The California Public Advocates Office (PAO) recently published a factsheet that parrots utility talking points about rooftop solar, regurgitating a grossly inaccurate cost of rooftop solar in order to advocate for changing contract terms for two million solar consumers. The PAO’s unprecedented anti-solar activism is misguided and wrong.
At issue is customers who installed solar under net energy metering (NEM). The CPUC ended NEM in 2022 when it created the net billing tariff (NBT). That decision reduced the credit for energy that new solar customers send to the grid by 80% but it kept the state’s word to existing consumers by not changing the terms of their NEM contracts. Now PAO wants to reverse course and change the contracts for existing customers, 60% of whom are low-, working- or middle-class. Such a policy would impact renters, public school districts, small businesses, and city and county governments as well.
The PAO’s fact sheet is flawed in many ways. Here are three:
It claims that self-generation is a cost to the utilities. Energy generated by a rooftop solar panel and used by a consumer in real time without ever touching the grid is the same as energy efficiency or conservation. Counting this reduced sale of energy as a cost to the utility is plain wrong. No consumer is obligated to buy electricity from anyone.
It claims all grid infrastructure costs are fixed. If this were true, utility spending on transmission and distribution would not have increased 400% over the past 20 years while electricity demand remained flat. Utility spending is out of control because this is how utilities profit. Customers pay the utilities $21 billion for grid infrastructure every year. PAO should be focused on containing utility spending rather than undermining customer investments in solar.
The Avoided Cost Calculator contains faulty assumptions, and PAO further skews the results by misrepresenting the outputs. It looks only at immediate savings rather than average lifetime savings, ignoring the fact that local power will provide increased benefits over time as we vastly increase local consumption. It also undercounts usage from electrification and uses unrealistic assumptions for the future cost of large-scale renewables. This makes it seem easier and cheaper to manage the grid using faraway power plants, when it is already becoming harder and more expensive to rely on these resources.
For years, the State of California has encouraged people to invest in rooftop solar for the benefit of all. As a result, two million consumers have invested $40 billion to collectively build 12 gas power plants-worth of clean energy. If California goes back on its word, it would not only anger millions of people, it would undermine the solar market going forward as well.
Rooftop solar has been good for California. It has lowered costs for everyone, provided highly valuable electricity on hot summer days, and helped clean up the air. As California continues to push electric cars and heat pumps, the need for more rooftop solar will only grow.
California’s electricity affordability crisis is not because two million consumers put solar panels on their roofs. California’s electricity crisis is because the state’s investor-owned utilities have been poorly regulated for decades spending ratepayer money irresponsibly in order to turn record profits. Instead of blaming rooftop solar users, the PAO should do their job of reining in out of control utility spending and get California back on track building clean, affordable and reliable energy for everyone.