Bradley Zeve, perched on a hydraulic lift wobbling 20 feet off the ground, leans forward and looks out across the roof of our office. “Oh baby, you’re so hot,” he shouts. Then he turns and grins at me and three other Weekly staffers who are trapped with him on the elevated platform. Puns are a part of our business, but I can’t suppress a groan. “I could go on,” he says, still grinning, then turns back toward the roof. “You turn me on!”
I have to forgive him. Zeve, the Weekly’s owner and CEO, is in that shocked-euphoric state people feel when they find out they’re pregnant, buy a house, or take any other leap that commits them wholly to something big for a long time. He has just invested in a quarter-million-dollar array of photovoltaic cells now lining the building’s flat tar-and-gravel roof. The way he sees it, he’s financially married to them for the next 13 years. Hence the bad puns.
It’s Monday, April 23, and the brand-new solar panels have just been wired to the inverters. A few hours later they’re feeding energy to the grid, and the office’s electric meters start spinning backwards.
Zeve makes the announcement over the intercom, and the staff whoops. Everyone in the building is excited about this 33-kilowatt, zero-emission system, which will keep about 14 tons of globe-warming carbon dioxide out of the atmosphere every year.
The Weekly has gone solar.
OK, so it’s pretty weird for a reporter to write a news story about her boss’s boss’s boss’s boss. In any other profile I might inject some skepticism about the source’s motives or strategies, but this is the guy who signs my paycheck. So don’t expect any wry observations alluding to an inflated ego or unwieldy nasal sprouts (not that either applies here).
Zeve’s a really cool, smart guy with great hair and impeccably-trimmed nostril hair. He is also committed to making this business as eco-friendly as possible.
For as long as he’s been hearing about it Zeve has dug solar technology for environmental and political reasons. But he held off his plans to install a photovoltaic system in the office, sensing that improved technology and better financial tools to make it practical were just around the corner. It wasn’t the right time, he reasoned. That changed last June, when the Weekly screened Al Gore’s An Inconvenient Truth with a panel of experts on hand for discussion. One audience member asked George Somero, director of the Hopkins Marine Station, and PJ Simmons, program director of Sea Studios, what Al Gore got wrong, and they both said, “Nothing.”
Zeve says he went home that night and decided to go for it. “I said, ‘If not now, when? And if not me, who?’”
Within two weeks he had applied for a rebate under the California Solar Initiative, a state incentive program intended to drive consumers toward photovoltaics. He just barely made the application deadline for the 2006 refund, which shrunk by about 10 percent for 2007.
The state approved a $79,000 rebate on the Weekly’s proposed 33-kilowatt system. And then Zeve wavered. He consulted his accountant; he worked to stretch his head around a complex plan involving five- and six-figure tax deductions, credits, bills and leases. He got bids from local companies to do the project for around $300,000 and decided: fahgettaboutit.
Then he met Nickalus Johnson of the Marina-based clean energy company Blueline Power. Blueline put in a bid to outfit the Weekly with photovoltaics for $256,000. Now the numbers almost added up. But they were still sketchy.
Zeve isn’t the type to throw a quarter-million dollars at any innovation, no matter how cool, unless he’s darn sure it’ll make business sense. By his calculations, an investment in solar panels could pay off, but there were several significant financial complications to consider.
After the net state rebate, the system would cost just under $200,000. In theory, a federal business energy tax credit could return another $50,000 or so, making the first-year cost approximately $150,000.
Over the next six years, the Weekly could claim about $53,000 in depreciation deductions. Zeve calculated that he could also save about $55,000 on electricity bills—assuming PG&E rates will increase by an average of 5 percent per year. (Of course, nobody can say for certain what will happen with energy costs—but PG&E rate increases over the past 30 years average out to 6.4 percent a year.)
Things were starting to look good, until Zeve and his financial advisors uncovered a serious obstacle. Although the Weekly would qualify for the $50,000 federal tax credit, the company would not be able to apply the credit because of its tax position.
Ultimately, Zeve determined that buying the equipment outright would require a big cash outlay; it would take between 12 and 15 years to pay it off.
“This is the part where I said, as I had several times over the past year, ‘Forget this,’ ” Zeve recalls.
However, the deal was not dead.
Zeve learned of a plan that has become common in the solar industry. Someone else—a company that was in a position to take advantage of all the tax incentives and rebates—could buy the system. The Weekly could lease it with a built-in agreement to buy it in six to 10 years. The paper would make monthly payments that more or less mirror what the company would have spent on electric bills. The seller would get the state rebate, the federal tax credit and the depreciation deduction, making about $50,000 on the deal.
Under this scenario, the system would pay for itself by 2020 or ‘21. The panels are warranted for 25 years, so once they’re paid off, the Weekly’s electricity would be close to free—the real green return.
There are a few gambles involved. If the building uses more electricity than the photovoltaics generate, PG&E will bill the Weekly annually for the difference. If it’s the other way around, PG&E won’t pay the Weekly; the surplus energy will just supply someone else on the grid.
Ultimately, the return on the Weekly’s investment hinges on what happens to the PG&E rates. If they continue to inflate at an average of 6.4 percent per year, the payoff will come in 12 years. If they increase at a more modest 5 percent per year—the average, excluding the rate spike caused by the 2000-2001 electricity scam—it’ll take 15 years.
In purely financial terms, this wasn’t exactly the best way he could have spent the company’s money—but that, he reminded himself, wasn’t the point. A solar roof would generate clean power, reduce greenhouse gasses, and make a statement that the Weekly practices what it prints. It’s the right thing to do, Zeve thought repeatedly. But still…the numbers were daunting.
And the clock was ticking. If Zeve’s system wasn’t up and running by April 27, his rebate would evaporate, and he’d have to apply again for a reduced refund, which threw off his economic justification for the project. He called Nico Johnson at Blueline and asked if his company could do in three weeks what would normally take four months. Johnson lined up electrical installation company Acro Electric, inverter supplier SMA, rack supplier UniRac and wiring company DC Power. He promised his boss, Ed Bless, that he and his crew could get the job done in time. On April 4, they pulled the trigger.
“It could be a world record,” Bless says. “I looked at Bradley and what he’s trying to do, and we said, ‘Go.’ ”
On the cloudy afternoon of April 21, the day before Earth Day, Zeve—chewing gum and sporting a red ball cap—stands on the Weekly’s roof, hovering near the crew. The workers lay out the 54 racks that will hold 162 panels (which they call “modules”), each containing 60 photovoltaic cells. They orient most of them to face south, where they will capture the most sunlight, with a few facing west, where they fit.
“What you see here is guys really hustlin’ to get this done,” Bless says, squatting next to me in blue jeans and a fisherman’s hat. He goes on to praise Zeve for being a forward thinker, a trend-setter, a model client whose investment will generate more than $1 million for the local economy and reduce America’s dependence on foreign oil. (I’d be brown-nosing if I reported any more of this conversation.)
Over the next two days, the crew attaches the panels to the racks and strings them together with cables, forming a photovoltaic (PV) array. By April 23, it’s feeding energy to the grid.
“Most everything in nature has some kind of photovoltaic effect, even your skin,” Bless explains. But that effect is generally too small to be useful, with one notable exception. When a photon (a little energy packet) of sunlight hits a solar panel’s silicon surface, it displaces lots of electrons, which the PV cells line up and shoot through the wires, generating electricity.
American power systems use alternating current, or AC, which switches the direction of electricity’s flow 60 times a second. But the PV panels, like batteries, produce direct current (DC). So the next step is to invert the DC energy produced by the solar panels into AC power, and match up the voltage and frequency, with devices called inverters—a pair of boxes spewing a bunch of multicolored wires from the wall near the upstairs bathrooms. These two inverters drive one electric meter, and three more downstairs drive another.
When the photovoltaics generate more electricity than the office uses, the meters spin backwards, feeding energy into California’s electricity grid like any natural gas plant, hydroelectric dam or nuclear reactor—on a smaller scale, of course, and without any polluting emissions or hazardous waste.
Bird plop on the modules can be a problem; so can shade from neighboring oak trees. Clouds dampen production, but even on an overcast day, enough sunlight shines through to generate about a third of the system’s peak electrical capacity, or 10 kilowatts. Over the course of a year, the system should generate about 50,000 kilowatt-hours.
While solar generates less than 1 percent of California’s energy, the industry is expanding. Bless says his seven-person, 5-year-old company is growing at a rate of 600 percent per year. He imagines the day when the state gets 5 percent of its energy from solar power. That represents a magical moment for Bless, a critical mass that will signal the beginning of a paradigm shift making green electricity the norm. “At that point the scales tip and it just goes,” he says, eyes on the sky.
Even if it’s still rare, solar electricity is pulsing from several other Monterey County businesses. Steve Neff of Neff’s Mill Cabinets in Marina sprang for a 35-kilowatt, $230,000 solar system in spring 2006. After the state rebate, the federal tax credit, the depreciation deduction and an 80 percent cut in his monthly electricity bills, he figures the panels will pay for themselves within about five years.
“I’m really happy about it,” he says. “I wanted to do my part for global warming and to save resources, and I was tired of being strapped down to a $1,200 per month PG&E bill, knowing it was gonna go up. I had the money to do it, and I’m the type to invest in my own company rather than in the stock market.”
Chartwell School did it in 2006, adding a 32-kilowatt photovoltaic system to the campus’s slew of other eco-friendly components, including south-facing windows that provide passive solar heating. Hayward Lumber and Clint Eastwood’s Tehama Golf Club also plugged into PVs.
Ahead of the curve in 2002, Salinas Valley Memorial Hospital installed a 150-kilowatt PV system—the biggest in the county.
But it doesn’t work for everyone. Morgan Christopher, who helped encouarge Zeve to look into solar for the Weekly, says he’s committed to installing a small array of about 30 panels on the tin roof of his café, but he had to put the project on hold until he can come up with around $50,000 to cover the up-front cost. “That’s not what the average mom and pop can afford,” he says dolefully, “but it does make long-term business sense.”
Not to every business person. Doug Wiele, a developer who’s leading the construction of the new Trader Joe’s in Monterey, says that while he plans to put photovoltaics on the roof of his own home, he doesn’t see them working for the store. “There will be many elements of green design in the building,” he says. “Solar panels are not among them.”
It’s not that they won’t work. Trader Joe’s will have a big enough roof to fit more than enough panels to fill the store’s electricity needs. And that’s the problem—Wiele is pissed that he can’t cash in as a small energy producer.
“PG&E won’t pay me for any surplus energy I create, and I can’t sell energy to my tenants,” he says. “So I spend the money to put the cells in and then I give the energy to PG&E. And then they sell it. I’m not puttin’ that stuff on the roof, because I’m not leaving it behind when I go.”
The California Solar Initiative, which added $2.5 billion to an existing $900 million in state rebate funds, is paid for by a surcharge on electric and gas customers. The 10-year goal is to add 3,000 megawatts of solar power to the state’s energy grid, cut PV system costs in half and create a self-sustaining and cost-effective market.
State Sen. Kevin Murray (D-Los Angeles) worked with Environment California, PV Now, the California Solar Energy Association and other groups to draft the bill that established the initiative. With the strong backing of Gov. Arnold Schwarzenegger, the bill sailed through the state Assembly in 2005 and got the California Public Utilities Commission’s nod in January 2006.
The 2006 rebate of $2.80 per watt of solar output will decrease by 7-10 percent per year, subject to the CPUC’s adjustments, under the assumption that solar equipment and installation costs will drop over time as more people go for it. The rebate will sunset in 2016.
The initiative has encouraged exactly the kind of “innovative financing” that Zeve put together for the Weekly’s solar project, says Bernadette Del Chiaro, Environment California’s clean energy advocate. Even homeowners—who can’t take the federal business tax credit or depreciation deduction—can often see a net savings within the first year if they take out a loan, deduct the interest from their taxes and zero out their energy bills, she says.
“It’s not a huge windfall, to be clear,” Del Chiaro admits. “Our average calculation for a home in California is, you come ahead by a couple dollars a month, which comes to 50 or 100 bucks a year.”
The state’s initiative sparked a scramble for solar throughout the state. In 2000, California businesses and homeowners installed about 2,000 solar roofs; two years later, that number had grown to 4,500, according to Del Chiaro. But 2006, the fattened rebate’s first year, saw some 8,000 new solar systems statewide, and this year is on pace to beat that. “I think it’s mostly just because of all the attention,” Del Chiaro says. “The state government is saying, ‘We want you to go solar; we want this to be cost-effective for you.’ ”
Meanwhile, Environment California is working to smooth a few bumps in the initiative. The current language requires solar panel owners to agree to “time of use” metering, which means that energy costs more at peak hours (such as 3pm) than it does during off-peak hours (such as midnight). PG&E, which supplies Monterey County, always uses time of use metering, but Edison, which supplies most of Southern California outside of LA and San Diego, charges a flat rate. As an unintended result, some Edison customers who were forced to switch their metering rates when they installed solar panels have actually seen their electricity bills go up, Del Chiaro says. Her group has drafted an emergency bill to strip the offending language from the initiative. If passed, it may be in effect by late spring.
Del Chiaro also notes that the initiative only provides rebates for solar electric panels, and not roof-mounted solar water heating systems that can offset natural gas heating. “That’s the other side of your energy bill,” she says. “It’s a no-brainer for California to do.” To that end, Assemblymember Jared Huffman (D-San Rafael) has authored a bill, AB1470, to provide homeowners and businesses with a rebate for solar water heating systems. Del Chiaro expects it to head to a vote in May.
On a federal level, Zeve says, there’s a bill in Congress to address the problems keeping businesses like the Weekly from being able to apply the full federal energy tax credit. “I’m hopeful it will go through, but it’s too late for us,” he says.
Despite the little glitches, Del Chiaro expects Californians to keep going solar in ever-greater numbers. “I think people are realizing that it’s here and now,” she says, “and not something of the future.”
But it’s the thought of technology’s future that keeps Zeve awake some nights, wondering if he’s gone solar too soon, if his panels will become dinosaurs while PVs get smaller, smarter and cheaper—like that $27,000 laser printer he bought in 1990, which cost $2,000 a year later.
Del Chiaro wagers that Zeve’s made a safe bet on solar. “It’s not like a cell phone or a computer where the technology itself will be made obsolete in a few years,” she says. “It’s going to produce electrons for the next 30 years, and there’s nothing within the grid or your toaster oven that’s gonna change that.”
Yet solar technology is undoubtedly hot. Some new German skyscrapers contain solar windows that look slightly tinted and contain tiny PV cells, Del Chiaro says. And contractors are beginning to install solar shingles, also containing nearly undetectable solar systems, on the roofs of new homes. Researchers are even working on a solar paint.
As PV technology heats up, so does the planet. Exponentially, as Al Gore and virtually all of the world’s credible scientists remind us. The gravity of global warming requires a quantum leap (literally, in solar’s case) in the way we generate energy.
That’s not to mention the military, economic and moral implications of our dependence on foreign oil; the land-based environmental impacts of coal mines and oil wells; the reality of the world’s fossil fuel supply peaking and declining; and the community benefits of local, nonpolluting electricity sources. These are issues that we champion here at the Weekly while sucking energy ourselves, clacking away at our computers, printing and faxing and brewing coffee.
Only now, we do it under a solar roof.
FOR A FINANCIAL BREAKDOWN OF THE AVAILABLE REBATES FOR CLEAN ENERGY SYSTEMS, VISIT DSIREUSA.ORG