The publicly-owned Sacramento Municipal Utility District, or SMUD, had already installed the first utility-scale PV array in the nation back in 1984. By the early 1990s, the utility saw a potential for rooftop solar and launched its PV Pioneer program, placing dozens of solar arrays on their customer’s rooftops, for a fee. The standardized rollout meant dramatic declines in the cost of solar, long before the industry had launched anywhere else.

In June, ILSR’s Director of Democratic Energy John Farrell spoke with Brent Sloan, the “solar dude” at SMUD, to talk about these ahead-of-the-curve PV Pioneer programs and how his utility was created a viable rooftop solar market 20 years before other utility’s have “waved the white flag.”

From the Ground Up
In the 1980s and ‘90s, the electric utility industry was all about Big: big mergers, building bigger power plants, selling big amounts of energy. But the Sacramento Municipal Utility District in California decided to go another direction.

Unlike investor-owned utilities, beholden to shareholders, SMUD was and is owned by the local government. It had a history of being responsive to its customers, such as when it closed the Rancho Seco nuclear power plant just 14 years after it began operations. The closure, in 1989, was one of the catalysts for the utility’s search for energy alternatives like solar.

The PV Pioneer program launched in 1993, with the intention of rapidly driving down the cost of solar. The “secret sauce” was the utility’s buying-down power and providing a standardized solar panel package to its ratepayers, and  standard permit application to local governments. “You can have any solar system you want in Sacramento as long as it’s a black Model T,” Sloan says about the 2 kilowatt solar system then offered to all SMUD customers. The popular program asked customers to pay a $4 per month premium to host a SMUD-owned solar array on their rooftop.

By the late 1990s, the utility felt that cost reductions made customer ownership of solar more feasible, and its Pioneer II program offered subsidized, utility installed solar arrays to customers. In 2001, the total cost of a 2 kW solar array purchased under the program was $9,000 ($4.50 per Watt) with the customer's share at just $6,000. That installed cost was nearly 10 years ahead of its time: $4.50 per Watt was the weighted average installed cost of all solar PV tracked by the Solar Energy Industries Association in 2011.

Sloan couldn’t vouch for the linked study where we got our numbers from, but he said the price drop from PV wasn’t magic. Before most others, SMUD workers were learning best solar installation practices, and potential solar contractors and building officials were then trained by the utility. Sloan and his team were crawling through attics, determining how many pounds of solar equipment could fit on the roof, long before industry-approved numbers became the norm.
Softening the Costs
Alongside the PV Pioneer program, SMUD created a standardized permit package for its several jurisdictions. That meant solar contractors could get a permit within 24 hours of submission and, for some time, all involved cities waived rooftop solar application fees for SMUD customers. The ultimate goal was to drive down the installed cost of solar far enough that SMUD and subsidies would not be necessary.

SMUD’s efforts were superseded—to some extent—by the statewide California Solar Initiative program, which dramatically diversified the solar market (to the potential disadvantage for cost reductions). Although solar installations have continued steadily for some time,