California’s utilities should end their war on solar net metering

A letter from PG&E – dated March 20, 1995 – predicted a doomsday scenario if a proposed bill establishing California’s first net metering law were to pass: “SB 656 is a bold scam by the solar power industry to force our electric customers to subsidize the sale of expensive residential photovoltaic systems.” San Diego Gas & Electric warned in its own opposition letter that the bill would “shift the burden of those costs from customers taking advantage of this ‘net energy metering’ arrangement to all other customers.” In spite of the utilities’ misguided opposition, the bill passed the Legislature and was signed into law by Governor Wilson, laying the groundwork for a policy that has helped build California’s clean energy economy into the national leader. 

Net metering is a simple yet critical billing arrangement for our state’s solar power producers. With net metering, solar producers receive electric bill credits for the excess solar energy they put back on the grid during the day. At night the solar producers use energy from the grid thereby using the credits they generate during the day. If they use more energy than they have credits, they pay the utility for the difference. Conversely, if the credits they generate exceed their energy usage in a month, those credits carry to the next month, similar to rollover minutes on a cell phone.

This is a fair and equitable way to spur the adoption of solar power in California. Everyone knows it is expensive for the utilities to provide electric energy during the day and it is cheap for them to provide it at night. Solar producers give the utilities energy when it is most expensive for them and use energy when it is cheapest. This is why it makes sense. This simple and fair billing arrangement has resulted in many California schools, water districts, farms, local governments and non-profits going solar. These entities are saving on electricity costs thanks to net metering – to the tune of an estimated $2.5 billion over the next 30 years.

As for that “bold scam” that would “shift the burden” from solar customers to all other ratepayers? According to a study commissioned by the Public Utilities Commission, for the average non-solar customer with a $100 monthly bill, the net metering “cost shift” the utilities warned of totals 38 cents a month;  a small price to pay for cleaner air, more jobs, and greater energy security for our State. 

Furthermore, if we are going to talk about “cost burden” why is it that even though natural gas prices have fallen to World War II levels, electricity rates keep going up? Why is it that while everyone else in this economy is tightening their belts, the utilities keep asking for a raise on rates? If we are going to talk about “cost burden” perhaps we should take a closer look at the burden of the bloated and inflated prices utilities are charging as their costs decrease.  Just recently all the Investor Owned Utilities posted record profits. Talk about a “bold scam.”

In recent months the utilities have painted the picture that those who go solar are being subsidized by median and low income ratepayers who “can’t” go solar. Once again, the facts fly in the face of such assertions. Net metering benefits low and middle class Californians. Two-thirds of California’s home solar installations since 2009 have been in zip codes with median incomes from $40,000 to $84,000 and one quarter of customers with net energy metering solar systems have incomes below the state median income.

To put it in perspective, the City of Hawthorne with a median income of just over $43,000 has as much solar capacity per capita as Beverly Hills. Solar is booming in the median and lower income communities due to recent developments in the industry. Solar panel prices have dropped 70 percent in the past three years. Meanwhile, the affordable leasing of solar systems represented more than half the residential solar sales in California in 2011, and some predict they will exceed 75 percent in 2012. Today, you can go solar without spending a dime out of pocket and save money each and every month through lease options.

All this must scare the power companies. Because just as they did nearly two decades ago, the utilities are engaging in a deceptive misinformation campaign, circulating a letter in the State Capitol that misleads legislators about the effects of net metering. They are supporting legislation by Assemblyman Steven Bradford (D-Gardena) that would effectively cut the number of installations permitted to be installed in the State in half. This proposed legislation would result in the end of new net-metered solar power systems in California by as early as 2014. 

Meanwhile, the state’s solar industry, along with the author of the original net metering legislation, have asked the PUC to clarify the way it calculates the amount of power being put onto the grid. And in April, the PUC issued a proposed decision clarifying that utilities should use the cap calculation as described in the existing legislation. This proposed decision will result in more California businesses and ratepayers from all backgrounds having access to the many benefits of net metering.

That is why the utilities are now trying to short-circuit the PUC action with legislation to keep the calculation of net metering the way the utilities want it, not the way it was designed to be calculated under existing law.

California is the nation’s leader for deployed solar power systems, and our solar industry is the state’s fastest growing. For decades the utilities have been trying to shut down the solar industry and penalize those who embrace the technology and, to date, the legislature has stood with the industry to protect it from the attacks brought upon it by the massive utility lobby. This support needs to continue so that the State can reach it’s renewable energy goals.

Ed’s Note: Danny Sullivan is a leader of the San Diego Solar Coalition.

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