles also represent a fire hazard, so you will have to do extra work to ensure that any solar system you mount on this type of roof remains safe!

Pitch and orientation:

Regardless of where you place your solar panels, the goal to ensure that the are in direct sunlight for as much of the day as possible. To that end, the orientation of your home relative to the sun and the pitch of your roof are both extremely important.

Depending on how your home faces the sun over the course of the day, there are optimal locations for roof-mounted solar panels. You will want to determine this before you start installing mounting racks and panels. Here in the northern hemisphere, you want your panels facing towards the south.

You also want to determine the angle of your installation point. In general, roof angles between 30 and 45 degrees, with a good orientation, will allow your solar panels the most time to collect sun and generate electricity. Some experts believe you want to avoid anything over 40 degrees, as steeper  angles reduce efficiency.

Where things get extra complicated is if your roof consists of extremely steep angles. To get the best efficiencies, you will need to install racks elevate the panels off the roof surface in order to get the correct angles for your panels, or you may have to consider alternative installation options, such as a ground-mounted solar power system.

Shading:

The orientation of your home may have your rooftop solar panels shaded throughout certain parts of the day. The cause for shade may be completely out of your control, such as tall neighborhood trees or taller buildings. One part of your roof may be forced into the shade before others, and depending on where you install your panels, it means that some panels will be working longer and more efficiently than others.

If your home is heavily shaded throughout peak production hours, unfortunately there’s just not a whole lot you can do. Rooftop panels may not be the best solution for you. But there may be other parts of your property that are not affected by shade and suitable for installing a solar system.

The size of your roof:

If your intent is to install a DIY system that is fit for the average energy use of a home today, you’re looking at a 5-kilowatt system, which is the average size of solar system in use today. To install solar panels that can generate this among of electricity, you will need about 300 square feet of space on your roof.

This isn’t set in stone because you can choose either monocrystalline, polycrystalline, or thin-film/photovoltaic solar panels for your DIY system. Each of these material types has different power generation efficiencies, which means that you might need more, or less, square footage of these panels per kilowatt. If your roof can’t accommodate all of the solar panels you need, you might need to supplement the roof panels you can install with ground-mounted solar panels.

Rooftop condition:

Unless you are a professional roofer and know what to look for, you should consider hiring a professional to inspect your rooftop. Nobody wants to discover serious problems with their roof after starting to install a solar system.

If serious problems are discovered with your roof, repairs must be made if you’re intent on a roof-mounted solar system.

My roof is perfect for solar! Now what?

Once you know that your roof is ready for a solar system, you’ll need to get the necessary equipment.

Asphalt shingle roofs allow for easier installation of standard penetrating mounts. But if you have a tile roof, you might have some extra work on your hands with removing and cutting tiles to accommodate the mounts and wiring. You should try to make sure you have all the tools you’re going to use to get the equipment on the roof.

You should also make sure that your DIY solar kit is complete, as sometimes these kits don’t actually include everything you need, such as wiring, inverters to convert direct current (DC) to alternating current (AC), and a storage battery (if desired).

But before you buy anything, draw up a plan of how large your system is going to be, and exactly what you are going to install. Then, you’ll have to submit applications to your city or counting building department, and a local utility company. If you don’t know how to draft a permit application, you’ll need to hire a contractor or other professional to do it for you.

Why buying used or old solar panels and equipment isn’t the best option

One way some DIY solar installers try to save money is by buying older equipment, including old solar panels, previously used inverters, and other refurbished solar equipment.

While this can save you money in the short term, it could affect the efficiency of your new system. For example, we’ve discussed in detail how solar panels degrade over time. Panels that have been in use for years have already experienced some wear and tear, and cheaper panels may have significantly reduced performance even after only a few years of use.

If used and refurbished equipment is where you’re going to try and save some money, make sure you can get a warranty. If you’re buying solar equipment secondhand, you might not have the same guarantee of performance and longevity of newer products.

If you’re going to connect your new DIY system to the grid, you’ll still need to call in a professional.

Even after you’ve installed everything you need for your DIY solar system, you will still need the help of a professional to get everything connected to your house. Unsurprisingly, a lot of DIY installers still end up calling electricians to wire the system to their home, and inspect everything to ensure that the system is safe for use.

If your home is connected to an electrical grid, you’re definitely going to have to call your local building department again. This is because utility providers will not allow a solar power system to be interconnected to grid and activated without having the electrical work signed off by the building department. Once the building department gives the okay, then your local utility will finalize the interconnection, and you can finally start enjoying the benefits of solar power.

There’s no denying that DIY solar can and does save people some money. But it can also cost you more money than it would to have a professional do the work if you make a mistake. In particular, failing to secure the proper permitting can be extremely costly, and may result in you having to hire a professional to redo your work.

On the other hand, by hiring a professional solar contractor for the installation, the work is warrantied, and your system will be properly optimized by a professional to ensure the best possible efficiency.

If you want to make sure you get the most out of solar power, there’s nothing that beats getting trained and experienced solar installers out to your property to get it done right, and quickly. If you’re interested in solar for your home, but aren’t sure what kind of system you need, contact Capital City Solar today!

As of January 1st, 2020, all new homes built in California are required to have solar panels installed during construction. But many prospective homeowners are buying homes with solar panels purchased or leased by the homeowner. These homes have increased value over comparable homes without solar power systems, so home buyers can expect to pay more for them.

But depending on how old the system is, you may need some maintenance to get the best possible performance. And if the previous homeowner financed the system with a lease, that can also affect the price of a home.

Homes with solar power systems already installed are a great value for home buyers. But there are some things you should know so you can better anticipate any additional costs, and enjoy the benefits of solar power that much sooner!

If a home’s solar system is on a lease, it can affect your month-to-month costs.

As we’ve discussed before, when homeowners purchase a solar power system, these systems do increase the value of a home, so you can expect to pay more up front compared to one in the same neighborhood without it. But the exact amount depends on whether the previous homeowner owned the system.

Solar power prices have come down in recent years, but in the past many people opted to lease systems, or financed them through solar loans. This can change what you pay for the home from month to month, so it’s important to determine how a solar power system was financed early into the homebuying process.

If the solar system is leased, or was financed through a Power Purchasing Agreement:

A solar system that was installed through a lease agreement or power purchasing agreement (PPA), that means that the current homeowner is making monthly payments on the system. But there are some key differences between a solar lease and a PPA.

A solar lease means that the system is essentially being ‘rented’ to the homeowner. From month to month they pay a fixed rate to a company which owns and maintains the system. These agreements last for 20 years on average, though some companies may offer longer or shorter agreements. It’s important to note that under a solar lease, the homeowner is not eligible for any tax breaks, rebates, or other financial incentives for solar power systems, because they don’t own it. The primary benefit comes from the lower energy rates that solar systems offer versus utilities.

If the solar system was installed as part of a PPA, the homeowner is still paying a monthly fee, but it’s not fixed. Rather than paying for the system itself, you are paying for the power it generates that you use, just as you would pay your utility company. The cost per-kilowatt hour is usually fixed, but your own personal power usage may change depending on the time of year, and current energy rates.

It should be noted that many solar loans and PPAs offer ways for you or the previous homeowners to pay off the remainder of the lease in order to make the system your own. Find out the terms of the lease or PPA early in the purchase process, so you can plan accordingly.

If the solar system was financed through a secured or unsecured loan:

Solar loans typically remain the liability of the homeowner who made the loan. They will either have to pay it off when they sell the home, or continue payments even after selling the home. As a result, you can expect to pay more for a home with a secured or unsecured solar loan, as you will actually own the system.

If the system was paid for with Property Assessed Clean Energy (PACE) financing:

While systems financed through secured or unsecured loans are the liability of the original homeowner, PACE financing is tied to the property itself. If you buy a home with a PACE-financed solar system, you may be obliged to take over the payments for the remainder of the agreement.

Unlike other solar loans or leases, PACE payments are made once a year through assessments added to property taxes. Because PACE financing is attached to the property, if a home is sold before the system is paid off in full, the loan may transfer to the new homeowner. However, situations can vary. You, your lender, or the PACE lender may require that the PACE loan be paid off before the home is sold.

When buying a home with solar panels installed, call in maintenance pros to inspect the system.

The components of a solar system are designed to survive outdoors for many years without requiring heavy upkeep. Most of the time, your biggest concern will be keeping the panels clean enough to maximize energy output. But depending on the age of the solar power system is, parts of it may need to be replaced, such as wiring, inverters, or even the solar panels themselves need some maintenance..

When you’re considering a home with a previously installed solar panel system, you should always find out just how old the system is, and what company manufactured the system, and who installed it.

We recommend calling a certified solar power contractor–like Capital City Solar—to inspect the system and verify that everything is working as it should. They’ll be able to tell you if the system needs maintenance. If you’re still in the middle of the purchasing process, you might be able to use what they report to negotiate a better price on the home, or work out an agreement on how to pay for any fixes.

Another thing to keep in mind is that sometimes, the solar power contractor that installed a system has since gone out of business. This can make it difficult or impossible to take advantage of workmanship warranties.

Buying a home with a pre-installed solar power system is a great way to start living green. If you perform your due diligence, you can enjoy the benefits of solar worry-free. And if you’re in the process of buying a home with solar already installed and want to make sure everything is in order, you can call Capital City Solar at (916) 782-333, or send us a message using our contact form.

Back in 2018, the California Building Standards Commission approved a mandate that changes Title 24 of the state’s building codes. The code change requires all new homes built in the state of California to have solar power systems installed on them. As of January 1^st, 2020, that requirement goes into effect.

Capital City Solar has created this article to answer some of the questions we commonly hear from Sacramento residents who are planning on having a home built. Whether you are commissioning a new home, or you're a builder or contractor, we can help you fulfill California's new solar power requirements. To learn more, contact us at (916) 782-3333, or fill out our contact form and we'll be in touch.

Does the January 2020 deadline apply to when a permit is filed, or when construction starts?

The deadline applies to the date on which a builder files a building permit. If the permit is filed prior to January 1^st of 2020, a solar power system is not required, even if building does not start until 2020.

Does the solar power requirement apply to housing developments? What about custom homes?

The requirement applies to all homes. Home builders have the option of directly installing panels on each home they build, or to build shared solar power systems that power a group of interconnected homes.

The requirement does not apply to multifamily units and other large developments standing more than 3 stories tall.

How do you pay for solar power systems on new homes?

A contractor can roll the cost of the system of a system into the price of a home (or arrange for a system to be leased month to month). Alternatively, if you have commissioned a custom home to be built for you, you can opt to pay for the system directly.

We have worked with both builders and homeowners to help them meet California’s solar power requirements.

How large does the solar power system have to be?

The California Public Utilities Commission (CPUC) originally considered requiring that new homes be net zero energy, meaning that 100% of a home’s energy needs be covered by solar power.

However, they instead opted for a compromise where solar power installations must be sufficient to make a home net zero electricity. This means that only a home’s electricity usage must be offset by the solar power installation. Thus, if your home uses natural gas for heating and/or cooking, this energy usage does not have to be accounted for by the solar power system.

The minimum required size (or rather, the minimum energy production) of a solar power system is based upon the size of the home. Typically, the absolute minimum requirement for smaller homes is an energy capacity of 2 to 3 kilowatts. But it should be noted that this is on the small side, and homeowners opting to install such a small system will result in more costly electricity bills.

Are new homes required to also have a home battery system?

Home battery systems are not required. However, qualifying home battery systems allow you to reduce the minimum size of the solar power system, if you so wish.

Will a solar power system increase the value of a home?

Recent studies have indicated that homes in California with solar power systems had an added resale value of $4,260 per kilowatt of power capacity. In the Sacramento region, solar-powered homes typically sold for 3% to 7% more than comparable homes without solar power systems.

Are you a having a custom home built for your family, or are you a contractor looking for a reliable solar power installer?

For more than 15 years, Capital City Solar has worked with residential and multifamily developers to design and install cutting-edge solar power solutions. Whether you’re a contractor, or you’ve commissioned a custom home here in the Sacramento area, we can help you meet California’s new Title 24 requirements, while also getting the best possible value in terms of both system quality and energy savings.

If you have questions, or you’re ready to learn more about how Capital City Solar can help you, give us a call or fill out our form today!

Recently, there has been a flurry of ads on Facebook and other social media sites touting offers for “free electricity.” Usually, these ads claim that PG&E, the local county, California, or the federal government will cover the cost of installing a solar power system. In other instances, a clickbait-style ad teases the potential for getting FREE or NO-COST solar panels, thanks to some extremely generous yet unnamed benefactor.

Unfortunately, without exception, these ads are either deceptive or outright lies.

First, let’s look at what solar power incentives are being offered by utilities and local/state/federal government.

Federal Government

The most significant, real incentive for purchasing a solar power system is the Solar Investment Tax Credit, or ITC. Available through 2021, you are credited up to 30% of the total cost of a solar power system for your home or business. However, it certainly doesn’t cover the full cost of a solar power system purchase and installation. In addition, the program is being phased out, with the benefit amount dropping in 2020, and ceasing entirely after 2021.

This is currently the only federal incentive for installing a solar power system.

State of California

Currently, the state of California does not offer any incentives for installing solar power. In fact, if you visit the State of California’s “Go Solar California” website, you’ll find that the page on “Tax Credits for Solar System Purchase” discusses the federal government’s ITC.

Low-income homeowners may qualify for the “Single-family Affordable Solar Homes Program” (SASH), a statewide program managed by the nonprofit organization GRID Alternatives. Capital City Solar has been a contractor partner of Grid Alternatives for more than 10 years. If you contact Capital City Solar about a solar power system and we believe you might qualify, we’ll happily refer you. If you wish to apply to Grid Alternatives on your own, fill out the application form here.

Sacramento County

Sacramento County does not offer incentives for installing a solar power system, though the county’s website does have a page discussing PACE, a program for financing the cost of solar power upgrades. But as we discussed previously in our post on solar power financing options, this is nothing more than a loan.

City of Sacramento

There are no incentives offered by the Sacramento city government.

PG&E

Pacific Gas & Electric does offer some clean energy incentives. However, they currently don’t offer rebates for installing a solar power system on your own home. As noted on California’s Go Solar California site, none of the state’s major utilities currently offer solar incentivization programs.

SMUD

SMUD currently offers a $300 solar incentive for residential installations.

If a solar power company is saying you can get solar power for free with no money down, they are probably talking about a financing or lease program.

There are a lot of creative financial solutions out there to help homeowners cover the not-insignificant cost of getting solar power. However, none of these options are free.

We won’t get into too much detail here—you can learn more in our blog post on solar power financing options—but “no money up front” options generally fall into one of the following categories:

• PACE: Several states, including California, have privately funded PACE programs that allow homeowners to finance the purchase of a solar power system. Repayment of the loan us usually rolled into property tax payments for a period of 20 years, with your home being used to secure the loan.
• Leasing: This is pretty much like leasing a car. A solar power company installs and owns the system. This means that you get the benefit of energy savings, but you never own the system, even when the lease expires (at the end of the lease period, the system is removed unless you agree to purchase it). In addition, the solar power company that owns it gets the solar tax credit, not you.
• PPA: Under a power purchase agreement (PPA), a solar power company installs and owns the system. Similar to how your utility company charges you for electricity, the solar company charges you for the electricity produced by the system. Again, you never own the system, and do not qualify for the solar ITC.

The fact of the matter is that there are very few solar power incentives on offer, and they are diminishing by the day. Such incentives used to be quite common 10 to 15 years ago, when solar power systems were much more expensive, and the adoption rate was quite low. But these days, utility companies are getting nervous about the large number of homeowners installing solar power systems.

In April 2019, SMUD angered Sacramento customers by proposing a monthly “grid access charge” on solar power users, costing about $500 to $600 per year. While the public outcry was enough to convince SMUD to withdraw the proposal, it was a pretty good indication of how public utilities currently feel about solar power.

The days of local governments, state governments, and utilities offering solar incentives are over. Don’t wait for someone to offer you a free solar power system. There’s no such thing. The federal solar tax credit is the best deal that you’re going to get, and if you want to take advantage of that, don’t wait. Act now.

In April 2019, online real estate website Zillow released a summary of an analysis of the selling prices of homes with solar power systems versus those with without. They found that homes in the United States with solar power systems sold for an average of 4.1% more than comparable solar-less homes. This translated to a premium of about $9,250 for middle of the road homes.

But Zillow was careful to note that the premium commanded by a home with solar could vary significantly depending on the market. Two examples they highlighted were New York City’s metro area, where homes with solar panels sold for 5.4% more (a median premium of $24,000), while homes in Riverside, California sold for only 2.7% more ($9,930).

The brief article noted two other California markets and their sales price increases:

• San Francisco: 5.4% increase - $41,650 more
• Los Angeles: 3.6% increase - $24,295

But this is also only a single study, and Zillow didn’t release a great deal of detailed information. Many factors may impact how much more homebuyers are willing to pay for a home with a solar power system. They include:

• The baseline market rate for homes in a given community
• The quality of the individual solar power systems
• How effective solar panels are in a given area
• How much the community values solar power.

How might a homebuyer value a solar power system when making an offer price on a home?

A Lawrence Berkeley National Laboratory analysis found that home price premiums for solar power are based on the energy production system, not a home’s base price. System age was also a consideration.

In 2015, Lawrence Berkey National Laboratory analyzed 43 pairs of homes sold in 6 states: California, Florida, Maryland, North Carolina, Oregon, and Pennsylvania. Each pair of homes was carefully matched so that they were highly comparable. The sole significant difference was that one home had a solar power system, and the other did not.

They found that the median average sale price increase for homes with a solar power system was 2.91%. California homes in the San Diego metro area they analyzed were selling for just a hair more on average—2.92%.

But the study noted some very important considerations that home sellers and buyers need to keep in mind. For one, the typical age of solar power systems can vary by reason. The homes in California had solar power systems as old as 11 years in service, with an average age of 4 years. Meanwhile, none of the systems they looked at in Florida were older than 4 years, while those in Pennsylvania were all less than 2 ½ years old. In some respects, solar panels are a depreciating asset, much like a car or a computer. They have a finite lifespan, and their efficiency degrades over time. A homeowner with a 15-year-old system shouldn’t expect the same price bump that a home with a 3-year-old system would get.

The study also pointed out that trying to anticipate the price premium for solar power based upon the value of a home was a flawed idea. After all, a $300,000 home might have a premium quality 6-kilowatt system, versus a lower-end 3-kilowatt system on a $600,000 home. Why would a homebuyer pay twice as much for the smaller system just because the home’s base price is twice as much?

Instead, Lawrence Berkeley stated:

“Price per watt is the appropriate metric for valuing [solar power] systems, not the premium as a percentage of the home sale price, which is an inconsistent metric that varies widely by the size of PV systems and the price range of homes.”

In their study they found that the average price premium for solar power homes in California was between $4,260 per kilowatt. For the rest of the United States, the average price bump was about $3,145 per kilowatt.

But what kind of premium can Sacramento homebuyers and sellers expect when a home has solar?

The Zillow and Lawrence Berkley studies looked at California homes, but unfortunately neither had any information about our local Sacramento housing market. But thankfully, economists at the National Bureau of Economic Research examined the Sacramento region in a 2011 paper titled, “Understanding the Solar Home Price Premium.” In it, they examined the more than 90,000 home sales that occurred in Sacramento County between January 2003 and November 2010, including the 620 homes which at the time had solar power systems.

Unlike Lawrence Berkeley, they did not have information on the energy production of the solar power systems. Instead, they simply compared sales prices of comparable homes, and found that on average homes in Sacramento County with solar power systems sold for 4% more than those without. However, they found some interesting trends as well:

• Solar-powered homes on streets with at least two homes next to each other with solar panels (which they termed “solar streets”) sold for only 3% more.
• Solar-powered homes not on solar streets sold for 7% more.
• Solar homes in San Diego neighborhoods with more college graduates and higher ownership of hybrid vehicles enjoyed a larger price bump than average.

But again, there are many factors to consider before trying to estimate how a solar power system “should” affect a home’s price. Buyers and sellers may have different perspectives on the value of a home’s solar power system. Sacramento appraiser Ryan Lundquist has noted some common issues that come up when appraising solar-powered homes in Sacramento, and how that valuation is affected by solar power systems:

• Recouping investment: Homeowners often want to get back what they paid for a solar power system, or some specific fraction of that. But the purchase price doesn’t determine current worth, especially with older systems that were often much more expensive than comparable systems today.
• Age: Older systems have typically experienced more wear and tear than newer systems, and would be expected to have a shorter lifespan and produce less energy savings than a newer system.
• Actual cost: If the original homeowner received a large rebate on a system, then the original sticker price is significantly different than what they actually paid. Which figure will a homebuyer consider?
• Time in home: Someone selling a home may tell a buyer that they’ll save $15,000 on their power bill over the next 10 years thanks to the solar power system (and so the buyer should pay some percentage of that figure). But what if the prospective buyer only plans to live in the house for 5 years?

An additional issue comes up when a home has a leased solar power system installed. The owner may believe that their leased solar power system is a feature, and should increase the price of their home. But the homeowner doesn’t actually own the system, and will be a financial commitment for whoever buys their home. In some cases, people selling their homes may have to consider paying off their lease in full in order to ensure that their home sale goes through.

While there are many things to consider when buying or selling a home with solar panels, there is a clear consensus among many experts: that when you own a solar power system, you don’t just enjoy energy savings. Your home is worth more too.

Update: On April 22, 2019, SMUD withdrew the Grid Access Charge proposal, which was the focus of this article. SMUD also withdrew their proposed Net Energy Metering (NEM) 2.0 rate schedule. SMUD has stated that they are committing to establishing a process where they can work with public stakeholders to find service solutions that best meet the needs of all involved. While the specific topic of this article is no longer relevant, we will leave it published, as there will almost certainly be other utilities in California and elsewhere in the United States that will make similar proposals in the future. Hopefully the discussion here will make it clear why solar-targeted rate structures of this type are so damaging to the growth of solar power, and the need to find alternative solutions.

In April 2019, SMUD rolled out a rate change proposal for its 630,000 residential and commercial customers. One aspect of the proposal impacts all customers:

• 4.75% per kWh rate increase in 2020
• 4.5% per kWh rate increase in 2021

While SMUD likes to tout having an average annual billing rate increase of 2.15% between 2013 and 2017, this proposal would significantly outstrip the combined average yearly rate increase of 1.48% SMUD lists for PG&E and the local utilities of Roseville, Modesto, and Turlock. By 2021, customers can expect to see their bills increase by a total of 9.5% over what they are paying in 2019. This means a homeowner currently paying an average of $200 per month will be paying $220 per month in 2021.

The proposal claims that SMUD’s average customer currently pays about $115 per month. They will experience a billing increase of $5.40 per month ($65/year), with a total increase of $10.80 per month ($130/year) the following year.

But more baffling are significantly greater proposed rate increases exclusive to residential and commercial customers with solar power systems.

SMUD’s proposal specifies a new “Grid Access Charge” to be applied to all customers installing new on-site solar power systems, based upon the power capacity of the system installed.

Upon initial implementation—scheduled for somewhere between January 1^st and May 31^st of 2020—residential customers would be charged $8 per kW of power capacity. For our customers, on average this would work out to a billing increase of about $40 per month, or $480 per year. But the fee will also increase over time, reaching $11 per kW by 2025.

Rate increases would also be applied to commercial and agricultural customers, with the 2020 rate increase varying between $4 and $8 per kW. This range would increase to $6.50 to $11 by 2025. Vote Solar, a nonprofit solar customer advocacy group, anticipates that SMUD’s commercial customers will be hit especially hard. In a statement issued by the organization, the Central Valley’s many agricultural businesses face estimated billing increases of $4,000 per month, or $48,000 per year.

Current solar customers would be exempted from the Grid Access Charge for a period of 10 to 20 years, depending on when they were connected to the SMUD energy grid.

The proposal put forth by SMUD specifies that solar customers who were connected to the SMUD grid won’t be affected by the Grid Access Charge until 20 years after the first billing period subsequent to the installation of their system. This means that if you had your solar power system installed in 2015 and your first bill after activation covered June 1st through 30th, you would be subject to the Grid Access Charge as of July 1^st, 2035.

For customers whose systems were connected in 2018, or who submitted connection applications to SMUD prior to July 1^st, 2019, the charge won’t apply until 10 years after the first billing period. This means if your first post-solar bill from SMUD covered June 1st through 30^th of 2018, your rate increases start July 1^st, 2028.

However, there are exemptions to this. If you move to a new home with solar panels installed during the exempt period, the exemption will not apply to you. In other words, the exemption only applies to a specific customer at a specific address. The grandfather clause is nullified if a person changes address, or a solar-equipped home is sold.

SMUD customers can make their feelings known by speaking at a series of workshops and hearings hosted by SMUD’s Board of Directors.

For obvious reasons, many consumer and solar advocacy organizations, as well as Capital City Solar and our loyal customers, view SMUD’s proposal as a targeted attack on the Sacramento region’s many solar power users. This is especially the case given that in September 2018, Governor Jerry Brown signed Senate Bill 100, a piece of legislation mandating that:

• 50% of California’s electricity be sourced from renewable sources by 2025
• 60% by 2030
• 100% by 2045

This is an extremely aggressive but achievable (and necessary) goal for the most populous and forward-looking state in the country. But it can only be achieved if California homeowners and businesses can afford to reduce reliance on existing energy infrastructure by purchasing and installing solar power equipment.

In addition to the hardship SMUD’s proposals impose on Sacramento homeowners, can the state’s 3.8 million small businesses be expected to shoulder energy cost increases of hundreds or thousands of dollars per month if utilities statewide adopt similar measures?

The Board of Directors of SMUD is currently scheduled to vote on the proposed rate changes on June 20^th, 2019. Prior to the vote, there are two public workshops and a public hearing scheduled, as follows:

• April 23 at 10 AM: Public workshop #1
• May 9 at 6 PM: Public workshop #2
• June 4 at 6 PM: Public hearing

Capital City Solar will certainly be reaching out to SMUD to express our concerns. We hope to see existing and future customers make their voices heard in the months and years ahead, to ensure that our local energy infrastructure and policies are shaped by the needs of everyone, and not just energy utilities seeking to profit from them.