CA’s existing solar power system favors the wealthy

Solar energy units atop houses in Vista, in northern San Diego County. (Photo: Simone Hgan, via Shutterstock)

Over the past few weeks, we have seen an increase in activity and misinformation from opponents of AB 1139, California Solar Equity and Ratepayer Relief legislation, authored by Assemblymember Lorena Gonzalez (D-San Diego).

AB 1139 reduces rates for 91 percent of energy ratepayers, increases access to rooftop solar for those at the lower end of the economic ladder and creates thousands of good prevailing wage green solar jobs. We all want to see an increase in California’s renewable energy infrastructure, but it shouldn’t be built on the backs of California’s working families.

Fixed costs in the utility system, such as maintaining infrastructure, are designed to be shared by all ratepayers equitably.

Opponents would have you believe this legislation is all about utility company profits, when in actuality, it’s focused on equity by lowering bills for the majority of California ratepayers who are currently subsidizing the solar rooftops of a wealthy few.

Under the existing system, customers in California with rooftop solar are disproportionately wealthier. But the solar rooftops of these wealthy customers are subsidized, and it is customers without rooftop solar, who are disproportionately lower income and in communities of color, that are stuck picking up their tab.

Here is how it works under the current utility system. Fixed costs in the utility system, such as maintaining infrastructure, are designed to be shared by all ratepayers equitably.

Unfortunately for nine out of ten ratepayers, including those at the lower end of the economic ladder, when wealthier rooftop solar customers’ bills are reduced through lower energy usage and compensation for the energy they sell back to the grid, they are able to avoid those fixed costs, which then are shifted to customers who don’t have solar. CARE Customers, those at the bottom of the economic ladder, have seen a 13 percent increase in their utility bills according to the California Public Utilities Commission (CPUC). That cost shift amounts to around a $3 billion dollar tab that the rest of us have to pick up.

Wealthy customers get compensated for the energy they sell back to the grid at a rate significantly higher than the actual value of their solar energy. In fact, the Natural Resources Defense Council has estimated that rooftop solar customers are compensated for their exported energy at a rate 3-6 times higher than the value of their solar. When compared to the value of renewable energy a utility would purchase from other sources, this is as much as eight times higher.

The CPUC has known about this cost shift problem for more than seven years, but have failed to take any action. AB 1139 creates a trigger to push the CPUC into finally taking action to set up a rate structure that doesn’t unfairly continue to shift costs on to non-solar customers. This will save ratepayers of all classes hundreds of dollars per year and it’s important to note that note a dime of these savings goers back to the utility companies.

There is no question that rooftop solar is on the rise. But as more households move to solar, the cost-shift will continue to escalate, resulting in higher and higher utility bills for non-solar customers.

Those customers without rooftop solar are disproportionately low income, and in communities of color, meaning the cost-shift disproportionately impacts and raises costs for low-income communities of color.

Electrical workers are also concerned that as we make the transition to a green economy, we do so in a way that does not create more inequities. We want to make sure this transition promotes equitable access and good paying jobs.

In addition to ensuring the rate structure does not continue to perpetuate inequities in who benefits from solar, AB 1139 also ensures that future rooftop solar installations are subject to prevailing wage to ensure green jobs are good jobs.

The author of AB 1139 recently noted that in her district, non-solar ratepayers (99% of her district) pay over $200 a year to subsidize solar rooftop customers. “Any way you look at that,” she said, “It’s wrong and regressive. You can be an environmentalist and still disagree with this cost shift.”

We agree. We can have future with rooftop solar in California that does not force working class families to subsidize it.

Editor’s Note: Bob Dean is the Business Manager for the International Brotherhood of Electrical Workers (IBEW) 1245.

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