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California leads the country in setting clean power policies and provides generous subsidies, so it’s not surprising that some businesses might try to game the system. The California Energy Commission contends that a wind turbine company has exaggerated the performance of its equipment and caused the commission to overpay in rebates.
In a letter to DyoCore, the commission said the company violated the rules of its Emerging Renewable Program (ERP) by “submitting grossly overstated information regarding the performance characteristics of the DyoCore SolAir wind turbine (model no. S80015dc) in order to have the wind turbine listed by the Energy Commission as eligible for use under the ERP.”
The commission has doled out $515,385 in rebates for 33 installations that use DyoCore’s wind turbines. It has approved, but not yet paid, rebate applications worth about $6.4 million, plus another $31.2 million worth of applications that have yet to go through the review process.
The commission said it intends to recover excess payments and may refer the case to the state Attorney General’s office. The commission staff has investigated the case and filed the initial complaint, but the commissioners have to do their own review and are holding public hearings before deciding what actions to take.
DyoCore claims its SolAir turbine can produce 1.6 KW of power when the wind hits at 18 miles per hour, the commission said. The commission asked KEMA, its technical contractor, to examine that claim, and KEMA concluded in a report that the 1.6 KW is “7.5 times greater than theoretically possible at that wind speed and 9 times greater than the optimal output of a state-of-the-art turbine rotor with the same diameter.”
In a written response to the commission, sent to us by DyoCore’s CTO David Raine, the company disputed the allegation and said it provided the right data. The company also said it’s willing to use different performance figures for its turbine and plans to provide data from tests conducted by a third party.
“The allegations in the complaint are misleading and false,” the company wrote.
The case reflects the potential abuses that generous incentive programs can attract, beyond just wind energy. The California Public Utilities Commission, which runs the state’s solar incentive program, added a rule last year that requires installers to justify why they would charge more than $14.70 per watt for a solar electric system. That price was way higher than the average.
Although the solar incentive is based on the system’s expected power output, not price, the utilities commission didn’t want consumers to be overcharged for goods and services. Plus, a federal tax incentive is based on the price of a system. The limit is “part of efforts to protect consumers from over-priced solar systems and thwart fraudulent federal tax claims.” Molly Sterkel, who oversees the CSI program at the CPUC, told us last year.
Clean power exaggeration
Based in the southern California city of Carlsbad, DyoCore makes small wind turbines that can go on rooftops or mounted on poles (such as utility poles), making them suitable for installations at homes and businesses. The commission put DyoCore’s SolAir turbine on its list of eligible equipment so that projects using the turbine would be eligible to claim rebates.
Then something peculiar happened. The commission said it was “flooded with more than 1,000 rebate” applications involving DyoCore’s turbines. The rebates are calculated based on the expected power output of the turbines. The performance claim made by DyoCore would make it possible for each installation to get up to $28,000 in rebates, and that amount would cover the full cost of the project and make the system essentially free to its owner, the commission said.
The commission suspended the ERP in March this year after receiving many applications involving DyoCore’s gear and noticed that many of the projects were going to be planted in places with poor wind sources. The commission directed KEMA to look into data submitted by DyoCore. The commission also began tightening the rules for manufacturers to get their equipment on the list.
Before the program suspension, manufacturers either submit their own filed performance data or get an outside organization to certify the equipment conforms to an international electrical equipment code. KEMA is charged with making sure all necessary documents are provided before the equipment is put on the list, said Amy Morgan, a spokeswoman for the commission. KEMA accepted DyoCore’s performance claim and added the turbine to the list.
Photo by DyoCore