Beginning next year, all new California homes must be constructed to have solar panels. This Mandate is expected to add $8,000 to $10,000 on the cost of a new home. Consumers considering buying a house in California may want to sit back for a few years to see how the ramifications of this new policy will play out. Make Solar Safe will continue updating consumers on new policy regarding renewable energy.
Why California’s new solar mandate could cost new homeowners up to an extra $10,000
By Trent Gillies
- California became the first state in the nation to make solar mandatory for new houses. Beginning in 2020, newly constructed homes must have solar panels, which could be costly for homeowners.
- The state estimates that the cost will be offset by savings on utility bills.
- Yet the added costs could hit “the affordable side of the market,” an expert told CNBC.
Starting next year, every new home built in California will have something extra on top.
Recently, California became the first state in the nation to make solar mandatory for new houses. Beginning in 2020, newly constructed homes must have solar panels, which could be costly for homeowners: According to California’s Energy Commission (CEC), that mandate will add between $8,000 and $10,000 to the cost of a new home.
CEC estimates suggest that the solar addition will increase the average monthly mortgage payment by $40, but new homeowners will save an average of $80 a month on their heating, cooling and lighting bills.
Still, the requirement does add a costly additional expense to already pricey new homes in one of the richest real estate markets in the country.
Danielle Hale, chief economist at Realtor.com, told CNBC’s “On the Money” that the new solar requirement could undermine a segment of the real estate market that’s struggled to add to new homes relative to demand.
The added costs could hit “the affordable side of the market,” she said, where prices on available homes have been under pressure.
“It’s a very different perspective depending on if you’re looking for affordable homes, or pricier homes,” Hale told CNBC. “It’s already difficult for builders to build, and I think this is just going to exacerbate that problem.”
Will other places follow suit?
Although the law begins next year, a Realtor.com study found 8 of the 10 U.S. cities with the highest percentage of home solar panels are already in California, and more than six percent of homes in San Jose feature solar panels. The second highest percentage is in Salinas with 4.8 percent, and San Diego is fourth with about 3.3 percent “green” homes.
Phoenix (#3) and Prescott (#5), both in Arizona, are the only cities outside of California in the top ten. So will other states follow California and add the solar requirement?
“We might see states or localities make those decisions,” Hale said. “I think it’s going to take a couple of years before people see how the ramifications play out and what it really does for building in California, before they decide if it’s a good idea to follow suit.”
It all depends on whether home owners directly affected by the changes will embrace them willingly. Sanjay Garje recently told CNBC that he’s buying a home currently under construction in Santa Clara, CA that will come with solar panels on his roof — one year ahead of the requirement.
“I almost got apprehensive about it because we live in a free society and somebody is telling me I have to have solar in the home, ” Garje said.
With his home nearing completion, Garje found that after doing the math, he estimates his monthly energy savings could reach $200. He said he now welcomes the rooftop solar installation, calling it “the icing on the cake.”
–CNBC’s Aditi Roy and Yasmin Khorram contributed to this report.
Countries all over the world are running into the same problems in their transition to go solar. Large scale solar power is being hindered by outdated power grids. The electrical grid was built with the intention of steady and predictable energy flow. The grid does not have the technology for distributing renewable energy. Causing a strain on the electrical grid and restricting large scale projects. Upgrades are needed in grid capacity before going green, which would last years and cost billions.
Dutch power grid struggling under influx of solar panels: report
By Janene Pieters
In some areas in the Netherlands the power grid is struggling to cope with the large number of new solar panels installed over the past few years, various Dutch newspapers report.
According to the Telegraaf, there is talk of “traffic jams” on the grid. In parts of Groningen, Drenthe and Overijssel, network operators Enexis and Tennet have to say “no” to the initiators of new large-scale projects, the Volkskrant and Financieele Dagblad report. According to FD, a lack of power cables is even standing in the way of the switch to green energy.
These problems don’t affect individuals much, as they can’t be refused if they apply to install solar panels on their home. But large-scale consumers and suppliers can be told no, which means that the dreams of investors who want to build solar parks on farmland and the green ambitions of football clubs are being shattered, the newspapers write.
The north and east of the country in particular are facing problems, because the land there is the cheapest and so desirable for investors, but these areas have the thinnest cables in the ground.
“Our electricity grid is not built for what we expect now”, a spokesperson for network operator Liander said, according to RTL Nieuws. Expanding the grid capacity to make room for solar power will take years and cost billions of euros.
Read more here.
Solar panels change the nature of fires regardless of if they are installed or in transit to be installed. They contain hazardous substances that release carcinogens when burned. Carcinogens are known to be capable of causing cancer and other health problems to those exposed. Make Solar Safe prioritizes educating consumers on hazards involving solar panels.
Forklift unloading solar panels in Polk County catches fire, does $2 million in damage
By Chip Skambis
BARTOW, Fla. – A forklift in use to unload and install solar panels in Polk County caught fire Sunday morning, causing an estimated $2 million in damages, firefighters said.
The diesel forklift caught fire around 7 a.m. off of Bonnie Mine Road just outside of Bartow. The fire spread quickly to the solar panels, firefighters said.
Because solar panels contain chemicals that emit carcinogens when burned, firefighters were fully packed out, using copious amounts of water to put it out.
Extinguishing the fire took more than four hours, firefighters said.
The firefighters then underwent a full decontamination to ensure they were not exposed to carcinogens.
Firefighters have not yet determined the cause of the fire.
The December trend of bad policy to create “affordable housing” will do the exact opposite in Nevada if officials choose to follow California’s green mandates on builders and homebuyers. Earlier this month, California made a law requiring all new homes be built with installed rooftop solar panels. Shortly after California announced that bill, the Environmental America Research & Policy Center, a nonprofit that promotes renewable energy, released a report urging Nevada to jump on board or it would be a “missed opportunity.” Unfortunately for Environmental America, going solar is already inexpensive and Nevadans are still uninterested. Environmental America is pushing their agenda, which has potential to take away consumer rights that choose to be non-solar. Make Solar Safe is against harmful energy policy that takeaway consumer rights.
Solar panel mandates for new Nevada homes would be an awful idea
Las Vegas Review-Journal
The issue of “affordable housing” is on the agenda of seemingly every Nevada political body, from the Legislature to various local boards. Here’s one easy step: Resist self-serving calls for the state to follow California and impose expensive new green mandates on builders and homebuyers.
Last week, the Environmental America Research &Policy Center, a left-wing nonprofit that promotes renewable energy, released a report implying that Nevada should require solar panels on all new home construction. “Building without solar panels at this point,” said Bret Fanshaw, the group’s Go Solar campaign director, “is a missed opportunity.”
Not surprisingly, California recently became the first state to issue such a directive, which will add about $9,500 to the cost of the average home. Proponents claim the panels will save Golden State homeowners an average of $19,000 in energy and related costs over 30 years.
“I’m sure there would be plenty of homeowners excited about this,” Mr. Fanshaw told the Review-Journal. “If you’re streamlining this process, you can reduce cost in the industry and hopefully pass it along to the consumer.”
In Mr. Fanshaw’s parlance, “streamlining the process” apparently means imposing strict mandates on the market. And to those homebuyers who might prefer lower upfront costs to theoretical savings spread over three decades? Well, Mr. Fanshaw and his colleagues at Environmental America know best.
In fact, this proposal makes no sense on myriad levels.
First, the idea of Nevada importing housing policy from a state that has become a national basket case in that area is laughable, to say the least. Second, if homeowners are so excited about solar panels, they are currently free to have them installed. The fact that Mr. Fanshaw and Environmental America prefer to advance their policy goals through the heavy hand of state compulsion rather than consumer choice is quite telling. Finally, larger-scale community solar projects, by most accounts, are much more cost-efficient than rooftop solar, which survives only through “net-metering” subsidies.
If Nevada and Las Vegas officials hope to keep home prices affordable, why on earth would they seek to mimic California and potentially price thousands of residents out of a home? If the folks at Environmental America believe there is a “missed opportunity” in Nevada, let them enter the state’s homebuilding market and convince potential buyers of the many benefits inherent in paying $10,000 more to purchase a residence with pre-installed solar panels.
In the meantime, Nevada policymakers should ignore this unfortunate collision between progresssive environmental Nanny Staters and crony capitalism.
Consumers looking for affordable housing in 2020 will want to avoid California. California’s standard of living is about to skyrocket in price from the new building energy-efficiency standards the California Energy Commission (CEC) passed earlier this year. The bill requires every new home to be built with installed solar panels. CEC’s ambitious goal to rid the state of carbon sources by solar installation is ill-advised among many energy economists. Experts argue more cost-effective strategies exist in order to cut emissions. Building more solar and wind farms to pump renewable energy into the grid as the overall power-distribution infrastructure is a more cost-effective plan. There is no way around the fact, solar installation is expensive and still in early development stages. Providing the necessary time for development in technology is desperately needed in solar industry. Forcing the burden of costly rooftop solar upon consumers while better option exist is an injustice. Make Solar Safe supports affordable safe energy practices to protect all consumers.
Experts Aren’t Taking a Shine to California’s Rooftop Solar Rule
Energy economists say the new home requirement is inefficient and benefits wealthier people; supporters say it’s just one piece of the puzzle
By Jeremy Hsu
California has officially become the first U.S. state to require new homes to have rooftop solar panels, a major milestone in the Golden State’s hugely ambitious goal to shift all energy usage to 100 percent zero-carbon sources by 2045. But some economists doubt the rooftop rule will prove the most cost-effective way to cut greenhouse gas emissions for California—or other states seeking to address the human impact on climate change.
The requirement is part of new building energy-efficiency standards the California Energy Commission (CEC) passed earlier this year. New homes under the revised building code—which takes effect starting in 2020—will use an estimated 53 percent less energy than existing homes built under 2016 standards, and could cut the state’s greenhouse gas emissions by about 700,000 metric tons over three years, according to CEC estimates (pdf). The California Building Standards Commission officially approved the measure on December 5. “It will curtail greenhouse gases,” says Severin Borenstein, an energy economist at the University of California, Berkeley. “It’s just a very expensive way to do it.”
Borenstein and other skeptical energy economists—although acknowledging rooftop solar on new homes will help—argue more cost-effective strategies exist and could also provide better models for other U.S. states or countries seeking to cut emissions.
A Drop (or More) in the Bucket
The estimated direct impact of California’s rooftop solar initiative is not zero, but in some ways it barely budges the needle. That figure of 700,000 metric tons of emissions over three years is far less than even 1 percent of the state’s annual emissions (which total about 440 million metric tons), said Ethan Elkind, an attorney and director of the climate program at the Center for Law, Energy and the Environment at U.C. Berkeley, in an interview with California Magazine.
Looking at it another way, the estimated emissions reduction would have approximately the same impact as removing 115,000 fossil-fuel cars from California’s roads. That comparison would still amount to slightly less than half a percent of the more than 25 million cars registered in the state.
Many energy economists say the rooftop solar mandate will prove less cost efficient than building more solar and wind farms to pump grid-scale renewable energy into the overall power-distribution infrastructure. Borenstein’s U.C. Berkeley colleagues estimate solar farms in ideal locations—and with tracking technology to continuously face the sun, unlike fixed rooftop panels—could prove three times cheaper than rooftop solar. “California should be creating the knowledge and models that the rest of the world can follow,” Borenstein says. “This is a bad model that is raising the cost of reducing greenhouse gases.”
California could also do more to reduce emissions by easing vehicle reliance on fossil fuels, says Garth Heutel, an economist at Georgia State University who specializes in energy and environmental policy. Emissions from homes accounted for just 7 percent of California’s overall greenhouse gas output in 2016, whereas transportation contributed a whopping 41 percent of all emissions.
The CEC has defended the rooftop solar requirement (pdf) as part of a broader strategy to reduce emissions from the building and transportation sectors. Unlike grid-scale solar farms, rooftop panels provide onsite power to homes in way that does not require additional land or supporting infrastructure, the commission points out. It adds that rooftop solar’s distributed power approach could strengthen the grid’s resiliency against power failures, natural disasters and wildfires.
Who Pays the Costs?
Requiring rooftop solar panels may also raise upfront costs for California homeowners at a time when San Francisco and other cities already struggle with the lack of affordable housing. The CEC estimates the new standards—which also include energy-efficient lighting upgrades—will raise the cost of new home construction by about $9,500, but could save $19,000 in energy and maintenance costs over a 30-year mortgage. The situation may end up favoring wealthier home buyers who can afford the upfront costs and will save money in the long run, Borenstein says. “Could there be better, more cost-effective and cheaper ways to reduce emissions—ways that avoid unintended consequences like the impact on the affordable housing crisis in California?” Heutel says. “Yes.”
But that upfront cost need not deter new home buyers, said Drew Bohan, executive director of the CEC, during a recent meeting of the Building Standards Commission. The new standards allow homeowners or builders to use power-purchase agreements or leased solar options with little or no upfront costs—all while harnessing electricity bill savings from day one. There are even exemptions for new building projects where shade or unusually low electricity prices would not make rooftop solar cost effective.
If the state enacts the right policies, supporters say rooftop solar panels could spread clean energy benefits beyond just Californians who can buy expensive new homes and drive Tesla cars. For example, California’s cap-and-trade program—which since 2013 has required companies to buy emissions permits—is mandated by law to spend some revenue on socially and environmentally disadvantaged areas. That could help subsidize low-income families so that they, too, can buy new solar-powered homes and electric vehicles, says Dan Kammen, an energy policy specialist at U.C. Berkeley.
Construction companies will likely offer rooftop solar options that both power homes and recharge homeowners’ electric cars, Kammen says. That could encourage more Californians of all backgrounds to buy electric or hybrid vehicles, thus reducing transportation emissions. “We need to make sure the benefits of solar and electric vehicles go to low-income people,” he says. “To my mind, we will not succeed in a clean-energy transition unless it’s inclusive of specifically all low-income families.”
A California Court granted a preliminary injunction in favor of a public utility saying that the Riverside County ordinance would cause irreparable harm to the Imperial Irrigation District. The ordinance was pushed for by a private business owner in Riverside County and would have benefited his solar development company directly. Without the preliminary injunction the solar company, Energy Alliance, would have been able to market solar panels to customers with higher energy reimbursement rates than what is required by state law. This is a win for consumers who would have been defrauded when reimbursement rates were paid at state mandated rates.
Court’s ruling favors IID in Riverside County ordinance repeal
LOS ANGELES – A Los Angeles County Superior court judge Tuesday, November 6 granted a preliminary injunction preventing the county of Riverside from implementing a controversial ordinance that, if enacted, would bypass the authority of the Imperial Irrigation District to set electric rates for its customers, according to a recent press release.
In granting the injunction, Judge Mary Strobel found that the county’s ordinance conflicts with state law and, if enacted, would cause irreparable harm to the district, Frank Oswalt, IID’s general counsel, reported.
Although no final rulings were made, Oswalt said in the press release the court determined there was a likely probability that IID would prevail if the matter were fully contested. Further, should the ordinance be enacted, the IID board and staff would be irreparably harmed by the prescribed criminal penalties in the ordinance, and the district harmed by the millions in unrecoverable costs to implement it.
In June, the Riverside County Board of Supervisors approved Ordinance No. 943, that would have required IID to scrap its publicly vetted and board-adopted solar tariff, net energy billing and create a new solar tariff that closely resembles that of a privately owned utility, Southern California Edison. All this was set in motion at the request of a private business owner whose business is located in Riverside County and stands to directly benefit financially from the impacts of this ordinance.
“The notion that Riverside County would usurp IID’s ratemaking authority and adopt an ordinance that violates state law is inherently unreasonable and unprecedented,” said James Hanks, IID board president, in the release. “Today’s action by the court is a win for the district and its ratepayers.”
In making her ruling, Judge Strobel also noted several potential areas in which the county’s ordinance may conflict with the Public Utilities Act.
Additional details explaining the corrupt passage of Riverside County’s solar reimbursement came out during an Imperial Irrigation District meeting. According to lawyers for the district, Riverside County officials violated open meetings laws in determining who was going to vote for the contentious ordinance. The ordinance was already under scrutiny after details emerged that the ordinance was pushed by a private solar developer, Energy Alliance, including a promise for the developer to pay for court costs, effectively bribing the county into passing the change. If the change were to become law it would have a negative impact on Riverside County residents. Energy Alliance would be able to market solar panels to customers promising higher energy reimbursement rates than the utility is required to pay by state law.
IID alleges Riverside County violated Brown Act in passing ordinance
By: Imperial Valley Press
LA QUINTA — The Imperial Irrigation District is alleging Riverside County was in violation of California’s open meetings law, the Brown Act, when Riverside officials “lined up votes” outside of the public’s purview on an ordinance the district is now suing over.
What’s more, due to the alleged Brown Act violations, the district sent a letter from one of its attorneys demanding that the ordinance in question be rescinded or that Riverside County face additional legal challenges from the district.
The allegations were made public Tuesday at the district’s monthly meeting in La Quinta during a presentation by attorneys for Aguirre and Severson LLP, an outside law firm hired by the district to make a California public records request on its behalf.
The district is currently embroiled in a lawsuit with Riverside County over the approval of Ordinance 943, a law passed by the Riverside County Board of Supervisors in June compelling the IID to provide additional incentives to electrical customers who have installed solar panels on their properties.
IID officials are opposed to the ordinance, saying that at stake is the district’s authority to set its own rates and that the district is already in compliance with California state law.
“IID’s business model allows the district to offer its customers some of the lowest residential electric rates in California — rates that are as much as 50 percent lower than that of neighboring investor-owned utilities. The ordinance, should it be implemented, jeopardizes these rates and sets a bad public policy that has the potential to impact other public power providers across the state,” IID communications specialist Robert Schettler said in a statement.
The ordinance passed by Riverside County — which is not in effect, but in a court-ordered stay while the suit makes its way through legal proceedings — establishes new regulations and procedures for irrigation districts like IID that are operating net-energy metering programs. Net-energy metering is a program designed to benefit customers who generate their own electricity, usually via rooftop solar panels.
The Brown Act violation allegations are believed to be contained in a series of correspondence Aguirre and Severson requested between Riverside County officials and staff and principals in Renova Energy, a private solar installation company based in Palm Desert that appears to have pushed for the ordinance according to a series of emails.
“Because of the rather troubling aspects of the way this thing was passed, we asked outside counsel to make a public records request,” IID General Counsel Frank Oswalt said.
Oswalt said Riverside County responded to the records request Oct. 2 and within a series of email correspondence attorneys believed they found two emails, or examples, in which the Brown Act was violated.
The Brown Act states, Oswalt said, that a legislative body such as the Riverside County Board of Supervisors “shall not outside a meeting, use a series of communications to discuss, deliberate or take action” on a subject within its jurisdiction.
In a letter to the Riverside County board from IID Deputy County Counsel Joanna Smith Hoff:
“Email correspondence produced by [Riverside] County reveal extensive, non-public solicitation and collection of votes by Supervisor V. Manuel Perez at the insistence of [Renova Energy owner Vincent] Battaglia. For example, by email dated May 5, 2018, Supervisor Perez urged Thomas S. Freeman, a senior Perez staff member:
‘Tom, let’s count the votes. Use this information and the fact that Renova will indemnify. If votes still not there, we will need Vince (Battagalia) to knock on those doors to get us there.’”
Smith Hoff’s letter goes on to cite a second email where Perez lobbies Riverside County Deputy Chief Executive Officer Brian Nestande on May 1:
“Hey Brian, what are we waiting on now? Let’s move this forward. Let’s count the votes. V. Manuel Perez”
Smith Hoff writes: “It is clear from the above emails that Supervisor Perez worked through intermediaries to develop concurrence on Ordinance 943 out of public view and prior to any public consideration of the matter by the board.”
Further, IID alleges in Smith Hoff’s letter that the email correspondence also shows “a secretly negotiated indemnity agreement between Mr. Battaglia and his companies (Renova and ERA) on the one hand, and the county of Riverside on the other, that preceded any public board consideration or action in connection with the adoption of Ordinance 943.”
“We see this letter,” Smith Hoff writes, “as providing you [Riverside] an opportunity to rectify an illegal action avoiding the need for further litigation.” From the date of the letter, Oct. 12, the IID has given Riverside County 30 days to respond or be subject to legal action.
Riverside County officials deny any wrongdoing.
“The Riverside County Board of Supervisors has and will continue to adhere to the requirements of the Ralph M. Brown Act. The allegations by the Imperial Irrigation District have no merit. Board members did not engage in any serial meetings in advance of the ordinance’s introduction and adoption. The recent disclosure of emails in response to IID’s public records request does not change the fact that there were no serial meetings,” Riverside County spokesman Ray Smith wrote in an email Wednesday afternoon.
Aguirre and Severson partner Maria Severson took the IID Board of Directors and those assembled at Tuesday’s meeting through a history of the “behind-the-scenes” development of the ordinance by way of a chain of emails outlining negotiations between Battaglia, Perez and others. There was a specific call to arms against the IID from Battaglia, according to the emails. Battaglia makes references to going to “war” with IID and in another instance calling the IID Board of Directors “rogue, corrupt and environmentally tone-deaf” through the development of the ordinance and the alleged negotiation of the indemnity agreement.
IID is “wasting rate payer money challenging a law they know they have no right to challenge,” Battaglia said Wednesday. “We addressed this Brown Act business. They are throwing anything at the wall to try to make it stick.”
Battaglia said the IID is trying to “paint it as if this greedy solar guy is trying to bring net-metering back. … It’s a just a game they are playing now trying to smear me. … It’s a cartel down there. I understand that mentality; I’m just not going to put up with that.”
He added that any dealings he had with Riverside County officials was above board and legal.
No action was taken on the Brown Act issue by the IID board, as the issue was placed on the meeting agenda as an information-only item. None of the board members nor IID General Manager Kevin Kelley commented on the issue; Oswalt advised, “In fact, it would probably be inappropriate for the board to comment on it.”
Meanwhile, IID filed suit against Riverside over the ordinance back on July 13 in Riverside County Superior Court. The ordinance in question has not gone into effect, as the IID won a stay pending further consideration of the merits of the case. The parties are next due in court Nov. 6 in Los Angeles, seen as a neutral site by the court.
Adam Harvey pleads guilty to poisoning his neighbors’ tree for blocking his solar panels. Fortunately for the neighborhood, the tree did not die. Harvey must serve 20 days community service and pay a fee of $3,694 in restitution for his herbicide attack on the tree.
Brooklyn ‘Top Chef’ Admits He Poisoned Neighbor’s Tree
Bar Salumi co-owner Adam Harvey pleaded guilty in Brooklyn Criminal Court to trying to kill a neighbor’s silver maple tree, records show.
by Cathleen Culliton
BROOKLYN, NEW YORK — The celebrity chef pleaded guilty to poisoning his neighbor’s tree and must now serve 20 days of community service, court records and reports show.
Former “Top Chef” Adam Harvey admitted in Brooklyn Criminal Court Monday that he snuck into his Windsor Terrace neighbor’s backyard, drilled holes into her tree and filled those holes with herbicide in April, court records show.
The celebrity chef, who co-owns Bar Salumi in Park Slope, will pay $3,694 in restitution for hurting the silver maple tree, which his attorney, Bruce Maffeo, told the New York Post was not killed by Harvey’s herbicide endeavors.
Harvey first landed in trouble when his neighbor spotted a masked Harvey drilling holes into the tree he had previously complained was blocking light to the rooftop solar panels on his Seeley Street home, according to a criminal complaint.
Prosecutors charged Harvey with criminal mischief and criminal trespass during his arraignment in Brooklyn Criminal Court on May 15.
Harvey turned down a plea deal last month that called for 35 days community service, the Post reported.
Colorado Springs put out a warning to residents of a scammer posing as Colorado Springs Utility offering free solar energy. The scammer placed calls advertising free solar panels. Unfortunately, scams in the solar industry are becoming more common. Before signing any contract be sure to check with your local utility and make sure it is real. Make Solar Safe will continue updating consumers on discovered solar scams.
Colorado Springs Utilities warns about solar panel scam
COLORADO SPRINGS, Colo. (KKTV) – “We had a few reports last week of phone calls being made with someone posing as Colorado Springs Utilities offering free solar energy … which those were not legitimate calls.”
As Ellen Thommensen explained, Colorado Springs Utilities sent out an alert about a new scam after getting several calls from concerned residents about the “program.”
Phil Brodhagen, Peak View Solar’s owner said he has seen several scams surrounding solar panels.
He’s got some advice for anyone questioning an offer from a solar company.
“If it sounds too good to be true, it is,” Brodhagen said.
He told 11 News several companies offer “free” solar panels, which are actually zero money down up front solar panels, but buyers still pay a lot more than they expect.
“You will see that advertised all the time,” Brodhagen explained.
Colorado Springs Utilities suggested if anyone had any questions about solar purchases or scams such as this one, you can find answers at CSU.org.
Read more here.
Net metering is offsetting the cost of maintaining the grid for non-solar users and utilities. Costs many seem to forget about, such as costumer support, billing, and transportation are becoming a great expense for utilities having to buy low cost energy from solar users at a retail price. These expenses are shifting costs to ratepayers that are not solar. Solar users avoiding their share of the grid from retail net-metering has made it excessively more difficult for utilities to maintain capacity for the grid at fair costs. Make Solar Safe supports states making better solar practices for all consumers.
The problem with metering solar energy customers
By Josh T. Smith
New Hampshire, Arizona, Maine, and several other states are making changes to their net metering policies for solar energy. New Hampshire recently upheld the governor’s veto of a net metering expansion bill and Arizona is fleshing out a replacement for net metering. Net metering policies determine what rooftop solar owners are paid for the electricity they feed onto the electrical grid.
Generally, it requires that utilities pay the retail rate for electricity that rooftop solar panels produce rather than the lower rates that they pay other electricity generators. That means that a solar customer who consumes about 900 kWh in a month but produces 1,000 kWh from their panels will be paid the retail rate for the excess 100 kWh. If the figures were reversed, then they would be charged for the 100 kWh difference.
Net metering is meant to promote rooftop solar adoption and green electricity supplies, yet it does so at high cost. Net metering moves the share of grid maintenance costs rooftop solar owners would normally be paying onto average utility customers — including lower-income households.
Net metering’s cost-shift starts with how utilities charge customers for their electricity and services. Even though the costs a utility faces come from multiple sources, they largely collect their revenues from total sales.
Costs, in turn, come largely from maintaining capacity — things like having powerlines that can carry enough electricity for periods of peak demand and keeping generators on-call for when more generation is needed. There are also several fixed costs, like customer support and billing, which must be met no matter how much electricity a customer consumes that month.
This mismatch between revenues and costs makes net metering a threat to the business models of utilities across the nation. When a customer installs rooftop solar panels, they can dramatically reduce the costs the utility can charge them for since they consume significantly less electricity. That means that even if a utility spends $45 to 70 on ensuring that a consumer has power whenever they flip a light switch or plug into an outlet, the utility recoups none of those costs if the consumer’s production equals their consumption.
This $45 to 70, as estimated by Brookings Institution utility expert Lisa Wood, is the cost-shift from a single rooftop solar customer to non-solar customers when the rooftop solar customer pays a bill of zero. This doesn’t happen all of the time, but one summary of 11 different estimates of this cost-shift ranged from about $440 a year to around $1,600 a year. An estimate for the California Public Utilities Commission found that $1.1 billion of costs would be shifted each year by 2020.
The size of the cost-shift is debated amongst researchers, but no one seriously debates its existence. Studies have found strong evidence of the cost-shift under a variety of conditions and rules. For example, one 2015 paper by five engineers and electricity policy experts found that the cost-shift existed under each of the eight different policies they examined in simulations of 12 different electrical grid systems.
The cost-shift also creates regressive effects. It moves costs from the wealthy to middle-class and poor consumers. A 2018 Berkeley National Laboratory report of solar adoption and incomes in 13 states estimated that the median income of solar adopters was 54 percent higher than the median incomes of non-solar adopters. In dollar terms, that is a difference of more than $30 thousand a year.
Since the cost-shift is largely driven by poorly designed electricity rates, a straightforward policy change is to more closely associate costs and utility charges. Utilities should introduce charges for capacity, costs related to making sure the lights come on whenever consumers want them to, and fixed charges for things like billing and other customer services, alongside the existing charges for total electricity consumption.
Indeed, the authors of the 2015 study suggest just that, utilities should make their electricity rates reflect sources of costs instead of relying on total sales alone to cover everything. Adding demand charges and fixed charges would go a long ways towards ending the regressive cost-shift that current net metering policies create.