![]() ![]() “But rooftop generation is closer to where the power is used so it saves on distribution costs.” Except, the most credible estimates of those savings are tiny compared to the cost difference.) ![]() And, the real alternative crowded out by new rooftop solar going forward is new large-scale solar and wind, which also produces no CO2. It should be far higher.” California has a very clean grid these days, so even doubling the cost of CO2 to $100/ton barely adds another cent to the societal value. (“But the cost of CO2 emissions in your analysis is only $50/ton. It’s installing more large-scale wind and solar plants, which are 3-5 times cheaper according to the latest Lazard independent analysis. In fact, that number overstates the benefits of putting solar on rooftops, because the primary alternative these days isn’t burning more fossil fuels. “That 7-9 cent utility savings calculation doesn’t account for the societal benefit from rooftop solar power being clean and local, and displacing conventional generation that burns fossil fuels.” Actually, the calculation does account for reduced pollution, using recent estimates of the damage from both criteria pollutants and greenhouse gases.“But wait,” comes the voice of a residential solar advocate, “it’s more complicated than that.” And then comes a checklist of reasons why maybe it’s not a cost shift onto the poor after all. ![]() So, when a customer installs solar, their share of the fixed costs are shifted to other ratepayers who are poorer on average. It has been well documented – and surprises no one – that households with solar are disproportionately wealthy (as well as disproportionately white). The extra 10-20 cents are avoided by that household, but those fixed costs still have to be paid. (Studies that reach similar conclusions here, here, and here - none paid for by entities with a financial stake in the answer). When a household installs solar in the service areas of the three California investor-owned utilities (PG&E, SCE and SDG&E), the customer saves 20-30 cents for every kilowatt-hour their system produces, but the utility costs only go down by 7-9 cents. These include most transmission and distribution costs, wildfire mitigation (think cutting trees and bushes around power lines), compensating past victims of wildfires, paying for energy efficiency programs, subsidizing electricity for low-income customers, and making early investments in new renewable technologies to help them get a foothold. The retail prices are so high, because they are paying for massive fixed costs, expenses that don’t decline when a household exports solar power to the grid. And it’s getting sweeter every year as our electricity prices rise.Īs numerous EI blogs and research have pointed out, however, California retail prices are 2-3 times higher than the actual cost avoided when a rooftop system pumps kilowatts into the grid. With residential prices about double any other western state, that means California regulators offer a sweet deal to solar households. Since the 1990s, customers have been paid nearly the full retail price for electricity they export to the grid. ![]() It really is that simple.Ĭalifornia regulators and legislators are diving back into Net Energy Metering (NEM) policies, debating how much customers with their own solar systems should receive for producing electricity. California’s distributed solar policy hurts the poor. ![]()
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