Blistering rooftop solar debate reopened by California regulators

Article Republished By Javier Troconis

And the PUC said, “Let there be (a tiny bit more) light,” and it was, for many, not so good.

After clamming up for nearly five months, California’s all-powerful utility regulator took the unusual step Monday of reopening the highly contentious battle — um, we mean, “proceeding” — over rooftop solar electricity rates. Rather than throwing out the proposed decision detested by so many rooftop solar owners — which would dramatically hike their monthly kick-in for system upkeep, and dramatically shrink their earnings for sending excess energy to the grid — the administrative law judge overseeing this contentious exercise asked folks to weigh in on how changes might be eased in more gradually.

Comments addressing very specific questions — off-topic rants will be duly ignored, the judge warned — are due no later than June 10, and reply comments are due no later than June 24. That means rooftop solar rates — aka “net energy metering” — won’t be on a Public Utilities Commission agenda until July, at the earliest.

The judge’s questions are quite technical, but center on how to introduce steady reductions in the credit rooftop solar owners get for the energy they export, as well as thoughts on overall consumption charges (which critics say essentially taxes people for the power produced on their own roofs). Should adjustments to exported power’s value apply differently to solar systems with batteries and those without? Should changes target a certain payback period for solar owners, or a certain level of bill savings, or some other metric? Should changes apply to businesses as well as residential customers, and how much time should it take to phase changes in?

Power transmission lines in Orange on Friday, February 19, 2021. (Photo by Mark Rightmire, Orange County Register/SCNG)

Folks can submit comments by visiting the proceeding’s Docket Card.

The problem the PUC’s largely detested proposal aims to address — that non-solar customers pay an extra $20 or so a month to subsidize their solar neighbors — remains at the heart of the proceeding, to the chagrin of critics.

The intent of reopening the record, officials said, is to ensure that the solar industry can continue to grow sustainably, while also winding down generous credits for exported solar power that are no longer in line with what that power is actually worth. That’s the tight rope the Legislature has tasked the PUC with walking.

Of course, folks on all sides of the issue found something to hate.

‘Get this right’

“While we appreciate the Commission is taking time to try to get this right, the sooner they take action to fix the cost shift the better,” said Kathy Fairbanks, spokesperson for a coalition of reformers called Affordable Clean Energy for All, by email.

“By getting it right, we mean eliminating the unfair cost burden (the current system) imposes on non-solar customers who are disproportionately from disadvantaged communities. While we support the Commission carefully considering reform options, every single day that goes by without NEM reform imposes more cost burden on non-solar customers.”

That amounts to some $12 million per day, she said. Since the proposed decision was released in December, non-solar customers have paid $1.81 billion more than they should have to cover costs not paid by solar customers, she said.

Pigeons fly from their perch on power lines above Antelope Road south of Scott Road as the sun shines behind them in Murrieta on Wednesday, January 5, 2022. (Photo by Terry Pierson, The Press-Enterprise/SCNG)
Pigeons fly from their perch on power lines in Murrieta in January. (Photo by Terry Pierson, The Press-Enterprise/SCNG)

Folks who want things to remain exactly as they are — which probably includes most of the 1.3 million households with solar panels in California — reject that math entirely. Calculations showing a cost shift are based on accounting tricks, and the big utilities’ renewables (Goliath) are favored over rooftop solar (David), defenders of the current system say.

“The fact they are still considering a ‘solar tax’ is alarming,” said Dave Rosenfeld, executive director of the Solar Rights Alliance, by email. “Now we know for sure it is still on the table. What they are now contemplating is truly absurd. … This is just like taxing people for hang drying their clothing instead of running the clothes dryer.”

Laura Deehan, state director for the Environment California Research & Policy Center, was encouraged and discouraged at the same time.

“The commission’s line of questioning shows sincere effort to support rooftop solar adoption in the Golden State,” she said by email. “Seeking input on how to avoid a sudden cliff in payments to solar owners and how to expand access to solar through community solar projects shows interest in encouraging continued rooftop solar growth in California.

“I remain concerned that the commission is still open to a solar tax, which should be off the table. A solar tax is unjustified, unfair and threatens a crucial component of our state’s clean energy future. So-called ‘non-bypassable charges on gross consumption’ would mean charging customers based on the energy they create with the solar system they installed on their own roof. This is just another way to package up a solar tax. If we want more Californians to go solar, we should not make it harder or more expensive. Instead, we should be doing everything we can to make going solar easier.”

Solar energy advocates carry boxes of petitions against proposed reforms that they claim would handicap the rooftop solar market to the governor's office at the Capitol in Sacramento, Calif., Wednesday, Dec. 8, 2021. State regulators at the California Public Utilities Commission are expected to propose reforms that would lower the financial incentives for homeowners who install solar panels. (AP Photo/Rich Pedroncelli)
Rooftop solar advocates carry petitions against proposed reforms in Sacramento in December. (AP Photo/Rich Pedroncelli)

Get a battery

In these voluminous proceedings — now some two years old — officials and consultants have essentially said that generous subsidies meant to goose rooftop solar adoption in California have been wildly successful and need adjustment to reflect current market realities.

Solar power is now plentiful, and thus cheap, during the day. And until every solar installation is connected to a battery that can store power for use after the sun goes down, solar owners will continue to be as dependent on the grid as everyone else at night, and should kick in more for the grid’s upkeep.

Solar panel manufacturers and owners say changes would cripple the industry, extending how long it takes to recoup the cost of solar that people will stop installing systems altogether. The PUC is a puppet of the large utilities, critics charge, trying to protect utility profits from the threat rooftop solar presents.

Here’s what’s undisputed: Californians paid 25.59 cents per kilowatt-hour for electricity in February, nearly twice the national average (13.83 cents), according to data from the U.S. Energy Information Administration. That hurts.

Researchers attribute these painful prices to “uncommonly large fixed costs” that are bundled into kilowatt-hour prices, including energy generation, transmission and distribution; wildfire mitigation; efficiency programs; and “subsidies for houses with rooftop solar and low-income customers.”

California’s strategy for recovering these fixed costs must change, the researchers said.

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