California needs to accelerate rooftop solar deployment, not limit it. However, the California Public Utilities Commission sharply reduced solar incentives for homes and businesses in April 2023.
The CPUC's actions have caused rooftop solar installations to fail, hindering the state's climate progress. Since April, the facilities have fell by approximately 80% and it is estimated that 17,000 installers have lost their jobs. Because California has long been a leader in rooftop solar policy, the commission's decisions may be jeopardizing rooftop solar elsewhere: Last month, Hawaii instituted similar cuts to its incentives.
The CPUC argued that the new rules would give Californians more incentives to install batteries next to their solar panels by making the energy stored in the batteries more valuable than the energy exported to the grid. But in November the commission also cut incentives for solar and battery systems. in apartments, schools, shopping centers, small businesses and farms.
Rooftop solar advocates fear the commission is trying to squash distributed solar in favor of corporate installations in California deserts and farmlands. The most charitable interpretation is that he is actually trying to reform a system in which people who can't afford solar energy end up subsidizing the installations of wealthier Californians. These contradictory interpretations have already caused lawsuits, and they promise to create more political reactions in the coming months. Instead of choosing between equity and rooftop solar, California needs a win-win proposal that prioritizes both.
Over the past two decades, California has proven that rooftop solar can accelerate the energy transition away from fossil fuelsmake neighborhoods more resilient Provide local power in case of blackouts. and protect residents from extreme heat by Reduce the temperature of buildings under solar panels..
However, without incentives, it doesn't make financial sense for most Californians to install rooftop solar, which means we all get less of this much-needed common good. Instead of forcing private utilities to bear the costs of incentives, which they then pass along to rich and poor ratepayers alike, California itself should accept responsibility for supporting rooftop solar.
I can almost hear the screams about high taxes, but hear me out. By moving support for rooftop solar from utility bills to the tax base, Californians can save as much on their utility bills as the state pays in incentives.
The equity issue has long plagued California's innovative rooftop solar program. Before last April, the CPUC required utilities to subsidize rooftop solar by paying homeowners the retail rate for the electricity they sent to the grid. (usually around 33 cents per kilowatt-hour, but sometimes up to 75 cents). That's much higher than the wholesale price utilities pay for large solar installations. (closer to 5 cents).
These higher payments caused utility costs to increase, resulting in higher electric rates for all customers, including those without solar panels. As utility rates increased and solar incentives stayed the same, Installing rooftop solar, if you could afford it, became more attractive, fueling this unfair cycle.
Even after the CPUC reduced incentives, public services continue to pay more than wholesale rooftop solar. But the reduction has limited the growth of clean energy, undermining California's decarbonization. To resolve this conflict, we must allow utilities to pay competitive rates for electricity, regardless of the source, and restore incentives for rooftop solar.
Utilities should pay rooftop solar owners the wholesale rate for the excess solar energy they send to the grid. The state should then provide enough tax credits to homeowners so that power makes up the difference between the wholesale price the utility pays and the previous incentive price. Financing the commons is one of the central purposes of our state budget, and it is time to include rooftop solar in that category.
In California, our state income tax is progressive: higher earners pay a higher percentage of their income for the public benefit. Electrical service bills, on the other hand, are regressive: Those who cannot afford to use rooftop solar pay more of their income to cover their basic needs. We need to restore financial support for rooftop solar, but let's do it equitably, through our progressive tax code, and redistribute the costs of clean energy away from California's most vulnerable residents.
Proposing that the State make another financial commitment will be a difficult sell, especially in a year of large deficits. But the world is running out of time to address climate change, and more rooftop solar will decarbonize our grid more quickly.
The CPUC's recent actions are setting California back. By changing the way rooftop solar incentives are paid, we can regain our climate leadership, restore lost solar jobs, and overcome the rooftop solar wars toward a more sustainable future for all.
David Lappen is an electrical engineer and inventor and serves on a subcommittee of the Santa Monica Sustainability Commission. Environmental Justice and the environment.
