After a huge public outcry, the California Public Utilities Commission (PUC) withdrew a controversial measure to do away with net metering for rooftop solar customers. The protests and uproar, however, have served a larger purpose. We are learning that there is a concerted and well-funded nationwide lobbying campaign by investor-owned public utilities to promote state legislation to discourage rooftop solar. A common thread through these campaigns, which often rely on misinformation and obfuscation, is the argument that rooftop solar customers are being “subsidized” by other customers, to the detriment of lower income families. Those countering the PUC’s claims are helping the public understand the many advantages rooftop solar has over large-scale solar installations.
Since 2000, California homeowners installed 1.37 million rooftop solar projects, more than any other state. Seventeen hundred of those rooftops are in Santa Barbara and a further 35,000 have been identified as suitable, which, if installed, would deliver enough clean electricity to power the entire city on rooftop solar alone. Santa Barbara is also demonstrating leadership with its new community choice energy program with renewable energy options.
Over 20 years the impact of solar installations on reducing CO2 emissions has been significant, equivalent to avoiding emissions of approximately 70 million metric tons of CO2, if generated by fossil fuels. Since California’s fuel mix is 40 percent fossil (3 percent coal and 37 percent natural gas), rooftop solar reduced California’s greenhouse gas emissions by about 28 million metric tons of CO2 over this period, helping California meet its emission reduction goals.
California has the technical potential to install enough rooftop solar panels to supply 71 percent of the total electricity used in California in 2020. At this level it would supply three to four times peak midday demand, and with adequate storage, could provide cheap energy for peak and night-time use.
Net metering opponents argue that “avoided costs” are being unfairly passed on to customers without solar. These “avoided costs” relate to the fact that under the net energy metering rules, rooftop solar providers can receive a credit for excess power they generate that is used by the utility. Even though a solar generator might not need this excess power on a given day or hour, the utility must maintain its distribution system and generators in a state of readiness to deliver power when it is needed. This “standby cost” is factored into the rates and disproportionately affects non-solar customers. What is being ignored here is a different set of “avoided costs.”
The “avoided costs” that need to be included in the evaluation are the savings that the utility gets from not having to pay for these rooftop solar installations. This includes not having to buy acres of land for a site; not having to purchase land for new rights-of-way to build new transmission and distribution systems to get power to customers; avoiding environmental impacts on desert land, agriculture, and wildlife; and finally, preventing the disease and premature deaths that would otherwise result from the emission of thousands of tons of greenhouse gases. These savings should be used to offset any cost increases seen by non-solar customers.
The original PUC plan claimed that solar owners were not contributing to the fixed costs for operating and maintaining the state’s electrical grid such as grid maintenance and wildfire mitigation. A review of net metering bills from Southern California Edison customers shows this to be untrue. We found the monthly bills not only included the cost of energy used but also the cost of transmitting and delivering the power, including meter service charges, bond repayments, sales tax, and other charges.
Utilities quietly ignore the fact that rooftop solar uses existing transmission and distribution systems, avoiding investments in new systems. Rooftop solar is also not responsible for starting wildfires and is less likely to experience outages in an emergency. These savings should be factored into its benefits.
In the early days of rooftop solar, the power generated but not used was a boon to utilities. They used this power (generated during the day) from homeowners and businesses and used it instead of having to bring online expensive peaking plants, paying for it with the cheapest average rates. Over time, that situation has changed, thanks to the increase in solar generation in California. Now there is so much solar energy during daytime hours that utilities’ peak period has shifted to 4 or 5 p.m. until 9 p.m. This new situation has prompted calls to subsidize battery storage so that excess power generated during daytime could then be used to offset peak evening demand. Note that this is not unique to rooftop solar; large solar farms also need storage.
We don’t buy the PUC’s argument that profits from rooftop solar are increasing costs to low-income groups who can’t afford to install rooftop solar. The rates are set by the utility, and they could create a separate rate for low-income customers. They could also provide higher incentives for landlords to install rooftop solar and batteries or provide rooftop solar subsidies on public housing and apartments designed for low-income renters.
We don’t believe anyone is getting wealthy from selling rooftop solar energy back to utilities. Today’s homeowner could find many more profitable options than investing $20,000 in a rooftop solar system with a minimum of seven to 10-year payback.
While large scale solar farms are important to California’s clean energy future, rooftop generation is also vital. Let’s not let the self-interest of shareholder-owned utilities discourage this critical path to meeting California’s renewable energy goals. The Public Utilities Commission should discourage the obfuscation that has clouded public understanding of this issue. If all of the benefits are presented, rooftop solar will be seen as a great investment for all Californians.