Decarbonization will not be easy. Every action taken to decarbonize often comes with tradeoffs. Even the most obvious wins can get mired in things like unforeseen second order effects and changes in public perception. This is the case with rooftop solar. Installing solar panels on the top of the homes and buildings that we already use is an effective way to capture renewable energy, add resilience to our energy grids, and allows people to invest their money towards their own sustainability goals. But rooftop solar is not without its detractors.
The pushback for rooftop solar comes from local utility companies and as easy as it is to blame them for their monopolistic greed, they have a point. Even though utility companies earn revenue by charging for power, most don’t make a profit from generating it. Instead, they get paid to maintain and upgrade the electrical grid. There are significant fixed costs to keeping electricity flowing on power lines overhead and underground. Costs like tree trimming, retrenching, and sure the occasional deadly forest fire insurance settlement. Customers that have solar panels still use the grid but can end up paying very little for the upkeep because they don’t buy power.
So, utility companies turn to a different revenue model. They are now starting to assess larger flare rate “connection fees” that pay for the grid no matter the customer’s power usage. In California, regulators just passed a controversial expansion of these fees, even as the state sets high decarbonization goals, because of the economic burden it puts on lower income residents. “Solar installations have become a major industry,” California Public Utilities Commissioner John Reynolds said. “Our support for this industry has produced a cost shift from solar customers to non solar customers.” Those that can’t afford to install solar, or to rent from a building that has it, shouldn’t be required to pay for those that can, the thinking goes.
Consumer and minority advocates alike have pushed to take the burden of paying for the grid off of residents without solar and I think they have every right to do so. But this quest for equity is slowing down one of the most important pieces to building a sustainable, carbon free future. Maybe, rather than just levying a fee on solar users, we should rethink the entire way that energy is procured and purchased. Currently most solar users have “net metering” agreements with utility providers that allow them to earn credits for power that they produce and don’t use. While this seems fair, those credits are often much less than what the peak power rates are, which is often when solar panels provide power to the grid. If we were to be truly fair with rooftop solar owners they should be paid for the spot rate of the energy that they produce. Sure this would require an upgrade to our electrical grid in order to allow it to communicate with each solar equipped building, but those upgrades are necessary to build the type of reactive grid that we will likely need as we lean away from steady sources of power like goal and gas and towards intermittent ones like wind and solar.
The power companies would never want a spot price type of solar arrangement because it would ultimately mean that they would have to pay certain customers rather than just reduce their bill, so this will likely never happen. But it is an important reminder that the system is already created unfairly for rooftop solar, so the additional connection fees are actually just one more way that solar is disincentivized, against all of our best interests.
One of the hard things about writing about energy policy in the US is that it varies so much by state. Here is a good map that shows just how varied each state’s net metering policy really is.
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