California’s ‘solar rooftop Hunger Games’ goes to regulators Thursday

Will the solar energy industry plunge off a cliff and die a horrible death? Will utility companies protect their obscene profits? Will the vast majority of folks without rooftop solar panels keep paying more to underwrite their wealthier neighbors’ green power?

Hyperbole is in full swing — and the fate of the world we know it may hang in the balance! — as the California Public Utilities Commission takes another stab at how rooftop solar will work. That’s a vital question as the Golden State hurtles headlong toward a 100% renewable energy goal.

The PUC meets at 11 a.m. Thursday, Dec. 15, to battle over a revamp to what’s officially known as “Net Energy Metering” — changes to how solar owners are billed and credited. This latest proposal comes a year after the first, doomed plan tanked spectacularly (it proposed a monthly charge of about $50 to cover fixed costs like grid upkeep and fire suppression, sparking outrage over a “solar tax”), and still offers everyone something to hate.

The meeting streams at www.adminmonitor.com/ca/cpuc. Read the proposal under consideration at bit.ly/3HxaSlm.

This new version would change how much new rooftop solar owners get paid for exporting energy to the grid, depending on how much solar energy is available at the time. But it would not affect existing rooftop solar owners, who’ll remain on their current tariff plans for 20 years after their systems hooked into the grid.

Going forward, folks who install new systems with batteries to store solar power, and who can pump energy into the grid after dark when it’s most needed, would get the most handsome compensation. Folks without batteries, who only pump excess energy to the grid during the day — when it’s already plentiful — would get less compensation.

The idea is to push folks toward storage. That’s because solar owners without batteries pull energy from the grid at night, just like everyone else, requiring utilities to crank up fossil fuel-powered plants.

‘Solar rooftop Hunger Games’

During the day, when solar energy is plentiful, it has a value of some 5 cents per kilowatt hour, the utilities say.

But, thanks to California’s decades-old effort to juice solar’s adoption, rooftop panel owners get four to five times that much in credits for pumping energy to the grid. Everyone else pays for that, critics say.

“The new (proposed decision) recognizes that solar customers receive compensation many times higher than the value they deliver to the grid, that this excess compensation causes a large cost shift onto households without solar, and that those solar-less residents are disproportionately poorer than solar adopters,” writes Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business (who’s also on the Board of Governors of the California Independent System Operator, which runs the grid).

“Yes, some lucky low-income households benefit from targeted solar incentives, but the vast majority won’t have solar for a decade, if ever. So their rates will pay for all of the solar subsidies, a kind of solar rooftop Hunger Games.”

Ouch! The new proposal keeps that system in place for current owners, but would be less generous to new solar owners. Still, Borenstein says, “The state is simply putting its thumb on the scale for solar on rooftop.”

More than $4 billion in costs was borne by non-solar customers in 2021, according to the PUC and the utilities. Please keep in mind that the whole reason we’re even having this exercise because a 2013 law required the PUC to address the cost shift from solar to non-solar households.

‘Your motives are obvious’

Fans of the current system — including the companies that make, sell and install solar systems, and people who own them — argue that cost shift doesn’t really exist. Solar has saved the state billions, they say.

They’ve launched an ad blitz in newspapers and on social media attacking California’s major utilities and asserting that the PUC is simply doing their bidding, trying to protect obscene utility profits from rooftop solar’s threat to their bottom line.

“We see through your deceptive attacks on rooftop solar,” says a full-page ad addressed to the utility CEOs. “We know big utilities are threatened by competition from rooftop solar and batteries. Your motives are obvious. You want to protect your monopolies and profits from more people going solar.”

EnergySage, a sort of Thumbtack/TaskRabbit/Lending Tree marketplace for solar systems, said that the payback period for folks installing solar only would increase from 6 to 7 years to 10 years, and their 20-year savings would decrease by 60-64% compared to the current system.

That’s a $33,000-$40,000 loss in savings, depending on the utility company, which would make installing a solar-only system far less attractive financially for most people, it said.

Neutral observer

But that, we think, is the point. Batteries, people.

We turn now to the Public Advocates Office, that quasi-autonomous branch of the PUC “created to fight for what is best for California consumers.” We think of it as an in-house Solomon-the-Wise, though folks who want to leave the system as is say it’s in the utilities’ pocket just as much as the PUC is.

The Public Advocates Office wants the PUC to embrace this new proposal, but with changes.

“(I)t is a critical step in the right direction to modernize our flagship rooftop solar program and reduce its cost burdens on non-participants,” a statement from the office said.

“The new structure encourages homeowners to install solar systems with batteries so they can support the grid even after the sun goes down. For instance, the price for electricity provided during the day — when sun power is bountiful — is about 5 cents per kilowatt-hour. During the evening, the price can increase more than 20-fold. With this advance, clean energy will displace more fossil fuels during evening hours. It’s a move that puts us a step closer to California’s clean energy goals.”