California has big energy problems.
We are persistently saddled with energy prices that are among the highest in the nation.
Wildfires, snow storms, severe winds, and earthquakes can knock out the power grid creating serious reliability issues.
The Golden State’s move to less fossil fuel creates energy shortages on extremely hot, cloudy and windless days that undermine solar and wind power generation.
And, to top it off, much of the current solar power incentives put in place forces those that are neither poor or solid middle class to subsidize the power bills of those that can afford to take advantage of tax breaks. It also effectively forces power providers such as PG&E to impose higher rates on non-solar customers at the benefit of rooftop solar customers.
The California Public Utility Commission has a proposed solution that is before them on Jan. 27 to address all of that.
And they are being hammered for doing so.
The proposal not only removes inequities going forward in net energy metering but it offers incentives for new and existing owners of rooftop solar to add battery storage.
Californians could become significantly less susceptible to energy shortfalls and reliability issues due to weather and disasters and move toward more stable power costs under the proposal.
The backlash ironically from a subsidized private sector — the solar panel and installing industry — paints it as the equivalent of environmental genocide somehow lining the pockets of PG&E. Yet if they simply adapted and invested in new technology the solar industry could ride yet another wave of subsided prosperity while those opting to install roof-top solar systems can benefit without directly financially hurting their non-solar neighbors.
Capitalism is messy but government monkeying in the marketplace is convoluted.
Using market manipulation to achieve strategic goals isn’t necessarily a bad thing. But it is if those benefiting from it become so entrenched that they impede efforts to advance critical goals for the common good.
The solar industry sees the pending CPUC decision as an unjust attack on those seeking independence from high energy costs and undermines California’s target for 100 percent clean energy by 2040.
In reality it advances both goals. And at the same time it addresses inequities in net energy metering for rooftop solar going forward with new installations while at the same time making the process fairer to all involved.
The solar industry in California, without a doubt, has a business plan driven by government subsidies both on the back of taxpayers as well as ratepayers that do not have solar installations. In that aspect they should be viewed with a jaded eye much like one would PG&E. They are driven by profits and not necessarily the greater public good. In other words, they do not occupy any higher moral ground in the debate regarding the CPUC proposal than PG&E.
The people at the table with overall consumer interests at heart — TURN (The Utility Reform Network) of which former South San Joaquin Irrigation District executive directive Jeff Shields serves as treasurer — have the most valid argument.
The TURN argument is the current rooftop solar scheme imposed years ago by the state to spur more clean power production unfairly has shifted costs to non-solar customers effectively subsidizing solar customers while keeping utilities such as PG&E whole and without dinging their profits. It should be added that solar components are much less expensive today than they were 20 years ago.
Under the current rules that solar companies have prospered under, rooftop solar customers do not pay their fair share toward the cost of maintaining and operating power infrastructure such as wires, poles, transformers and substations. All of that is needed for utilities mandated to buy excess electricity from rooftop installation owners and sell it back to them at a lower cost when they need it.
The existing incentives pay rooftop solar owners 25 cents per kilowatt hour for power they send to the grid during peak production hours when they have excess production. And when power is needed at night or when their solar is not producing, it is sold back to roof-top solar owned at 6 cents a kilowatt hour.
Non-solar PG&E customers for first tier usage — the so-called lifeline portion of electrical rates — are charged 15.8 cents per kilowatt hour in the summer and 11.1 cents per kilowatt hour in the winter. And when they reach the second tier that the bulk of PG&E’s 16 million customers do they pay 26.071 cents a kilowatt hour.
Going forward with new installations, the proposed CPUC decision still offers incentives especially coupled with storage while those installing the system still realize lower power bills. But it is based on the true retail value of electricity and not artificially — and significantly — deflated prices.
It also adds the bonus where systems can be over designed to 150 percent of a residential customer’s electrical needs to allow for the future addition of home charging of electric vehicles or the conversion of appliances and/or heating-cooling systems to electricity.
As for accessing the wire, poles, transformers and substations that are essential for the solar rooftop program to work, the CPUC envisions an $8 per kilowatt monthly charge for roof-top residential systems. For typical rooftop systems of 5 to 6 kilowatt hours, the charge would come to $40 to $48. Compare that to the nearly $100 a month a non-solar power customer of utilities such as PG&E pays for grid access based on CPUC calculations.
The incentives for new rooftop solar systems to have battery storage components as well as to allow owners of existing rooftop systems to add storage will help those with solar to not only have more reliable power sources but also lock in lower power costs over the long haul. That is accomplished between some incentives still in place and having foundational generation costs that are relatively flat based on paying off solar installations over the course of years.
If rooftop solar system owners don’t like the idea of more realistic retail power pricing being used to determine their savings or somehow think it is an affront to be charged for the “wear and tear” for the handling of the power they are sending to PG&E and other utility providers places on the grid, they can also go for a 100 percent self-contained solar power system with ample storage.
That way they eliminate PG&E and don’t have to worry about the government making sure they are not being subsidized by non-solar neighbors when it comes to monthly power billings regarding their taxpayer subsidized rooftop solar system.