When Governor Jerry Brown delivered his State of the State address last week, he pointed to renewable energy policy as one of the Legislature’s great accomplishments of the last few years.
The Governor is right. Solar energy is one of California’s biggest success stories. Homes, schools and businesses are going solar in record numbers. The growing industry now employs 43,000 Californians and has infused $10 billion in private investment into our otherwise limping economy.
Yet California’s investor-owned utilities are quietly gearing up for battle against rooftop solar, using fuzzy math to distort the impact of the program that is the backbone of our state’s solar energy boom. The interests of a few monopoly utilities should not outshine the rest of us.
In 2006, the California Public Utilities Commission (CPUC) and the Legislature devised a plan to transform the California solar market. The idea: a one-shot rebate program to build a self-sustaining rooftop solar market with incentives that decline as the industry grows and brings down costs. Central to the plan was a program called net metering that would allow customers investing in solar to get fair credit for clean power they’re generating for others to use.
And it worked. Earlier this month, officials announced that the state’s California Solar Initiative hit a milestone, with more than 1,000 megawatts (or two conventional power plants-worth) of solar-projects installed on rooftops. State rebates have come down 95 percent and are on the cusp of going away entirely. The market is thriving. We have our state’s policy makers to thank for an effective program that is creating a real energy revolution.
But just as California’s grid is beginning to truly transform, here comes the backlash. Rooftop solar is under attack like never before by the state’s investor-owned utilities.
Why would your utility oppose customers going solar? Utilities make money by getting a guaranteed rate of return on the infrastructure they build, such as transmission lines or power plants, using ratepayers’ money. Building more infrastructure is better for their bottom-line. Rooftop solar reduces the need to add power plants. It’s good for our electricity grid, but it upsets the status quo that has boosted utilities’ revenues for so long.
The utilities criticize net metered rooftop solar by claiming that consumers who install the systems “shift” the costs of running the grid to other utility customers, thereby raising their rates. But this view leaves out one big piece of the cost-benefit equation: namely, the benefits.
The Vote Solar Initiative commissioned a study to take a balanced look at the issue. The results show that net metered rooftop solar will provide $90 million in annual net benefits to non-solar ratepayers. And that’s before you account for the economic, climate and public health benefits of more solar power.
The ratepayer benefits are savings on expensive and polluting conventional power; reduced investments in expensive infrastructure (paid for by you, remember); reduced electricity lost during long-distance transportation over power lines (rooftop solar’s surplus energy is sent directly to neighboring homes and buildings); and savings on the cost of meeting carbon reduction and renewable energy requirements.
Investor-owned utilities are given a monopoly in return for serving the public. Every utility in the state makes a profit, yet not one has an energy plan sufficient to deal with climate change. They should be doing all they can to help, not hinder, anyone who wants to use their own money install a 100 percent clean, renewable energy system.
California’s investor-owned utilities receive about $25 billion annual revenue from ratepayers. In their world, the benefits and costs of rooftop solar are close to spare change. But in the face of impending climate catastrophe, a thriving rooftop solar industry is priceless.