Utilities Sing Same Old Tune on Community Solar in Maryland

 

The same week 196 nations came together in Paris to agree on a pledge to fight climate change, a gathering of a different sort in Baltimore witnessed the “we can’t do it” crowd reprise their deny, delay, and cast-doubt performance that has been going on since the start of this millennium. The gathering in Baltimore was the Public Service Commission (PSC) hearing on proposed regulations to start a community solar pilot program in Maryland. While solar has been growing rapidly in the state, bringing jobs and clean energy, not to mention reducing demand on the grid, there are some who think we need to still study solar a bit more before deciding whether it makes sense for us. Who are these star actors in the “can’t do it caucus?” Shockingly (no not really), it’s our very own utilities and a few other kindred spirits.

The utilities main message at the hearing was that Maryland isn’t quite ready to do community solar and we need more time to study solar before embarking on a program. Yes, we’ve already installed 300MW as a state, but they are apparently still learning what this new-fangled technology means. For example, it would seem to be common sense for the utilities to look at their grids and let the solar industry know where good points on the grid to build are and where are points where it should not be built. This advanced knowledge would save a lot of time and energy for solar developers. Sadly, no such maps exist. In the current system, solar developers secure a site, do some work on it, and then apply for what’s called an interconnection agreement with the utility. After months of waiting and money invested, they are told whether they can in fact affordably interconnect their system to the grid at the site they’ve chosen. The utilities need to do better.

When it comes to billing customers for this new community solar program, the utilities fall back on the line they’ve been using for any new program since I started following this stuff back at the turn of the century – ‘we can’t do it.’ These days, it would seem fairly easy to figure out an automated billing system for a few hundred new customers a year. One panelist at the PSC hearing even suggested the utilities could buy a software package off the shelf to do their billing. But no, these stalwarts of the ‘can’t do’ attitude say it’s complicated and they’re not sure they can figure it out. And if they do figure it out, they warned, they may need to raise our electric rates to pay for all the billing contractors they’ll need to hire to implement a new system.

They’re not alone in their desire to prevent solar from becoming too popular. State Senator Hershey (“I love solar as much as the next guy, but……”) and the new Director of the Maryland Energy Administration both chimed in with concerns that basically said community solar could become too successful, and then what will we do?

Thankfully, our local solar industry was well represented, as were environmental advocates and even a representative from the Montgomery County Dept. of Environmental Protection. They all forcefully demonstrated how community solar will help Maryland get more clean energy, more jobs, and more grid stability. Most importantly, they showed how community solar can finally bring the promise of solar energy to the vast majority of people in our state who have not yet had access to it, particularly the low to moderate income community. The PSC commissioners will have to decide which path they want Maryland to follow. Let’s hope they choose the path of the world at Paris in saying yes to a cleaner, greener future for us and our children.

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Maryland on the Road to Solar Gardens

Maryland could be taking a big step towards joining the leading solar states in allowing community solar or solar garden projects. The General Assembly passed a bill that instructs the Public Service Commission (PSC) to create a pilot program and set the rules for it by early next year. Once in place, companies will be able to build large solar arrays that can produce power sold to consumers who are not directly connected to the array. The bill still has to be signed by the Governor, but with widespread bi-partisan support, that should not be a problem.

There are many variants to community solar, but in essence it is the only way for the vast majority of the public to gain access to the benefits of solar power. It works like this – a company builds a large solar array and then sells the power that array produces to many different customers (commercial and residential). The power from the array flows into the grid, but the customer gets credit for his/her portion by the process of virtual net metering. Virtual net metering is a process whereby the utility virtually spins a customer’s meter backwards to give credit for energy produced off sight. For example, if my home uses 1,000 kWh of electricity in a month, but I’m buying 700 kWh a month from a community solar project down the road, my meter would get virtually spun backwards and I would only be shown to be using 300 kWh in that month. Because the solar power I’m buying will be cheaper, I’ll be saving money while helping promote clean energy.

Community solar opens the door to solar for the 80% of the market that can’t currently get solar. This would be renters, small businesses that lease their spaces, and homes with shading or poor roofs. It’s an exciting time for Maryland, but the deal is not done. Solar advocates have to participate in the PSC process to ensure that the regulations for the pilot program are fair and enhance rather than preclude solar development.

Purchasing Clean Energy without Getting Burned

Environmentally conscious consumers know that they can “vote with their wallet” by purchasing green goods and services, and by supporting socially conscious businesses. What many don’t know, unfortunately, is how to best choose their options. This is especially true in the clean energy space where a company’s marketing efforts, and the confusion of the marketplace may cause them to make unwise choices.

Presently, there are four ways that are most common for buying clean energy. You can install a solar system on your roof or property, purchase green electricity, purchase Renewable Energy Certificates (RECs), or invest in energy efficiency upgrades (“negawatts”).  Each option comes with its own benefits and costs.  I’ll start by looking at purchasing green electricity.

There are a few pitfalls to avoid when deciding to buy green electricity from a retail electricity supplier. I’ve highlighted a few right here:

Certification and Verification

When you switch to green electricity for your home or business, nothing material will change for you and there’s no physical evidence of your purchase such as a piece of equipment. Sure, you have a contract that promises you green electricity, but that is not enough assurance for many people. One good way to know that you are actually getting the green power you are paying for is by making sure you buy green power that is certified and verified by Green-e. The folks who run Green-e require suppliers to demonstrate that the green energy they are selling matches the green energy they are buying. This is done through a third party audit. I know of no other certification and verification processes that meet the high standards set by Green-e , though they may exist.

Teaser Rates

I heard one clean energy company executive on the radio telling the audience that switching to wind power from them would cost $8-$12 a month. That sounds reasonable until you dig a little deeper and learn that they are offering a three month “teaser” rate. The affordable teaser rate of 9.7 cents/kwh or so expires after three months, at which point the consumer is subject to incredible price spikes through a variable rate. What might those spikes look like? The company’s fixed price deal, which tells you the kind of rate they think they need to make off their customers over the course of a year, ranges from  12-13.5 cents/kwh. That’s the difference between paying $8-$12 a month or $40-$50 a month. When you put it in annual terms, you really get the picture. With the higher rates, you could be facing an electricity bill that is as much as $600 more than you would otherwise pay. That’s for an average home. If you are a bit wealthier than average and have a larger home, chances are your annual bill could hit close to $1,000.

Avoid “teaser” rates at all cost. Despite the pleasant-sounding rationale you may hear from the energy company, it will end up being a bad deal for most of you. Why? Because as an executive at one of these companies told me, they really offer the teaser rate for one reason – they know that 80% of their customers will forget to keep checking their energy rate after three months. That’s right. They have it down to a science. They know that you will sign up thinking that after the teaser is over you’ll just switch elsewhere, but that 80% of you never do.

Dig Deeper

Another aspect of disingenuous marketing you may see is a company that purports to be the little guy fighting the rest of the “big greedy” energy world. Like all deception, there’s probably a grain of truth to it. But do consumers know the fat profit margin these guys are getting for the energy they are selling you? In order to understand this, you have to understand the main components that make up the cost of green energy. Back to that 13.5 cent wind power example. In this case, the green part of that power, the part of that rate that actually goes to the wind farm is likely around 1.5 cents.  Yup, that means you are paying 12 cents/kwh for brown power, which is the exact same power your utility offers at rates as low as 8.5 cents/kwh.  So why such a huge discrepancy? Two words – Profit Margin. The company probably makes in the range of 50%-%70 margin on the product they sell you. I say probably because I’m making an educated guess based on market conditions. I have not seen their books. There are other smaller factors as well, such as cost of capital, but I believe margin makes up the largest chunk of the difference.

Don’t get me wrong, I’m all for profit and the competitive free market. What I think is morally and ethically unjust is sticking your customers with exorbitant rates in order to feed the profit margin needs of your investors all under the guise of being progressive. A company is either a consumer friendly, 100% honest and transparent company that offers the most competitive rates it possibly can or it isn’t. I think in order to be the former, a clean energy company has to choose steady organic growth over VC -backed hyper growth. This means they should not try to make exorbitant profits on the backs of their customers.

Another example of a questionable marketing practice is a company that sells green power among a suite of products, but then works to prevent clean energy laws from passing at the state or federal level. Their green power products are probably legitimate, I’m not questioning that. But if your intention is to “vote with your wallet,” than you may be voting for the wrong candidate. A portion of the dollars you spend with them goes to lobby against the very thing you are trying to promote.

Conclusion

The thing all of these practices have in common is their reliance on uneducated and/or overstretched consumers. It takes a little homework and a little more time to find out the truth behind these marketing efforts. Or it takes the ability to say “no” to certain products that you know are designed to take advantage of your lack of attention (ie. variable rate or “teasers”). Even in this case, I don’t want to paint too broad a stroke here. There are some variable products that are tied to the variability of the utility standard rates. Those are fine because they are actually market responsive, and you know the premium you are paying every month. But this last point just serves to prove once again how much a consumer needs to be educated before venturing into the clean energy field by purchasing green power from a retail electricity supplier.

Why Chestnut Hill United Church is Supporting ChoosePAWind by Joy Bergey

Choose Pennsylvania wind to power your home. What a wonderful idea. It’s no-brainer to me to choose electricity whose generation doesn’t exacerbate climate change, pollute the air and water, or generate nuclear waste that will last for thousands of years and society hasn’t a clue how to store safely (PECO’s “regular” electricity comes largely from fossil fuels and nuclear plants, with these attendant woes).  Choosing wind power that’s “home grown” right here in state also means that you’re helping to create sustainable, well-paid jobs for our fellow Pennsylvanians.

It’s my contention that choosing to use clean electricity in our homes, workplaces, and schools is likely the biggest thing we can do to slow down global warming. Can most of us give up our cars? No. Or afford an electric car powered entirely by solar panels? No again.

To that point of solar panels: The price of solar technology has come way down in recent years, and continues to fall. And yet, a homeowner in Pennsylvania would still have to lay out thousands of dollars up front to put PV panels on her or his roof. (In my case, I’d be willing to do that, but my property is “treed out,” meaning that I’d have to take down several large trees to expose the roof to adequate sun to make the PV panels work. And since I live quite close to the Wissahickon Creek, those large trees of mine are providing other valuable eco-services, like helping to sop up storm water and prevent flooding.)

So, if you don’t have the roof, spare capital, and/or time to investigate, purchase, and install solar panels, do something that’s actually much easier, and every bit as effective: Buy electricity generated by the wind. Buy Pennsylvania wind, specifically. (If you’re reading this, you probably know that “buying local” offers all kinds of benefits, both economically and environmentally. The “buy local” benefits extend to energy as well.)

I’m delighted that the congregation that I’ve belonged to for two decades, Chestnut  Hill United Church (in northwest Philadelphia) is participating in the ChoosePaWind campaign. We’ve already designated that the income from this campaign will be used to further our social justice work. It’s a win-win-wind situation.

Authentic Marketing through Community Engagement Part Two

Clean Currents Cycling Team

Part Two of a three part series on Community Level Marketing (CLM)

Click here for Part One

Community Level Marketing (CLM) may require a shift in the mindset of your organization. Frankly, CLM may not result in immediate sales or a short-term favorable ROI. Rather, it represents a long-term commitment from your organization to the community it is targeting or serving. Think of it as a three step process starting with CLM, then moving to more traditional outbound marketing, followed by direct sales. CLM doesn’t have to be costly, but it does require a commitment of staff time and organizational support, especially at the upper management level. The community will see leadership’s involvement as further evidence that this is not just some sales or marketing ploy, but rather a real part of the organization’s brand identity. Of course, having leadership’s support is also vital to keep other stakeholders patient while the campaign gradually materializes.

The four spokes of the wheel of CLM are:

  • Education
  • Credibility
  • Action
  • Reward

Here’s a brief description of each spoke as I see them:

  • Education

When you engage in CLM, a big part of the value proposition you as an organization bring to the table are the resources and expertise you have. Your community leaders will likely rely on you to provide them a “tool kit” to use for outreach. A good CLM plan should have a simple, easy-to-use set of materials, including templates, talking points, background information, and other collateral. The material you provide should not be overtly trying to sell your product, though should brand the material, for sure.  Also, your community leader may volunteer for the campaign because s/he has a related cause s/he wants to push. As long as there is open communication and the cause aligns with your campaign, this can be a big benefit to your organization. The expertise you provide can go beyond the outreach materials. Your organization may have staff that can speak to certain issues important to the community leader, or you may have access to other experts that the community leader cannot reach. The bottom line with education is that it forms the foundation of your pitch to the community leaders because it’s your biggest value add.

  • Credibility

Your CLM efforts will be for naught if your brand doesn’t have credibility. This credibility comes in two forms. First, the obvious thing is that you need credibility in the space where you are operating the CLM campaign. Don’t over reach by branching into areas that don’t make sense. That’s not to say you can’t address a broader category than your possibly narrow organizational focus. For example, a company like Clean Currents, which fought climate change by selling clean energy, could have credibility in other environmental areas such as recycling or energy conservation. Maintaining credibility also means being true to the immediate purpose of the CLM campaign. The campaign rationale has to have a purpose that creates positive results for the community.  The campaign cannot be a sales-by-other-means approach. If you want a sales campaign, try something else.

  • Action

This may seem self-apparent, but a good CLM campaign should incorporate an action component for the members of the community. It is not simply an educational or awareness campaign.  The thing that separates CLM from other kinds of marketing is the action the campaign inspires. The action can be an actual physical project in the community, such as building a community garden or it can be a digital action, such as a social media campaign. It depends on what community you are targeting. Action can also involve advocating for an issue or legislation related to that issue. The point is that the action is the center around which the entire CLM campaign revolves. It’s the glue that holds it together.

  • Reward

The CLM campaign needs to have a reward component at the end and/or as an incentive for actions people take in the midst of it. These rewards serve as a both an individual and a group incentive. It’s important to note that the incentives do not need to be financial, as many may think. Rather, incentives that are a better fit with CLM are ones that carry social capital. The star performers and community leaders should see visible benefits if the campaign goes well. The community should see group benefits as well. Examples of good benefits are public recognition, access to exclusive information, or a meeting with your CEO or Board members.

Stay tuned for Part Three next week for specific examples of CLM in action.

Building Authentic Brand Credibility: It Takes a Community

The Clean Currents Energize Responsibly Campaign Reached New Consumers

The Clean Currents Energize Responsibly Campaign Reached New Consumers

Much has been written and said about the loss of trust in brands and institutions. Not surprisingly, when consumers are asked about how they make their buying decisions, far more say they rely on the opinion of people they know then a branded message/ad. If your brand is competing in a relevant category, chances are high there are many competitors there as well. Fortunately, getting through the white noise of the digital era, the holy grail of marketing, is simply a matter of building the right community for your brand, or as I call it, “Community Level Marketing” (CLM).

How do you do CLM? The first thing you have to do is identify your community. This may not be the consumers who buy your products. At Clean Currents, for example, we sold green energy, yet we identified people who love outdoor activities like hiking, biking, kayaking, etc. as the target community for our “Energize Responsibly” campaign. We enlisted our commercial customers, as well as local relevant organizations, in the campaign. So we tabled at Charm City Run, a Baltimore area chain that serves the running community and we partnered with a local parks organization. To find the right community, think of the places, ideas, hobbies or interests that unite a segment of your core consumer group. It could be their faith institutions, schools, neighborhoods, or just love of the outdoors that unites them.

Once you have your target community identified, the next step is to build a campaign. There are four components to a good CLM campaign:

  • Education
  • Credibility
  • Action
  • Reward

Before we get started, be sure you’re in the right frame of mind. As Polina Pinchevsky (@PolinaPeg) from socially-conscious marketing firm, RoundPeg Communications recently pointed out in a presentation on CLM, it’s not for the short-sighted or for those seeking immediate rewards for their brand. It requires a long-term commitment from all levels of your organization and the understanding that CLM is not just about selling a product or service. It’s about building a strong, credible, well-known brand whose messages will be trusted by the consumers it seeks. Ready to try it out? See Part 2 of this series as we delve into the four components of CLM.

Running on Junk?

Runners should be at the forefront of healthy eating and a commitment to a healthy planet. After all, running is all about improving your body’s health, and eating and breathing obviously have a big impact on that. So you can picture my shock when I participated in my first 10K race as part of the Marine Corps Marathon the other day and saw the vendors/sponsors at both the fitness expo before the race and the finish-line celebration after the race. There was barely a smidgen of anything resembling eco-friendly products or services, while there was a plentiful amount of junk food offered.

“Protein” is apparently the buzz word in good eating for athletes. Nearly every product I saw advertised high protein content. That’s all well and good, but the other ingredients in many of these products included refined sugars, high-fructose corn syrup, chemicals, milk (?!), artificial ingredients, and some things I could not even pronounce. I was expecting a corn-a-copia of vegan health bars, great unsweetened, dairy free drinks, organic protein boosters, and smoothies with loads of dark green leafy vegetables and fruit. There was none of that, with the exception of Clif Bar. You can get protein from good sources.  I eat a health bar almost daily called “Ever Bar,” which comes packed with 11 grams of protein and a simple list of healthy ingredients, all of which I can pronounce.

There were no environmental groups, or clean air groups present. At Clean Currents, we ran a campaign called “Energize Responsibly” targeted to runners and other outdoor athletes. The idea was that these folks care a great deal about clean air and parks because they are outside exercising all the time. It was a big hit when we ran it as the audience really seemed to understand the message. Yet, at this event, there was not a single table talking about clean air and water, or the need for more open space and parks. The only advocacy group I saw was, believe it or not, the Beef Council. They were passing out beef jerky (“protein”) and literature extolling the sustainability of beef. That wasn’t exactly what I had in mind when I was thinking some “sustainability” groups should be at this event.

When I finished the race, thankfully the marines gave me a bottle of water and a banana. Good start. But the next marine give-away was a bottle of something that I believe is called a protein shake. It’s a bottled drink with like 18 grams of protein. I almost drank some until I read the label and it looked like a shopping list for a chemistry lab. To top it all off, the drink was milk based. I’m not a nutritionist, but I’m pretty sure drinking milk after a big run is a huge no-no.

There are so many great, earth-friendly, body-friendly products for runners and other athletes to consume before or after exercising. Our friends in the natural food industry should be providing these alternatives to runners, so the junk food guys don’t own the field all to themselves. A running event is one of the best places to help people make the connection between food that has a low impact on the planet and a high positive impact on health. As for the environmental groups, they can’t be a no-show in this world and expect to grow their community. Runners may not think they’re environmentalists, but their choice of exercise forces them to be in the green camp.  After all, dirty air and junky food are to runners what gusty winds and alcohol are to a high-wire act.

Some samples of junk food for runners.

Some samples of junk food for runners.