California's aggressive push to increase renewable energy
production comes with a catch for people with solar panels on the roof: You
don't count.
If a home or business has a rooftop solar system, most of
the wattage isn't included in the ambitious requirement to generate half of the
state's electricity from renewable sources such as solar and wind by 2030, part
of legislation signed in October by Gov. Jerry Brown.
That means rooftop solar owners are missing out on a
potentially lucrative subsidy that is paid to utilities and developers of big
power projects.
It also means that utility ratepayers could end up
overpaying for clean electricity to meet the state's benchmark because
lawmakers, by excluding rooftop solar, left out the source of more than a third
of the state's solar power.
Owners of rooftop solar systems and their advocates aren't
happy about the policy.
"Ratepayers essentially subsidize utility
companies," said Bernadette Del Chiaro, executive director of the
California Solar Energy Industries Assn. "We all get taken to the
bank" if utilities are spending to reach a 50% clean-energy mandate that
could be attained faster and cheaper with the help of roof panels.
For homeowners such as Carrie McCandless, the state's policy
on rooftop solar came as a surprise.
"I'm stunned," said McCandless, a Livermore,
Calif., resident who wanted to help improve the environment because her
daughter suffers from severe asthma.
Her solar panels fit the bill, producing clean energy for
her family. And they gave her a sense of pride, she said, in helping the state
reach its energy targets — or so she thought.
"We all think we're making a difference and
contributing," McCandless said. "I'm just so angry."
The rooftop solar industry and consumer advocates say
opposition to including rooftop solar in California's renewable energy mandate
came from large developers that feared competition for subsidies as well as
unions that were upset because rooftop solar installers typically aren't
members.
"They excluded it because the unions and corporate
entities didn't want it," said Jamie Court, president of the advocacy
group Consumer Watchdog.
Twenty-one states and the District of Columbia include
rooftop solar panels in their mandates for clean energy, with varying benefits
for participants.
Among the states with clean-energy mandates, the solar
industry says, California is alone in its approach of counting mainly
commercial installations that sell to utilities — Southern California Edison,
San Diego Gas & Electric and Pacific Gas & Electric — or facilities
that the utilities own themselves. (Municipal utilities such as the Los Angeles
Department of Water & Power set their own clean-energy goals.)
We all think we're making a difference and contributing. I'm
just so angry.- Carrie McCandless, homeowner.
Under the state's new renewable energy requirements, the
priority is large-scale projects such as solar and wind farms that supply non-municipal
utilities. Because rooftop solar falls into a lower category than large-scale
producers, system owners are losing out on valuable financial benefits, energy
experts say.
Large producers of solar and other renewable energy earn a
clean-energy credit every time they send the electric grid 1,000 kilowatt hours
— roughly the amount of electricity an average home consumes in a month.
For utility-scale solar and wind energy producers, the value
of that credit in California is about $50, said Bryan Miller, senior vice
president of public policy and power markets for Sunrun Inc., the nation's
largest residential solar company. The credits can be traded and sold to help a
power company improve its clean-energy footprint.
The basic value of rooftop solar under the state policy is
one-hundredth of a penny, Miller said.
"They're worthless, essentially," he said.
Sunrun and San Mateo, Calif.-based SolarCity would benefit
from counting rooftop solar in the mandate, but so would consumers, Del Chiaro
said. Given the total cost of building large generators, transmission and
distributing that electricity, Del Chiaro said, utility customers will continue
to see higher rates as state policy builds two sets of electricity systems —
one on rooftops, the other with big-box power plants in the desert.
"We're going to be better off," Del Chiaro said,
"building a smarter grid."
Kip Lipper, a state Senate staffer who helped draft the
legislation setting the 50% renewable energy benchmark, said the clean-energy
mandate wasn't designed to deny rooftop solar owners but to ensure that the
utilities did their part in curbing carbon pollution.
Utilities supported the idea of counting rooftop solar in
the clean-energy goal, said Lipper, who is renowned for his environmental work.
That's because including rooftop solar would have meant that the utilities
wouldn't have to buy or build as much themselves.
"The utilities were delighted with that approach,"
Lipper said.
Scott Wetch, a lobbyist for the California Coalition of
Utility Employees, said unions opposed inclusion of rooftop solar in the
clean-energy mandate because the goal was to build "as much green power as
possible."
"It is designed to change the behavior of the
utilities," Wetch said. Allowing rooftop solar into the clean-energy
requirement would create a "double dip for the rooftop solar
industry," which he says already receives substantial subsidies.
The debate over the role of rooftop solar energy production
comes at a time of great uncertainty for the solar panel industry and system
owners.
The Edison Electric Institute, the utility industry trade
association, has referred to rooftop solar and energy efficiency as
"disruptive technologies" to a business model that relies on keeping
power generation centralized.
Rooftop solar increasingly faces its own disruptions.
A 30% federal tax credit that has helped homeowners and
businesses acquire rooftop solar expires at the end of 2016 and may not be
restored to that level — and possibly not at all for residential customers.
In addition, the California Public Utilities Commission is
drafting new rules for how rooftop solar owners will be compensated for power
they send to the electric grid. The proposals for compensation, known as
net-energy metering, include tacking additional fees onto rooftop solar owners'
electric bills.
Utility companies argue that rooftop solar users don't pay
their fair share for power lines, transformers, wires and other costs
associated with maintaining the electric grid. So they have proposed a range of
fees that the rooftop solar industry says could kill its business and the expansion
of rooftop solar in the state.
The potential threats to rooftop solar have dismayed
McCandless. She said she personally has campaigned in her neighborhood to
convince other homeowners to go solar.
McCandless, who works in robotics, said her family bought a
sizable solar system for their 2,200-square-foot home 12 years ago. She said
they still use some energy from the grid but her 7-kilowatt system generates as
much as 800 kilowatt hours of electricity in a month.
McCandless said she would give tours of her home to
encourage others to go solar, and she's tried to stay informed about
developments in the rooftop solar industry. But she said she didn't know that
she wasn't contributing to the state's clean-energy mandate and missing out on
a $50 certificate every time her system generates 1,000 kilowatt hours.
"I think the utility companies are all attacking
rooftop solar," McCandless said.
David Rusch, 67, a retired educator from Culver City, spent
$12,600 in March to buy 11 solar panels for his house and take advantage of the
30% federal tax credit.
Rusch said he was looking "to do my part to transition
from carbon emission to zero carbon."
Catherine Washington, 72, bought rooftop solar panels in
2012. The Long Beach resident now pays a couple of dollars a month just to
remain connected to the grid. The retired retail sales worker said the solar
system has helped her avoid $80 to $90 electric bills in the hottest months and
$40 to $50 bills during other months.
Those kinds of benefits, Washington said, have proved the
system's value to her. And as others are seeing those benefits, she said, they
increasingly will protest any state effort to stymie rooftop solar's growth.
"People aren't stupid," Washington said.
"Some people are going so green, they're off the grid."
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