California solar policy costing all utility customers: report

LOS ANGELES Thu Sep 26, 2013 9:49pm EDT

1 of 3. A home with solar panels on its roof is shown in a residential neighborhood in San Marcos, California September 19,2013.

Credit: Reuters/Mike Blake

LOS ANGELES (Reuters) - California's non-solar homeowners are paying a growing share of maintaining the power grid under a controversial state policy, while ratepayers with solar rooftops are paying less, a report commissioned by the state's utility regulator said on Thursday.

The report, which was issued by the California Public Utilities Commission but performed by an outside research firm, forecast that in 2020, the policy of "net metering" would cost $1.1 billion a year. It will shift about $359 million in costs a year from customers with solar panels to other ratepayers. Residential customers who have no solar panels would bear about $287 million of those costs.

Net metering allows businesses and residential solar customers to sell excess, or "net," power generated by their panels back to the utility, giving them a credit on their power bill.

The $359 million in total shifted costs is equal to about 1 percent of the expected revenue requirement of California's three investor-owned utilities in 2020, the report said.

The report seemed to bolster the utility industry's argument that customers with rooftop solar panels are not paying their fair share to maintain the power grid under net metering policies adopted by California and many other states.

But the solar industry claims that net metering benefits all ratepayers and is critical to driving down the cost and expanding the market for renewable solar power.

It is unclear what impact the report will have on the policy given that the state passed a law last month authorizing the CPUC to reform utility rates and design a new net metering program that would take effect in 2017.

The report says the cost impacts it identified are based on current rate designs, and that changes to rate structures would improve the cost benefits of net metering.

Representatives from all three of California's investor-owned utilities said they were still reviewing the report's findings. They are Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric.

Solar supporters were quick to point out what they saw as the report's flaws.

"The study doesn't take into account many of the societal benefits of the energy generated from rooftop solar," including public health benefits, energy security, and the economic benefits from jobs created by the industry, said Susannah Churchill, California policy advocate with VoteSolar, a nonprofit advocacy group.

The study found, however, that businesses and homeowners that have installed solar panels still pay slightly more than the full cost of providing them utility service.

At the end of 2012, California's three investor-owned utilities collectively had about 150,000 customers enrolled in net metering programs.

The average median household income of customers in those programs is $91,210, compared with the state's median income of $54,283, the report said.

The CPUC was required to by law to commission the report, which was authored by San Francisco research firm Energy and Environmental Economics Inc.

(Reporting by Nichola Groom; Editing by Richard Chang)

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Comments (2)
Burns0011 wrote:
Basically this: When you buy and install solar panels, you become a *provider* of power. And since all these homes are connected, you should be paid for the power you provide to the grid, if you generate more than you personally need in your home.

By suggesting this is not ‘paying a fair share’, the major power companies are complaining that they should be allowed to use household-generated power for free, AND still charge the homeowner for the power they use from the panels.

Sep 28, 2013 8:26pm EDT  --  Report as abuse
Burns0011 wrote:
The only side of this argument that makes sense, is that each household who generates excess power, should share a tiny part of the cost of maintaining the power grid. Since the grid is massive, and individual household income is not, it should be prorated by the percentage of power provided as related to the entire output of the grid.

i.e. Pennies a month.

Or it should be a reduced amount paid, and the reduction clearly and transparently accounted for. i.e. “You generated x kW, maintenance cost s for us are $0.y per kW. We’re paying you $$ per kW. Our gross payment is $$*x, and your total grid maintenance surcharge is $x*0.y. Therefore, your check is $$x – ($x*0.y), for a total of $z. In the event that you are not a net generator of power, your grid maintenance surcharge is $0.00.”

Sep 28, 2013 8:34pm EDT  --  Report as abuse
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