Will New California Rules Destroy Rooftop Solar?
Instead of Replacing Fossil-Fuel-Generated Electricity, California’s Proposed Rules Could Spell the End of Solar in Santa Barbara
No less a personage than Arnold Schwarzenegger blasted a proposal that would increase electricity costs for rooftop solar-power generators, arguing that this was no time to erect barriers to green energy, given California’s record droughts and catastrophic wildfires. The former governor caught everyone’s attention with his detailed critique, which was launched from the editorial pages of the New York Times, 3,000 miles away from his intended target: the California Public Utilities Commission (PUC).
“The model as proposed pounds the nail into the coffin of any rooftop solar,” Alelia Parenteau said. She leads the City of Santa Barbara’s Clean Energy program, through which the city buys green, carbon-free energy to power the electricity grid and plans the city’s solar micro-grid-based future.
Already, 1.3 million California rooftops host solar arrays, “supplying 9 percent of the state’s electricity in 2020, more than nuclear and coal put together,” said John Perlin, who advised on UC Santa Barbara’s first solar installations. About 1,700 of those rooftops are in Santa Barbara. With land scarce and the city mostly built out, rooftops are the best and only location for local green power, Parenteau said, adding that the proposed rules would cause the city’s programs to lose their economic viability. Her office had identified 35,000 suitable rooftops that, if they contained solar arrays, could meet the city’s electricity demand through rooftop solar alone.
A resolution passed by the city last week expresses opinions similar to Schwarzenegger’s and those of elected officials from Senator Dianne Feinstein to Assemblymember Steve Bennett: “We should incentivize people to install rooftop solar and also ensure that low-income ratepayers do not shoulder the burden,” Bennett told the Independent. “Unfortunately, instead of finding a way to do both, the PUC has essentially eliminated the incentive to install rooftop solar.”
The contested issues revolve around the unchanging fact that solar power is made when the sun shines and that after sunset, spikes in demand are costly for ratepayers and the environment. That’s when people are home making dinner, solar arrays are idle, and carbon-based power plants are running. Administrative Law Judge Terry A. Hymes, in writing the 204-page Proposed Decision for new solar rates, considered 18 proposals from the three utilities — PG&E, Edison, and San Diego Gas & Electric — and consumer-oriented groups like the CPUC Public Advocates Office, the National Resource Defense Council, and The Utility Reform Network.
The current rate structure has led to rooftop-solar owners paying little overall, because the “net” total of the credit received for generating power was 50-80 percent of what was billed for pulling power from the grid after dusk. An inequitable shift of costs of between $1 billion and $3 billion was paid by ratepayers who did not have solar, among them low-income ratepayers and renters.
The industry is focusing on the payment shift. Kathy Fairbanks, a spokesperson for the utility alliance Affordable Clean Energy for All, said, “We want solar to continue to grow in California, but not at the expense of disadvantaged communities, as is happening today.”
The equity discussion should include real solutions, said State Senator Monique Limón: “Equity is an essential part of the conversation, but the current proposed decision is not the only answer for reaching equity for non-solar low-income households,” she said. “I do not want low income households to bear the burden of high electrical cost. There are alternatives to what is being proposed. There could be more grant programs to support low-income homeowners pursue solar or to getting more solar onto apartment buildings.”
The most controversial fee in the proposal is a monthly fee — called the Grid Participation Charge — to cover distribution and transmission lines and other costs. The three utilities proposed fees of between $7 and $16; Judge Hymes settled on $8. The rate would be based on the kilowatts in an array, which are 6-7 kilowatts on average. That would add a $48-$56 monthly charge on top of the cost of the array, which averages about $15,000 these days.
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Senator Limón pointed out the charge was a deal-killer: “In Santa Barbara and along the Central Coast, that is a significant percentage of a bill. This type of monthly fee would make few people see the benefit of such a large financial investment.”
Among the other costs the utilities would retain — known as “non-bypassable” costs — is the “DWR bond charge,” an old Department of Water Resources bond that now sends ratepayer money to the California Wildfire Fund. First created to keep PG&E solvent when it declared Chapter 11 bankruptcy following the deadly Camp Fire in 2018, the pool is available to utilities that have paid claims and otherwise acted “reasonably” in mitigating fire potentials.
“Solar and storage” seems to be the new mantra in green energy and is the next step in the evolution of the home-based power grid. Senator Feinstein noted in a statement that “incentivizing battery storage is critical to address reliability issues during the early evening hours and bring longer-duration storage to market.” The Proposed Decision includes storage incentives, but with tradeoffs on the length of time for the credit system. Currently 20 years, it would be reduced to 15 years for customers who add storage for a 20-cent-per-watt rebate.
Parenteau noted that changing the terms of the credit system after the fact was hardly the way to attract future solar owners. The Proposed Decision has received a public drubbing and was postponed from its January 27 hearing date. Schwarzenegger’s editorial had coincided with the departure of the lead commissioner for the topic, Martha Guzman Aceves, who joined the Biden administration’s EPA for Region 9, former county supervisor Mike Stoker’s old job. A CPUC spokesperson said the postponement would give two new commissioners time to get up to speed.
Retaining incentives is the only way to increase solar in the city, Parenteau indicated. And storage is high on the city’s to-do list, such as the 500-kilowatt microgrid planned for the top floor of the Granada Garage. The energy would power the building and possibly the library across the street, but all could be threatened if the Proposed Decision isn’t modified.
“All this decision would do is defray utility costs on a bigger scale,” Parenteau said. “It wouldn’t increase access. Instead, it would actually eliminate access for almost everybody.”
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