Cost Saving Opportunities: A Better Source of Energy (Solar & Battery Walls)

By:  Guest Author Tony Wong, Solar Pros

As financial advisors, we often see businesses struggling with unpredictable utility costs that wreak havoc on their budgets. You know the challenge: Just when you think you've got your expenses under control, another utility rate hike throws your projections off track.

Why Utility Management Matters to Your Bottom Line:

• Utilities often represent 5-10% of operating expenses

• Unexpected rate increases can deplete cash reserves

• Volatile costs make accurate financial forecasting difficult

• Unpredictable expenses impact investment decisions

The Hidden Cost of Utility Volatility: 

When your utility costs are unstable, it affects:

• Cash flow management

• Operating budgets

• Financial projections

• Investment planning

• Growth strategies

California has a major problem with its electrical grid — it’s too expensive to maintain and there is not enough energy at the time its needed, especially the time between 4-9 pm. Why? The sun goes down and with it so does all the solar generated energy. The result is higher electric bills and rates climbing each year. In the last 5 years, the major California utilities’ (PG&E, SCE, SDG&E) rates have increased over 60%. Both PG&E and SCE were approved for an additional 10% rate increase this year and SCE will be up 20% by this December from December 2024.

For several years, many have hyped solar as a solution. However, many have not seen the return on investment they thought it would be.

Strategic Solution: Cost Control Through Energy Independence: 

We've identified a strategic opportunity that aligns with sound financial management principles. Through our research, we connected with solar expert Tony Wong, who introduced us to an innovative program – it's the new Virtual Power Plant program, which provides a way to get more value out of your solar investment for your business.

• Lock in predictable energy costs

• Reduce utility expenses by 20-40%

• Protect against future rate increases

• Improve budget forecasting accuracy

• Maintain better cash flow control

Where does the value add come from?

Over the last few years, we've seen a reduction in the amount of Federal tax credits available to subsidize construction and installation of solar. Utility companies have reduced the amount they “pay” for solar energy production while at the same time raising the rate they charge when a solar user needs to pull energy from the grid. With these changes, the breakeven point on a solar construction project has extended well past 12 years. Even with a lease, many property owners now have a large “annual settlement” bill with the utility company.

The latest key enabler is the battery wall. The battery walls make it possible to make a property self-powering, thus removing its load from the grid. The energy during the day from the solar panels are stored in the batteries and not just thrown into the grid when they are not needed. Therefore a business receives the lowest “price” from the utility. As an additional source of income, with the owner’s permission, the utility company can tap into and pay more to the owner for the stored energy.

This distributed battery initiative works! In 2024, energy provided by battery backup supplied 100% of the state’s demand for up to 10 hours on 98 of 116 days, a record. 

During the last two years battery walls have become a potential solution to circumvent the energy “prison” described above.  However, the battery wall is often too expensive for most small businesses and consumers….a Tesla Power Wall 3 is $15,000.

The Solution:

There is a solution for some homeowners and businesses (does NOT apply to properties titled under an LLC) which helps to cover the battery wall investment.  This new program, fully funded by utilities and various entities, helps reduce the power demands on the grid by making properties into “Virtual Power Plants”.

In the meantime, some pro tips…

> Anyone buying a property with an existing solar system, do NOT assume the solar system is still on a lease until you ask yourself, What is the kWh rate on the lease? If it is more than $0.34/kWh don’t assume the lease (the low rate in SoCal Edison is $0.31/kWh). The leased system “lender” is obligated to remove the system at their cost. Definitely don’t buy out the lease. It’s expensive and why would you want to own a degraded system that was valued too high years ago.

> I would not recommend buying, leasing or financing any solar system. Again, the return on investment is poor and you probably hear people talk about the hassle of a solar lease when it comes to transferring it when the home is sold.

> Instead, take advantage of the new no cost Virtual Power Plant program. The program is 100% funded so there is no cost to you if you qualify. This program became available in the last two years to help the California electricity supply issue and its high cost of energy. There are currently only a couple of companies in California that can offer a no cost program — Freedom Forever and Sunrun. Essentially these companies own the system but use the property’s roof; the system is a TPO or Third Party Owned arrangement.

I recommend Freedom Forever www.freedomforever.com because unlike Sunrun, Freedom:

• uses only USA-made products…all top brands like Tesla, SolarEdge, QCell

• is the largest soar installer in the USA…they install over 60% of Sunrun’s accounts

• only submit applications to the program if they can reduce the homeowner’s current average monthly bill

• uses only a Power Purchase Agreement which does not involve liens or financial obligations on your home, and thus is easily transferrable, just like a utility account transfer

• provides a 25 years warranty and performance guarantee…bumper-to-bumper, including the batteries which only have a 10-year manufacturer’s warranty

What is the classic profile of a property owner who may qualify:

•   must be an owner...no renters

•   have either an EV, a pool or spa, or significant heating and air-conditioning needs

•   concerned about power shutdown; batteries provide power backup

•   concerned about high electric cost, especially the increasing rate hikes

•   hates to wait past 9pm to do laundry, wash dishes, etc. at a lower rate

The process to determine if you or your business is eligible is simple. It starts with a pre-qualification that can be performed using your latest utility bill. There is no obligation or out-of-pocket cost during the application process. If approved and the property owner accepts the new lower monthly utility cost, there are a few more steps toward installation which can still be done without an initial investment. The property owner can cancel the application process up until the installation is scheduled.

Conclusion: Bringing predictability to your utility costs could be a game-changer for your business. Seeking out energy solutions can increase the bottom line. To learn the steps to save money and generate your own power,

Tony Wong is a solar professional who loves bring businesses and individuals energy solutions that actually go to work for your budget!

Tony can assist you with all of your solar needs. Interested property owners can apply by contacting Tony Wong at (949) 294-8330 or anthonywong@solarpros.io.

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