Solar Industry Purposely Uses Outdated Metric to Overstate Cost-Effectiveness of Rooftop Solar in Hopes of Maintaining Excessive Subsidies

Posted on June 25, 2021

Sacramento – A diverse coalition advocating to reform the state’s rooftop solar program, Net Energy Metering (NEM), today said solar companies are intentionally using outdated and inaccurate metrics to overstate the value of rooftop solar and bolster their claims that excessive subsidies are warranted.

Members of the Affordable Clean Energy for All coalition say that in the latest filings with the California Public Utilities Commission (CPUC), the solar industry purposely ignored using the CPUC’s updated Avoided Cost Calculator to make rooftop solar seem less expensive to non-solar customers and more cost-efficient when compared to other energy options. The latest misleading calculations are part of a long-standing strategy by the solar industry to deflect attention away from the fact that NEM results in a roughly $3 billion annual cost shift benefitting primarily wealthier homeowners with rooftop solar at the expense of non-solar customers who are more likely to be renters, lower-income, and seniors.

“The rooftop solar industry’s refusal to use updated, objective tools underscores its deliberate approach to maintain the unfair, growing cost shift and the urgent need to reform the state’s rooftop solar program,” said Kathy Fairbanks, spokeswoman, Affordable Clean Energy for All. “Solar companies are putting their own profits before the needs of the most vulnerable in our community.”

The coalition is advocating that the CPUC take meaningful action to fix the NEM cost shift in whatever way it chooses.

The CPUC’s Avoided Cost Calculator measures the costs avoided by utilities (i.e., the savings) in providing energy from rooftop solar and the like. In the case of rooftop solar, the Avoided Cost Calculator allows regulators to compare and contrast total costs and benefits of rooftop solar to the total costs and benefits of what it would otherwise cost utilities to provide that same electricity using other options available at the time.

The Avoided Cost Calculator was developed by a third party and measures everything involved in producing, procuring, and providing electricity to customers including energy generation, generation capacity, energy delivery, as well as the impact that a certain type of electricity will have on greenhouse gases and global warming. While the CPUC just recently adopted the current Avoided Cost Calculator, the Administrative Law Judge in a May 21 procedural email providing guidance to parties submitting testimony stated that the CPUC would use the updated Avoided Cost Calculator in its analysis and decision-making.

The updated Avoided Cost Calculator now both aligns with the CPUC’s reliability and decarbonization planning process and reflects actual market prices for energy. The results of the modeling make it clear that rooftop solar is the most expensive form of clean energy in California at this time.

Continued Fairbanks, “The rooftop solar industry won’t acknowledge they are no longer competing for environmental benefits and cost-effectiveness against primarily fossil fuels. They are competing against numerous equally clean and more cost-effective clean energy options in California. That’s why the generous NEM subsidies need to be reformed. Otherwise, Californians will continue to overpay for rooftop solar.

“The rooftop solar industry cannot be seen as a constructive contributor to a policy solution when it continues to be self-serving by refusing to acknowledge objective data and the severity of the problem,” she concluded.

Affordable Clean Energy for All is a diverse coalition of nearly 100 groups including clean energy, seniors, faith-based, low-income, consumers, community and business groups seeking changes to California’s 25-year-old NEM program. The coalition supports the continued growth of rooftop solar and the state’s commitment to clean energy and is encouraging the CPUC to reform NEM’s antiquated rate structure that is needlessly increasing electricity rates for millions of residents including those least able to pay.