More rooftop solar, energy efficiency are solutions to lower rates, but utilities and regulators are standing in the way of real relief for consumers 

CALIFORNIA—California for-profit utilities and state regulators are facing mounting criticism for their inability to control energy rates. As a result, utilities are returning to their favorite scapegoat for rising rates: California’s 2 million solar homes and businesses. 

A new research report released today by the California Solar & Storage Association (CALSSA) reveals the real reason why energy rates keep going up: out of control utility spending and record breaking profits. 

Download: Rooftop Solar Reduces Costs for All Ratepayers. Report authors are available for interviews on the findings and implications for California’s energy rates.

Utilities say rates are rising because they are selling less energy, but this claim is simply untrue, according to the report. California’s electricity usage has been consistent for twenty years. Rooftop solar keeps demand on the electricity grid from growing, which reduces the need to build grid expansions and saves everyone money. 

Analyzing public data reveals that utility spending on grid infrastructure is the real source of rising rates. The high degree of correlation between utility spending and rate increases demonstrates that no other factor comes close to the impact of runaway spending. Grid spending increased 130 to 260 percent over the past 8 to 12 years, directly correlating with rate increases. 

Utilities are incentivized to spend even if they do not need to. They are guaranteed a profit margin of approximately 10% on every dollar they spend on grid infrastructure projects. Utility profits have increased at growth rates that are very similar to the pace of energy rate increases. 

Rooftop solar is part of the solution to rising energy rates. New research – backed by a noteworthy group of energy and economics experts – shows that solar users are on pace to save all energy consumers $1.5 billion dollars in 2024 due to decreased load on the grid and other shared benefits. The ability of rooftop solar to reduce energy costs for all consumers will be even more important as California moves toward electric vehicles and building electrification.  

“The data is clear. Regulators and policy leaders should be embracing the power of rooftop solar to help keep energy rates under control as they pursue other solutions,” said Richard McCann, a partner at M.Cubed Consulting which performed the research. 

Over the past two years, California responded to utility attacks on solar by bungling a transition to different solar credit rates, prohibiting many customers on multi-meter properties like apartments, schools and farms to consume their own solar energy, and adopting high fixed charges that make solar less affordable. There are currently proposals  to change the terms for customers who previously invested their own money in clean energy.

The attacks on solar are taking a toll, according to the new report. Rooftop solar sales have been set back ten years, hurting low and moderate income families who make up 60 percent of the rooftop solar market today. California’s recent solar crash also caused dozens of solar businesses to shut down and precipitated the loss of 17,000 local green jobs. 

“Utilities are attacking clean energy as a way to deflect attention from their self-serving overspending,” said Brad Heavner, CALSSA's policy director. “This has nothing to do with the transition to clean energy and everything to do with companies owned by Wall Street running roughshod over California consumers.”

The report offers important recommendations to reverse the damage, make the benefits of solar more accessible to all Californians, restore good clean energy jobs, keep energy rates under control, and get California back on track to meet the state’s clean energy goals: 

• Respect existing solar investments for consumers who still have net metering.

• Reject solar-specific taxes or fees.

• Streamline the solar permitting and interconnection processes.

• Establish a Million Solar Batteries initiative.

• Address utility profit motives that discourage rooftop solar adoption.

• Improve regulatory oversight of utility spending.

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About CALSSA

The California Solar & Storage Association (CALSSA) has advanced the common interest of the solar and storage industry for over 40 years, making California the most robust market in the U.S. The association is the state’s largest clean energy business group with 700 member companies representing an array of businesses that manufacture, design, install, finance and provide other resources to the growing local solar and storage market in California. Learn more at www.calssa.org.