ICYMI: UC Berkeley Energy Expert Sums Up What’s Wrong with California’s Rooftop Solar Program:
Posted on June 1, 2021
Sacramento – In a blog post released today, California’s foremost energy expert criticized the unfair cost shift in California’s Net Energy Metering program (NEM) and exposed as false the top seven arguments made by solar companies to oppose reforms to the program.
“Sometimes a regressive cost shift really is just a regressive cost shift. It actually is that simple,” said Severin Borenstein, E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business and Faculty Director of the Energy Institute at Haas, UC Berkeley.
Said Borenstein: “When a household installs solar in the service areas of the three California investor-owned utilities (PG&E, SCE and SDG&E), the customer saves 20-30 cents for every kilowatt-hour their system produces, but the utility costs only go down by 7-9 cents. (Studies that reach similar conclusions here, here, and here — none paid for by entities with a financial stake in the answer). The extra 10-20 cents are avoided by that household, but those fixed costs still have to be paid. So rates go up for everyone else.
“It has been well documented – and surprises no one – that households with solar are disproportionately wealthy (as well as disproportionately white). So, when a customer installs solar, their share of the fixed costs are shifted to other ratepayers who are poorer on average,” he added.
“Net Energy Metering hurts the poor. It’s that simple,” concluded Borenstein.
Affordable Clean Energy for All is a diverse coalition of clean energy, seniors, faith-based, 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 California Public Utilities Commission (CPUC) to reform NEM’s antiquated rate structure that is needlessly increasing electricity rates for millions of residents including those least able to pay.