PV buydown policy request [RE-wrenches]

[Matt Tritt]

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Hay Bob,

I (as you can tell) agree. I also believe that there is another element
to all this that seldom gets discussed in public, and that's the effect
of exaggerated claims made by certain manufacturers, and a lot of
el-Cheapo on-line hit-below-the-belt wholesale to the public
"distributors". Many claims of systems that will "eliminate" power bills
create unrealistic expectations on the part of many consumers, who make
purchases solely on the assumption that they will experience "free"
energy. Spare me.

I know of one wind system installed locally that's a classic case.
Claims were made by BXXXXX that, according to the owner, their "10" kW
system would produce $4,000. to $6,000. off-set a year in our wind
regime of 10 to 11 MPH yearly average. Those of you in the wind end of
things will immediately know what a joke this is. The turbine in
question doesn't even begin generating noticeable power until over 9
MPH. Do the math! They received a $600.00 reduction on their $9,000.
yearly electric bill as a result of the wind production from a system
that cost the owner $60,000.0 Yikes! A 100 year payback hardly seems
worth the effort. ;-)

This is the sort of thing that cries for production-based incentives!
The manufacturer, who happens to enjoy high name recognition and wields
heavy influence in the arena of small windpower, claims in writing that
an 11 MPH site is adequate to yield enough energy from their equipment
to be financially viable. Un-said is what the windspeed distribution has
to be. A 10.5 MPH site that blows 10.5 ALL the time with very few high
winds is possible. Wow. This is like a 10 k PV system installed under
shade cloth; it costs the same to put in but will never produce enough
to pay for itself in a normal life cycle. 

I was asked to install one of these same turbines at a site that just
plain sucked. It maybe had an 8 average, so I suggested that they return
it to the manufacturer (the same one involved the case above, by the
way) for a refund, or that we could try and locate a buyer for it. I
suggested that a 10 k PV system would produce plenty of energy to take
care of their needs and proposed such a system. The manufacturer had
sold them the turbine and tower after having "looked at a windmap" of
the area. They wouldn't take it back! This whole thing turned into a big
mess with the neighbors, the county and lawyers - not because of not
enough wind, but because of the intransigence of the manu. And the ego
of the buyer! The buyer hired some newbie solar outfit to install the
machine after they told him that he had "plenty" of wind at his site
from one site visit on a 15 MPH day. More reasons for production
incentives!

There should be some mechanism that provides interest-free financing,
providing that the system produces within a given set of parameters; if
not, then the owner should be charged the going interest rate or be
given the opportunity to rectify the problem through recourse from their
installer, the retailer and, eventually, the manufacturer. This would
encourage responsible design and installation throughout the industry
and provide more energy to the grid per dollar of investment. Or maybe
not! :-)

Matt T



-----Original Message-----
From: Bob Maynard, Energy Outfitters [mailto:bob at energyoutfitters.com] 
Sent: Wednesday, April 28, 2004 10:26 AM
To: RE-wrenches at topica.com
Subject: RE: PV buydown policy request [RE-wrenches]


 

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Hi Matt,

I believe the only way production credits will work well is with a solid
no or low interest loan program.  With those 2 elements, the industry
overall would slow down some and I believe become more stable and
sustainable.  Currently we ride a boom/bust cycle with up front rebates
as funding becomes available or runs out.

Ideally the production credit should be enough to pay 50-70% of the
annual loan payment with the customer picking up the balance.  I believe
this would be quite palatable to many potential customers.

Regards,
Bob Maynard
Energy Outfitters


Matt wrote:
I'm going to be the devil's advocate in this issue.

Even though it's obvious that performance-based incentives are the only
really fair way of rewarding good system design and performance, how do
you attract a purchaser when their rewards are spread over a (very) long
period of time? With front-loaded incentives the initial costs are at
least toned down to a more palatable level for those who must borrow $
to buy the system. 

The only way it could work to the purchaser's advantage is if they had
interest-free or extremely cheap loans. As it is, a 10 year break even
point is pretty common, and I doubt that a country with private power
suppliers will be inclined to force the utilities to pay at a higher
level than their avoided cost to non-firm power suppliers just to help
private micro generators compete with them.

What about a hybrid system of up-front incentives with added
performance-based premiums of actual money at the usual retail price for
production that exceeds the consumer's consumption? Wouldn't that
promote bigger systems and greater energy efficiency all the way around?

Just my $00.02 worth

Matt T
Allan,

I agree with Bob Maynard.

Performance based PV incentives will prove more beneficial, in the
long-term, than capacity based incentives.   PV incentives paid in
proportion to the energy produced will ensure that designers and
installers are more attentive to performance and will also mitigate
political concerns regarding funding of poorly designed and/or poorly
functioning systems.   Capacity based incentives served the purpose of
incentivizing PV in California as an emerging technology with undefined
performance and reliability.  Seems to me we have passed this emergent
stage and PV is now a reliable and relatively mature technology.   The
problem remains that PV power is still more expensive than central
station burning of carbon based fuels, and as such, incentives are still
needed to attract investors and customers.  Performance based incentives
will place the burden of risk with the end consumer, honest
knowledgeable installers will be required and utility-grade performance
meters will be necessary for accurate accounting and fraud prevention.
Consumers will need uncomplicated forthright facts regarding siting
issues, shading and overall system and component inefficiencies.  

I also believe incentives need to be structured to provide benefits for
traditional utilities as well.  Perhaps REC's can be aggregated to
contribute towards State RPS requirements in an effort to keep utilities
un-hostile towards greater use of DG within their grids.

Graham Owen
GO Solar

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