Congressman Dave Loebsack talks solar and economic growth with Troy Van Beek and Mayor Ed Malloy.

Let’s talk about jobs

Congressman Dave Loebsack visited Ideal Energy’s office on Friday, February 23rd. The Congressman sat down with Troy Van Beek, founder of Ideal Energy; Amy Van Beek, director of marketing; and Mayor Ed Malloy. The group discussed emerging technologies, legislative challenges, job creation, and Ideal Energy’s history.

Congressman Loebsack, a proponent of solar energy, said, “We’re creating an environment for businesses and folks who want to come in [to Iowa] from the outside.” He extolled the benefits solar brings to Iowa, including attracting out-of-state investment, bringing new residents to the state, and allowing businesses to reinvest solar savings into their employees.

“I’m happy that we can improve the environment,” he said, “but the first thing I talk about is jobs.”

Troy Van Beek expressed that as solar has taken hold, Ideal Energy has been able to add new hires each year, and the company now runs its own in-house electrical apprenticeship program which currently has three journeyman electricians in training under the supervision of Ideal Energy’s NABCEP Certified Master Electrician. “It’s important to us to be able to create jobs in rural Iowa,” Troy explained. “We’re training a quality workforce that will have well-paid jobs and grow the integrity of Iowa’s solar industry.”

Solar Plus Storage

Congressman Loebsack also inquired about new developments in the solar industry, particularly battery energy storage systems. Ideal Energy is at the forefront of energy storage in the Midwest and installed the first commercial-scale solar and storage system in the state at Stuff Etc’s Coralville location.

Solar and storage systems, like the one installed at Stuff Etc, allow businesses to substantially reduce their utility bills with ‘peak shaving,’ a technique for ensuring electricity demand doesn’t exceed a threshold that would trigger expensive demand charges. Batteries charge when solar panels produce surplus energy and automatically discharge when electricity demand is at its highest.

Congressman Loebsack asked about the impact of legislation, including the recent solar cell and module tariff, state and federal tax incentives, and the future of the Clean Power Plan. Although some legislation favorable to solar companies and their customers is in danger of being rolled back, Congressman Loebsack assured the group that “some of us fight very hard for these things.”

From Left to Right: Mayor Ed Malloy, Fairfield, Iowa; Eric Johnson, Writer, Ideal Energy; Corbin Shy, Electrician, Ideal Energy; Troy Van Beek, Founder & CEO, Ideal Energy; Amy Van Beek, Co Founder & CMO, Ideal Energy; Congressman Dave Loebsack; U.S. Representative for Iowa’s 2nd congressional district.

By: Deniz Comez, Lead Designer, Ideal Energy

In March we published Changes Coming to Solar Net Metering: Inside the Technical Calculations to walk our readers through the math behind our assessment of the impact of the new net metering rules in Iowa. Since that post was published there have been some updates, as the new tariff has come into effect.

Overview

Although the Iowa Utilities Board (IUB) refused to reconsider its ruling, it did compel Alliant Energy to modify some aspects of the new net metering rules. These changes have lessened the severity of the reduction to net metering. This means solar is still viable for most customers.

Although we’re disappointed that Alliant Energy and the IUB have enacted new rules unfriendly to businesses and homeowners pursuing solar, we’re relieved that the impact won’t be as severe as it could have been.

But before we dive into the specifics, let’s get caught up on the background.

Background & Timeline

In July 2016, the Iowa Utilities Board instructed Iowa’s utilities to submit new net metering rules for consideration as part of a pilot project meant to expand solar power distributed generation in the state. In February 2017, the IUB accepted Alliant Energy’s proposal. Alliant’s proposed rules limit the size of new solar installations by introducing a load cap to net metering.

Calculations based on Alliant’s publicly filed data showed that the new rules reduced the viable size of solar installations by 62% for Residential customers and 68% for General Service customers compared to what would have been installed under the old net metering rules. For an in-depth discussion of the impacts of Alliant’s proposal see our previous post here.

Leaders in the solar industry, environmental organizations, and concerned citizens roundly criticized Alliant’s proposal. Although the IUB did not reconsider its ruling, these efforts were not all in vain. In March the IUB issued a ruling that required Alliant Energy to provide additional information and to make several changes to its proposal.

Alliant made those changes and the new, final rules went into effect on May 1st.

What changed under the revised rules?

The IUB ordered Alliant Energy to provide additional information about the class load data that the net metering load caps are based on. Furthermore, under direction from the IUB, Alliant now defines it’s load caps in terms of alternating current (AC) instead of direct current (DC), which we view as a positive change.

Class load data includes total kWh usage and non-coincident kW demand for all Alliant customers in a particular class, for example the “Residential” class or the “General Service” (commercial) class. This is important for calculating the net metering load cap, because although Alliant would prefer to use an individual customer’s actual kW demand, most customer’s electricity meters don’t measure demand. Instead, Alliant plans to infer a customer’s kW demand from the class load data.

Calculations using Alliant’s newly released class load data show that the net metering load caps won’t be as extreme as the older data had indicated.

We now calculate that net metering will be reduced by 17% for Residential customers and 34% for General Service (commercial) customers. For both cases, the Residential and General Service customers, assume the industry-standard solar generation rate of 1200 kWh for every kW DC of solar installed and the solar installation would have a 1.15 DC to AC ratio.

Although this is not the catastrophe that a 62-68% reduction would have been, we are nevertheless frustrated and disappointed that the IUB and Alliant Energy turned a pilot project meant to promote solar power into a new set of rules that will instead limit solar power. Let’s take a closer look at the math behind these net metering reductions.

Residential net metering reduction calculations

NEW SOLAR NET METERING TARIFF

Under the new tariff, 7.234kW AC of the same 10 kW installation is eligible for net metering with Alliant Energy, saves $1,353 in the first year, and takes 10-11 years to pay for itself. The design lifecycle of solar is 25 years.

A Residential customer that uses 12,000kWh in a year would need approximately 8.696kW AC to be net metered under the old rules to have 100% of their energy usage net-metered. This is calculated like so:

Given that the Load Factor for Residential customers Load Factor is now 18.937%, under the new rules, the client can have the Load Cap of:

General service net metering reduction calculations

A General Service customer that uses 120,000kWh in a year would need approximately 86.957kW AC to be net metered under the old rules to have 100% of their energy usage net-metered. This is calculated like so:

Given that the Load Factor for General Service customers Load Factor is now 23.855%, under the new rules, the client can have the Load Cap of:

NEW SOLAR NET METERING TARIFF

Under the new rules, 57.425 kW AC of the same 86.6kW AC installation is eligible for net metering, saves the business $13,105 in the first year and takes 5-6 years to pay for itself. The design lifecycle of solar is 25 years.

Final thoughts on the new ruling

• These new metering rules don’t spell the end of solar power in Iowa. While the rules represent a step backward, solar nevertheless continues to be a prosperous opportunity for many Alliant customers.
• If you are an Alliant Energy customer and already have solar, no worries, you’re grandfathered in under the old tariff through your interconnection agreement.
• The outlook is especially good for customers of MidAmerican Energy, another large public utility in Iowa. MidAmerican has implemented new rules that support and encourage solar power. We think they’re moving in the right direction.
• If you’d like to know more about how these net metering changes affect your plans to pursue solar, don’t hesitate to get in touch.

Solar is an American success story. Last year, it was the number one source of new electricity capacity for America and created 51,000 jobs and $23 billion in investment. The solar industry employs over 260,000 Americans, which is more than Google, Facebook, and Apple combined. Solar is powering homes and businesses, farms and factories, and even entire towns. All with a clean and abundant domestic power source.

My company, Ideal Energy, is part of this success story. We employ 30 people in Fairfield, Iowa, and have installed solar for hundreds of customers over the last 8 years, for homeowners, small businesses, farms, educational institutions and large industrial operations. We’ve hired hard working Americans from all walks of life who are making a serious commitment to our community.

However, the success of the solar industry is under threat. Two failing solar cell and panel manufacturers are hanging their hopes on Section 201, last used in 2002 to create a temporary tariff on imported steel.

Suniva, a bankrupt Chinese-controlled company, and SolarWorld, whose German parent company has declared insolvency, are failing for reasons unrelated to imports. The Solar Energy Industry Association (SEIA) found that these companies’ troubles were caused by self-inflicted wounds and that Suniva and SolarWorld’s “poor quality, poor customer service, and deceptive business practices resulted in burned bridges with a multitude of customers, including some of the largest in the industry.”

Tariffs on solar panels may not help these companies at all, and they certainly won’t help them without severely damaging the rest of the American solar industry. Many of those damaged would be other American manufacturers.

If these two companies prevail, 88,000 well-paid Americans could be jobless next year with no guarantee of Suniva or SolarWorld adding any jobs, according to SEIA. History reinforces this point—researchers at the CITAC Foundation found that the 2002 steel tariffs actually caused job losses for over 200,000 American steel and manufacturing workers.

The harm will go beyond jobs. Bloomberg New Energy Finance says the tariffs, if imposed as Suniva has asked, would double the cost of solar panels. This would crush demand for solar. IHS Markit says the case could slash photovoltaic demand by 60 percent by 2021. GTM Research says it could lead to the abandonment of 47 gigawatts of future solar projects—that’s more than the total amount of solar installed in the United States to date and enough electricity to power 10 million homes.

The proposed tariffs would hurt homeowners and businesses by denying them the opportunity to save money by investing in solar.

This is particularly disconcerting to me because Iowa could lose out on the benefits of solar. Some of our customers are saving over $100,000 per year in utility costs – savings they’ve reinvested in additional training and benefits for their employees, buying new equipment, and hiring more workers. Solar has positive knock-on effects throughout the local economy, leading to economic growth and new jobs.

We want to see the American solar industry continue to thrive, which is why we are against these tariffs. The American solar industry needs U.S. manufacturing and local companies, as well as the ability to tap into the global supply chain.

There is a right and wrong way to spur growth in U.S. solar manufacturing—killing jobs in a growing industry is the wrong way. I urge the ITC to decide against this so-called “remedy” and instead support the best interests of American businesses and the quarter-million American solar workers and their families.

This article originally appeared in The Gazette on September 19th, 2017.