In December, a California Public Utilities Commission judge delivered a 126-page proposed decision focused on the future of solar energy and, essentially, recommended making no decision until 2019.
The full commission shouldn’t duck the issue when it takes up the matter later this month. It needs to find a path that allows the solar industry to continue to expand, while also guarding against unfair cost-shifting to people who don’t install solar panels.
The commission also ought to insist that solar companies provide clear, concise disclosures to consumers who enter into contracts to lease rooftop solar arrays.
Roughly 400,000 California residents, seeking to reduce carbon and save money on their electricity bills, have installed rooftop solar panels. Those panels produce 3,200 megawatts hours annually, roughly a third more than is generated by the Diablo Canyon nuclear power plant.
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More than a decade ago, the Legislature, seeking to spur the development of the solar industry, created a system by which residential solar customers consume electricity generated by their panels for free, and sell excess power to the electricity grid at the full retail price. That price is roughly five times greater than the cost of electricity generated by large-scale solar plants.
At night, when their panels aren’t producing, they draw on nuclear, geothermal, hydro and gas-fired turbines to keep their lights on. They receive credit for the net energy they produce. The term of art is net energy metering.
Wooden though the name is, net energy metering is the focus of intense lobbying by utilities, consumer advocates and solar companies.
Solar companies and their environmentalist allies warn that changes to payments could ruin their business model and hamper expansion. The argument has a familiar ring, not unlike the one made by Internet retailers who used to warn that requiring them to collect sales taxes would stifle innovation. The Legislature ended that subsidy by insisting in 2011 that online retailers collect sales taxes. Amazon seems to be doing fine. E-commerce is growing at double-digit rates.
PG&E and other private utilities, of course, want to end any hint of solar subsidy, claiming that, like electric car owners who pay no gasoline tax for road upkeep, solar customers are not paying to maintain the electricity grid upon which we all depend.
We don’t presume to know what the correct price for solar power might be. But the judge’s proposed decision in December assumed that Congress would not extend the solar income tax credit.
Congress ended up voting to extend the credit last month. The full Public Utilities Commission could use at least some savings attributable to the tax credit extension to impose some new requirements on solar companies.
For example, the California Legislature in 2013 authorized the Public Utilities Commission to impose a fee of up to $10 per month on rooftop solar customers to help maintain the grid. The commission also could encourage greater use of battery technology, helping solar customers store energy for use at night, and thus reducing their reliance on the grid.
Wealthier people remain the primary market for rooftop solar companies. In our view, anyone ought to be able to buy green energy, including apartment dwellers and low-income people. Solar companies should help pay to spread the benefits of electricity created by the sun.
Solar energy is and should continue to be an important part of California’s energy future. Solar panels produce no greenhouse gases, which can help combat climate change. Much of the solar industry is based in California, and it provides economic benefits in the form of jobs. That’s all good.
But the Public Utilities Commission probably could insist that the rooftop solar industry accept greater responsibility, without causing the sky to fall.