News

Despite cool reception, solar program to stay

City Council opts to keep Palo Alto CLEAN in place

Palo Alto's newest solar-energy program has plenty of fans but, so far, not a single user.

Dubbed Palo Alto CLEAN (Clean Local Energy Accessible Now), the program allows customers with solar panels to sell energy to the city's Utilities Department for a fixed, long-term rate. The program made its debut in 2012 and has amassed a small legion of dedicated supporters in the environmental community, some of whom are hoping to take advantage of the program in the near future. Yet after three straight years of failing to attract any participants, the nascent program was on the verge of flickering out on Wednesday night.

Instead, the council chose to let the program buzz along with some small tweaks. After a long debate, the council rejected a unanimous recommendation from its Finance Committee to drastically reduce the city's subsidy for Palo Alto CLEAN. The committee, which includes Vice Mayor Greg Schmid, Councilwoman Liz Kniss and Councilmen Eric Filseth and Greg Scharff, suggested reducing the amount that the city would offer for locally generated solar energy from 16.5 cents per kilowatt hour to 10.3 cents. This would effectively make the city's rate for locally generated energy equal to what's known as the "avoided cost" -- the cost of buying solar energy from distant providers and transmitting it to Palo Alto.

According to Utilities Department staff and to the program's advocates, the change would effectively kill the program by making what is already a tough sell even tougher. The city's Utilities Advisory Commission had also recommended keeping the existing rate in place.

"At this point, we've had the program in place for a number of years and we've never had anyone take us up on it, even at 16.5 cents," Jane Ratchye, assistant director of the Utilities Department, told the council on Wednesday night. "I think it's kind of clear that it's fairly unlikely that anyone will take us up on the program if the price dropped to the avoided cost of 10 cents."

In advocating for the change, Scharff and Filseth both argued that with solar prices from large-scale providers in rapid decline, it would be fiscally irresponsible to offer such a high rate to local generators. Scharff called the program "largely symbolic," while Filseth protested that the city is spending public funds on "something incredibly ephemeral." Both stressed that it would do nothing to reduce greenhouse-gas emissions.

"I think it's an irresponsible thing to do and I won't support it," Filseth said.

But supporters of the program characterized the Finance Committee's recommendation as nothing short of "betrayal." That's the term local environmentalist Walt Hays used to describe the proposed changes to Palo Alto CLEAN. He noted that several local groups have been preparing proposals for the solar program under the assumption that the city's terms would remain constant.

"It's a total betrayal of the people who spend money and make good-faith efforts on the (16.5 cent) price," Hays said. "It would destroy any confidence in the city. ... No one would ever apply, not knowing what the City Council will do next."

Though the city has yet to receive an application, there are at least two promising proposals currently in the works. The city is negotiating with the company Pristine Sun for installation of solar panels on city garages. At the same time, the Unitarian Universalist Church of Palo Alto has been putting together a proposal to participate in Palo Alto CLEAN.

Craig Lewis, founder of the local nonprofit Clean Coalition, argued that it's important to preserve the program in its current form to provide certainty to the "many parties currently pursuing Palo Alto CLEAN projects." His group is involved in both of the aforementioned projects and he noted in a letter to the council that he has already incurred about $250,000 in costs for staging these projects.

Troy Helming, CEO of Pristine Sun, addressed the council and said that if the rate change were adopted, his company would "have to exercise the right to walk away." And Bruce Hodge, founder of the group Carbon Free Palo Alto, said resetting the terms of the program "is not only unfair to parties that have initiated projects, but will also be perceived as a clear signal to avoid this program in the future."

The council majority ultimately agreed and voted 6-2, with Scharff and Filseth dissenting and Kniss absent, to keep Palo Alto CLEAN in place with the existing rate.

"If we're having a carbon-neutral electric supply and striving toward a carbon-free city and a sustainability model, there is a real value of a physical presence of renewables within our community," said Councilman Pat Burt, the leading proponent of keeping the 16.5-cent rate in place.

The council also agreed to use the $154,000 that the city will be receiving in annual lease payments for the parking-garage program to support Palo Alto CLEAN, thus reducing the program's impacts on electric customers.

Though the prices will remain as is for now, council members agreed that the rate needs to be gradually reduced in the coming years, after the first few projects get adopted. Utilities staff will return at a later date with proposals for future rate changes.

Councilman Tom DuBois noted that Palo Alto CLEAN is still in its pilot stage and made a case for keeping the rates steady for now.

"I see value in getting experience in running solar in the city," DuBois said. "I see value in diversifying resources. I don't see the value in killing the program."

Comments

7 people like this
Posted by Pragmatist
a resident of Another Palo Alto neighborhood
on May 28, 2015 at 7:36 am

Sounds like they should shut the program down and revisit it in five years. Not ready for primetime.

It appears they jumped the gun and initiated this program before the time was right, thus uselessly squandering taxpayer money.

Pity.


11 people like this
Posted by Palo Alto resident
a resident of Crescent Park
on May 28, 2015 at 8:30 am

If they wanted this program to succeed, why isn't there Any info about it on the utilities website? I didn't know it even existed.


5 people like this
Posted by Anonymous
a resident of Another Palo Alto neighborhood
on May 28, 2015 at 9:19 am

Palo Alto should offer time-of-day pricing to all its customers and also the CLEAN program. During peak demand, when solar PV is most efficient, rates are over $0.36 per kilowatt-hour. If power were priced based on marginal time-of-day rates, Palo Alto would have a much higher usage of solar PV.


3 people like this
Posted by My Nguyen
digital editor of Palo Alto Online
on May 28, 2015 at 9:40 am

My Nguyen is a registered user.

@Palo Alto resident You can find information on Palo Alto CLEAN here: Web Link


3 people like this
Posted by Craig Laughton
a resident of College Terrace
on May 28, 2015 at 9:58 am

This is yet one more case of PACC exhibiting global warming alarmism. More importantly, it is a chance for our council and various local greenies to thump their chests and say, "We are the leaders!".

Nothing wrong with solar, but lower installed costs will eventually allow it to compete with coal/natural gas-produced electrical power. At that point, we will see solar panels (or solar roofing materials) popping up on many roofs around town.

We can't seem to afford a new police station, but there is plenty of money to spend on boutique projects like this one.


6 people like this
Posted by Lindsay Joye
a resident of Another Palo Alto neighborhood
on May 28, 2015 at 11:56 am

The Palo Alto CLEAN program is best suited for commercial property owners as the incentive is paid for solar PV systems that are connected on the utility-side of the electric meter and don't reduce the customer's electric bill charges as rates increase in the future.

Palo Alto residents are encouraged to get a free proposal from the two Peninsula SunShares group-buy solar program contractors who were selected by a group of representatives from 12 cities in San Mateo County along with the City of Palo Alto.

The Peninsula SunShares solar installation prices are an average of 15% to 20% below historical for the Bay Area. The program ends this summer so act now to take advantage of the low solar prices as well as the 30% Federal solar tax credit before it ends in December 2016!

City of Palo Alto Solar Program information: www.cityofpaloalto.org/solar
Peninsula SunShares program website: www.mygroupenergy.com/peninsula


10 people like this
Posted by Conflict?
a resident of Community Center
on May 28, 2015 at 1:10 pm

Since Pat Burt is on the Board of Clean Coalition he should not have voted on this city measure.


1 person likes this
Posted by old but wise
a resident of Palo Verde
on May 28, 2015 at 2:01 pm

too bad the city did not continue its rebates to residents that install solar, I missed out, because the money they first gave out ran out. and now they have a new program that I cannot benefit from, because I chose another company to buy my solar set up from.


3 people like this
Posted by Steve Ludington
a resident of Palo Verde
on May 28, 2015 at 2:08 pm

What am I missing? How can this program be costing the city money if no one has applied for it?


1 person likes this
Posted by Steve Ludington
a resident of Palo Verde
on May 28, 2015 at 2:12 pm

Regarding SunShares, I just applied and got a phone call from one of the 'chosen' providers. They will not deal with me because I already have 3 kW installed rooftop PV (since 2003) and want to augment it. They will only augment one of their own installations. Haven't yet heard from the second one. So for us, it's a false incentive.


3 people like this
Posted by Subsidize
a resident of Midtown
on May 28, 2015 at 2:14 pm

Several countries in Europe and Asia give large government subsidies to businesses and homeowners so they can AFFORD to install solar panels. Often a new roof must be installed first, coupled with the fact that without subsidies, solar power will take 25 years to pay for itself-- this makes solar power out of reach forest people.


2 people like this
Posted by Douglas Moran
a resident of Barron Park
on May 28, 2015 at 6:01 pm

Douglas Moran is a registered user.

> "The council also agreed to use the $154,000 that the city will be receiving in annual lease payments for the parking-garage program to support Palo Alto CLEAN, thus reducing the program's impacts on electric customers."

Some of the money that the electric customers pay is transferred to the City's General Fund. From what I can tell, these lease payments go into the General Fund as well (otherwise there would be problems reallocating them in this manner). So if one were to believe that money is fungible -- as we were all taught in basic economics -- this is simply bookkeeping sleight-of-hand that does nothing to reduce "impacts on the electric customers"?


10 people like this
Posted by Conflict of Interest
a resident of another community
on May 28, 2015 at 9:53 pm

Question: How much does Pat Burt get paid to be on the Board of Advisors of the Clean Coalition? Whatever it is, he certainly earned it last night by rescuing the Palo Alto CLEAN program. I agree with @Conflict -- it was horribly unethical of him to vote on this issue, and to not even acknowledge his very clear conflict to his colleagues and the community.

Web Link


5 people like this
Posted by Conflict?
a resident of Community Center
on May 29, 2015 at 2:39 pm

Whether or not he gets paid, it is a conflict of loyalties. I suppose if he does not bring it up to the City Attorney she does not know about it.
I wish someone would clarify this matter.


Sorry, but further commenting on this topic has been closed.

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