But critics insist the costs of those solar panels are beginning to outweigh the benefits.
Incentive payments to homes with solar, they say, have led to higher electricity rates for everyone else — including families that can’t afford rooftop panels. If so, that’s not only unfair, it’s damaging to the state’s climate progress. Higher electricity rates make it less likely that people will drive electric cars and install electric heat pumps in their homes — crucial climate solutions.
The solar industry disputes the argument that solar incentive payments are driving up rates, as do many environmental activists. But Newsom’s appointees to the Public Utilities Commission are convinced, as they made clear Thursday.
“We need to reach our [climate] goals as fast as we can,” said Alice Reynolds, the commission’s president. “But we also need to be extremely thoughtful about how we reach our climate change goals in the most cost-effective manner.”
When I am having a stroke, I don’t stop and calculate of the most cost effective treatment options. I go to the emergency room. We could have done this calculation in 1970 and acted, but that ship has sailed.
Sounds more like the electric company doesn’t like cheap energy. Gotta maximize that profit!
California should eminent domain PG&E, SCE, etc., and run the whole system as a public service.
Sure seems to me that the California Utilities Commission is serving the big utility corporations at the expense of people wanting rooftop solar, and at the expense of our renewable energy future. Solar is cutting into their profits.
This would all be so much simpler if power wasn’t a private company.
Sacramento has SMUD, which is so much better than PG&E that it’s actually kinda hard to believe.
The article doesn’t explain this, so I will. Anyone with solar panels who is still tied to the grid is still reliant on the grid. Any time they are not actively generating, they are pulling from the grid. Electricity costs are only partially generation; much of the cost is distribution infrastructure. People with enough solar to run their electric meter at a net negative are not paying their share of that infrastructure, and that cost goes to anyone else. People with solar panels are wealthier than those without due to the fact that you have to own a home to take advantage. Essentially, home solar subsidies are a wealth transfer from the poor to the rich. There are more equitable ways to make climate goals. It’s the same problem with subsidizing electric cars.
i have three costs on my bill:
- generation
- distribution
- tax
rooftop solar should only reduce the first line
I agree. I have solar, in NH. I did not ever expect to get a $0 monthly bill, as I thought the ‘customer charge’ would never be covered by excess generation. But in our NEM plan, it is. As are delivery charges - because delivery charges are based on kWh consumed.
But you know what, I’ll take it as it is. Because I get paid $0.25 on the dollar of what I generate on the roof. Indeed, for every four kWh I generate, I am paid for one.
But in NH … We have essentially no state subsidies for solar. There sa $1000 max incentive. And it’s a lottery as we don’t generate enough tax revenue to give it to everyone that installs solar.
May I also just say I firmly believe all electric utilities should be public, not private. I’m very insensitive to the suffering of the profits of private utilities that drag their feet approving interconnection applications and defer maintence of their grid while also holding tax payers hostage during emergencies.
live free or die
That infrastructure would already have to be there without the solar panels on the roof. The electric company also gets excess power generated by the home sold to it at a discount.
You’d think so, but companies like PG&E have spent the past 50 years not maintaining their infrastructure. As a result, they’re not equipped to handle multi-input supply efficiently, and are now having to add a bunch of expensive equipment to their network where they’ve spent the past 50 years getting subsidies that went into management bonuses instead of building out the grid.
It’s not like they didn’t know this was coming; the 1970s were the start of the solar revolution, and the incumbents have fought it every step of the way, for years refusing to take excess energy into the grid because they weren’t set up for it. But when the government responded with “why not? What have you been doing with the money we’ve been giving you to do precisely that?” they grudgingly complied and demanded more money.
So this is all about the downsides of privatization, just like all the fires caused by unmaintained electrical equipment.
That infrastructure would already have to be there without the solar panels on the roof
Exactly, that’s the whole problem. Maintenance of that connection costs money, and unless you have large amounts of battery storage, you are still using power generated by the electric company.
The electric company also gets excess power generated by the home sold to it at a discount.
Often, this is not the case at all. If 50% of electricity costs are generation, but someone’s solar panels run the meter backward, the electric company is basically paying that homeowner double the going rate.
How does the billing work over there? Here in NZ, we pay a line charge and a unit rate, and power companies will buy power from rooftop solar at a lower rate than what they sell it for.
The buy price is typically half what they sell for.
Billing, in my experience, is predominantly based on usage. For each kWh of use, you get charged x% for generation, y% for distribution, and z% for tax. I’m sure some providers do use a flat charge for some things. Originally, electric meters were pretty dumb and analog, so they could only track net electricity through the meter. Lots of companies have rolled out smarter meters that can track how much is sold back to the grid so they can adjust the price accordingly. I think loads of places still have the older style of meter; I know I do. Companies basically have to weigh the costs of replacing all the meters with the benefits of that extra bit of money.
Asking the right questions over here. This is pretty clearly a billing method problem - mixing infrastructure maintenance charges in with electrical generation charges so that people who use more electricity pay more for infrastructure maintenance, which seemed like a fair way of doing things in a time before cheap, decentralized power generation.
I’m no industry expert, but it seems like maintenance costs are tied to the potential to deliver electricity rather than the actual delivery - systems need to be sized for peak load. So a fix for the billing problem might be to remove the cost of maintenance from the cost of generation, adding a line item to customer’s bills to cover infrastructure maintenance, and for the size of that charge to be proportional to the potential peak load that customer places on the grid rather than their actual usage.
That’s basically what this ruling is trying to accomplish if you read what they actually said. The way it works right now is like if you could grow a bunch of tomatoes over the summer and drop your extra off at the grocery store, and then when the winter comes around, you just went and grabbed the same amount off their shelves. It’s disregarding the fact that tomatoes cost more in the winter cause they have to be imported or hothouse grown.
Every form of generation has a cost per kwh generated and a startup time. It’s pretty much an inverse relationship. Fastest (and probably most expensive) is probably discharging batteries, slowest is probably nuclear. Things like solar and wind, you just get when you get, so in order to provide uniform service, they need to be coupled with something that can relatively quickly provide energy on demand, which unfortunately means gas, typically.
This new ruling is basically trying to incentivize people to use more of the solar power they generate, which reduces the amount of on-demand energy generation necessary. There’s a lot of untapped potential for how we can adjust time of use, and that’s going to be a big part of adjusting to a more renewables-based energy system. For example, water heaters that only run when there is excess power (they hold heat for a long time), hvac that overshoots your desired temperature rather than running 24/7 to ping-pong around a set point by a degree, and appliances that can be timed.
This particular proposal is trying to end the mandate for the utility to purchase electricity from rooftop solar owners at times when there is no demand for it and no existing infrastructure for storing it.
To cover the expense of having purchased goods they can’t sell, the utility needs to increase their rates, and that cost increase hits people who don’t own solar panels harder than it hits those who do. That makes installing solar panels more financially appealing to people who can afford them, but it also increases costs for the people least able to pay.
And it seems like the utilities are pretty attached to the idea of keeping maintenance fees proportional to actual usage. If I’m reading the article correctly, there was an earlier proposal to require rooftop solar owners to sell 100% of what they produce, and buy 100% of what they use, presumably with a % surcharge for maintenance attached to the purchase. Assuming the utility would pay the current market rate for solar power at the time it was produced, it could be a fair system that would adjust itself automatically based on market forces so the government would not need to update pricing regulations every time a new gas or nuke plant is added to the grid.
Circling back around to the initial point though, we wouldn’t have this problem if more storage infrastructure were built, allowing the utilities to sell the solar power they’re currently mandated to buy. I suspect that energy storage via home appliance usage patterns will only cover part of our storage needs.
When the electricity my panels generate deliver electricity to my neighbors they charge my neighbor for transmission even though the transmission didn’t exist.
How does the power from your panels get to your neighbors if not over the grid?
Generally when people refer to the grid they’re talking about things like high voltage power lines or at least going through transformers. My block has a transformer at the end of it which means my whole street is on 240vac. If I send power to my neighbor the only infrastructure that is being used are those low power lines. They don’t wear out or degrade from me sending power from my house to them. In fact I save all the use of going through a bunch of transformers and long distance. In fact almost all infrastructure degrades due to age not usage. So a more equitable fee would be hey this is our operating cost for the grid per person you get charged per month. But no ca wants that fee plus a fee for transmission which is just double dipping and clearly a way to make more money off the monopolized customer base.
Isn’t there typically a flat rate to cover the costs of hooking up to infrastructure?
I’ve never had to hook up a new place to infrastructure (though I did have to price it out once before deciding it wasn’t worth it), but yeah, it’ll just be a flat cost.
To steal a metaphor from my other comment, though, the way it works right now is like if you could grow a bunch of tomatoes over the summer and drop your extra off at the grocery store, and then when the winter comes around, you just went and grabbed the same amount off their shelves. It’s disregarding the fact that tomatoes cost more in the winter cause they have to be imported or hothouse grown.
To continue the metaphor, though, they would need to pay an employee to check all your tomatoes to make sure they were safe to eat and up to standards, and make sure there aren’t pests hitching a ride that would destroy their own tomatoes. This is made a little more complicated by the fact that grocery stores can and do charge more for those tomatoes during the winter, but power companies usually have to offer a flat rate. What they are trying to do now is price all of that in, so instead of getting the year-round on-the-shelf price, you’d get the summer wholesale price. At that point, you’d decide if you still want to sell your tomatoes, or you could start canning.
So based on my energy bill, “green” energy actually costs more than fossil fuel produced energy, so based on that your analogy is flipped - you are giving them the more expensive tomatoes.
Additionally, electric bills in all places I’ve lived in include a flat monthly fee that they charge just to connect to the grid. This pays for the employees you’re mentioning.
I’ve never been in a place where you can actually use net metering all the way to a zero dollar electricity bill, unless you’re selling more power to the electricity company than you use, and they give you enough of a credit to cover the monthly flat fees.
Every dollar the state spends on subsidizing private individuals’ renewable energy projects is a dollar the state can’t spend on public, at-scale renewal energy projects.
I don’t understand. What’s the difference? One one hand, energy production is distributed and on the other it’s centralized.
What I mean is, if eveyone had solar then we would have a “public, at-scale renewable energy project”
Decentralized power generation can be good for redundancy/resilency/off-the-grid purposes, but if you want the highest efficiency, you need large scale, centrally engineered not-for-profit projects.
You only need high efficiency if your energy source costs money.
When your energy source falls out of the sky every damn day, efficiency is irrelevant.
Yes as we all know it is free to build solar panels. It is free to write the software to control the solar panel. It is free to wire the solar panels to the grid and solar panels and all supporting hardware last forever.
And since all of this is 100% free, there is also absolutely no difference in the energy collected or the amount of materials used between 10,000 contractors slapping down some solar panels in dubious configurations as quickly as possible so they can get their subsidized installation fees, versus a centralized public project designed to minimize transmission losses, material waste, and maximize longevity and light energy collection.
Yes, yes, those are all very good points.
Another very good point is “taxes”.
A centralized project necessarily involves regular (monthly) transactions between a seller and a buyer. That involves metering expenses. Accounting. Billing. Collections when some of your customers don’t pay their bills. Losses, when collections don’t work. A legal department. The liability associated with having deep pockets in a litigious society. Inflation: your costs are going to be rising on a regular basis to keep up with it. Managers and supervisors. An HR department. A CEO, board of directors. Shareholders.
And, of course, every kWh you sell is taxed by the government, every bill, every month. That just isn’t true of a personally-owned solar panel.
You have a wide variety of continuing operational expenses associated with all those transactions you have to conduct between your centralized project and the customer. Those made sense with fossil fuel generation: a small, household generator has a high fuel bill. A central facility can buy fuel cheaper, and their larger engines are more economical. That margin leaves a lot of room to fund the additional overhead needed to sell power to the consumer.
But, if he has free fuel available (virtually nil operating costs) at home, all those efficiency gains are irrelevant: he can still be cheaper while being less efficient.
Save the centralized projects for things that rooftop solar can’t do: distribution, storage, etc.
the cost argument is silly
According to the op-ed
Those groups make the case that large solar farms produce electricity at a far lower cost than rooftop panels.
Which is kind of short on details. Googling, I see:
2019 non-partisan estimates put the midpoint unsubsidised levelised cost for residential rooftop solar at 20¢/kWh, for commercial/industrial rooftop solar at 11¢/kWh, and for grid-scale solar at 4¢/kWh. That’s a big gap.
As the author says, that’s a big gap.
what’s the value of single point of failure?
16c/kWh?
I think they should move to subsidising home batteries instead, just to smooth out the peaks and troughs that come with renewables. If you do that, and add some smarts to electric car chargers you’d be able to remove the need for fossil powered peaker plants. Solar is generating more than can be used on some days, and we need to focus on time shifting load and generation when possible.
In theory you’re not wrong. The problems with this in practice are several, which I won’t go into, except to say that it’s a very American/individualistic/neoliberal solution to what is a collective problem.
I’ll add that I’m not universally against installing small projects. It has its uses. Given federal dollars I think it’s fine to have such projects in the mix, just not as the bulk of the infrastructure.
If we just called them freedom panels adoption would be so much faster. Then if everyone had panels it would be decentralized.
USA! USA! USA!
Here in the uk we stopped subsidising private green energy a while ago, and it’s still worthwhile to install solar - we pay our energy supplier (one of a few privatised options) for the connection and infrastructure, and any power we use, and they pay us for the power we put back into the grid. Essentially, a portion of the money we earn from our power is kept by the utility company to cover infrastructure maintenance, and we still make money. I very much doubt that the base power generation or infrastructure costs in the us are so much higher as to stop it making money for homeowners without subsidies, unless (as I’d imagine) the local power generation is a monopoly, and they’re just trying to protect their profits. Solar became cheap enough to be genuinely profitable without subsidies here a few years back.
Did I miss the bit where they say how much roof top solar subsidies are increasing electricity rates? If it’s one of two percent, that seems like it could be okay. If it’s twenty or fifty percent, then maybe it’s time to rethink.
According to a quick Google, distribution of electric, basically keeping the grid going, is 40% of the average cost. For anyone who makes enough solar to make their meter net 0, they aren’t paying that 40%, so it gets distributed to anyone too poor to afford a house and solar panels
If roof top solar is so essential then just make it mandatory. Stop fiddling with market incentives or, better yet, built more state run nuclear.
Incentive payments to homes with solar, they say, have led to higher electricity rates for everyone else — including families that can’t afford rooftop panels.
If they can’t afford rooftop panels, but can afford traditional generation, the rates aren’t yet high enough.
They can’t afford any of it. Two points.
Point A) Renters. They’re renting. The new change will…
… make solar panels less economically enticing for apartment dwellers, farmers, schools and strip malls, solar companies say.
– there were harsher proposals, but this is a mid-way kinda where renters will get something but not as much as others.
renters will be paid much less than they are today for electricity generated by their rooftop panels above and beyond what they and their neighbors use — electricity that is sent to the larger power grid, helping the rest of us keep the lights on.
Point B) They’ve made it pointless for schools and farms:
other utility customers affected by the decision — including schools and farms — will still have to pay full retail rates for all the electricity they consume. Even if they install solar panels that cover some of their consumption, they’ll have to pay their utility for power during times of day when their panels are generating.
Under the new rules, “schools will not be permitted to generate their own power any longer. Instead, they’ll be forced to buy their own solar back from utilities at full price,” said Sasha Horwitz, a legislative advocate at the Los Angeles Unified School District.
so what benefit is there to install solar for multi family homes and schools?
You can pat yourself on the back? The article is about how the new rules make it hard for such groups to justify the cost of installing solar when the benefits look thin and potentially changeable.
You still get SOME money for adding power to the grid, but you’re basically getting paid a ‘wholesale’-like price and paying out the retail mark-up. I’m not sure how California’s grid works, but where I am, we have “line fees” for maintaining the infrastructure to cover that sort of thing.
Ohio has separated “generation” and “distribution”. You don’t have a choice on the heavily regulated distributor, but you can pick which generator is going to get your money.
So, you’d like to see a world where people either install rooftop solar, regardless of practicality, or just don’t have power?
