One of the few success stories to emerge from California’s ill-fated experiment with restructuring its power market is solar power. Over the last two years, installations of this clean non-polluting energy source have increased by 1,000 percent.
Poll after poll consistently ranks solar energy as the first choice of citizens when queried about what fuel source they prefer to generate their electricity. Given concerns over national security and the corresponding vulnerability of fossil fuel supplies, and the growing evidence confirming a link between fossil fuel burning and global climate change, increasing the nation’s reliance upon solar power has never made more sense.
Last year, utilities mounted a campaign to increase the cost and complexity of “net metering,” a policy pioneered in California that allows a owner of a solar energy system connected to the grid to barter with their utility. When the sun is shining, solar photovoltaics (PV) transform sunlight into electricity. If the owner of the solar system doesn’t need the power produced by solar panels, the electricity can be sent back to the grid under net metering. When the sun isn’t shining, the utility, in essence, returns the electricity back to the customer. The meter spins backwards and forwards until production and consumption is netted out on a monthly or annual basis.
Due to a last-minute grassroots lobbying effort by solar advocates and customers, proposed utility changes to net metering for large-scale solar systems were defeated in the closing days of the last legislative session. This year, the California Public Utilities Commission (CPUC) proposed what amounts to a new tax on customer-owned solar systems that would increase the cost of this non-polluting electricity source by up to 40 percent.
If California’s powerful private utilities – Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) – have their way, charges ranging from 2 to 5 cents/kWh will be added to each kilowatt hour produced by solar systems that, like energy efficiency measures, reduce the need to purchase electricity from other often more polluting and sometimes more often more expensive sources.
Why would the CPUC increase costs of solar power that would effectively wipe out a 40 percent subsidy granted to solar PV under other existing state programs?
Large industrial customers were recently authorized to retain electricity purchase contracts with outside parties even though small consumers are still required to continue buy overpriced and dirty long-term power supplies purchased by the State of California during the height of the energy crisis in 2001. In exchange for the right to buy cheap and dirty power, the CPUC will require these large customers to pay an “exit fee” or tax to help pay their fair share of the state’s investment in long-term fossil fuel supply.
PG&E, SCE, and SDG&E would now like to also charge individual customers who install a solar electric system on their facility the same (or higher!) charge on large industrial customers who entirely leave the system. This proposed charge is fundamentally unfair for several reasons:
- Individuals, companies and government facilities that install solar systems still buy most of their power from utilities. Therefore they pay the same overall higher rates to pay off state investment in power supplies as all other utility customers.
- Customer-owned solar power provides public benefits by delivering non-polluting electricity during peak demand periods, when the dirtiest electric generators often come on line to avoid blackouts. Large customers who entirely leave the system offer no comparable benefit.
- The proposed utility “solar tax” directly contradicts existing state policies designed to encourage expanded use of on-site solar power. On top of that, implementing the new solar tax will create administrative costs for utilities that will likely supersede the miniscule amounts of money collected from solar customer/generators.
Remarkably, the CPUC suddenly seems to be engaged in a radical about face and shifting toward opposing the utility exit fee assessments. Over 7,000 e-mails opposing exit fees on solar systems were received by the CPUC. This outpouring of support for solar energy prompted two of the five CPUC Commissioners to offer counter proposals to the original utility-sponsored exit fee proposal that would exempt all solar PV customers from exit fees.
Exempting all solar customers connected to the grid from exit fees is the only rational policy if one looks at the big picture. Does anyone propose to tax people who reduce their reliance upon grid power by being more energy efficient? Of course not! In fact, the customers are rewarded for that beneficial behavior with financial incentives. Solar customers also reduce peak demand should be encouraged, not dissuaded by new financial penalties.
The CPUC seems to be finally seeing the light. Though disorganized and vastly outspent in the past, the solar lobby in California is maturing and having an impact on public policy. It is demonstrating that its voice can be heard both in the California Legislature and in the hearing rooms of state regulators. The phrase “power to the people” is taking on a whole new meaning as solar advocates flex their muscles against powerful utilities. In the process, they are using their newfound clout to foster real world solutions that benefit economy and environment.