Monday, March 8, 2021

The regressive rooftop solar subsidy

My friends at Environment California sent me an email today urging me to contact the California PUC in defense of net metering:

A fundamental solar energy policy is under threat in California.

Net metering, a rule that fairly compensates solar owners for the excess energy that they contribute back to the grid, is a popular solar policy used in 49 states. But the CA Public Utilities Commission (CPUC) is expected to consider making changes to this important solar policy, even at a time when we should be doing everything we can to add more solar panels to our rooftops and more batteries to our homes.

But hang on a second. There's this from my other friends over at the Energy Institute at Haas:

We are effectively funding the state’s energy infrastructure through a tax on electricity, but like most taxes, many wealthy people find a way to avoid it. The well trod path for avoiding California’s electricity consumption tax is behind-the-meter (BTM) solar. It’s the offshore account for your utility bill.

Basically, non-solar customers are cross-subsidizing the rooftop solar customers, who are not paying their fair share of various system costs, with the result that the marginal cost of electricity is higher than it should be, even taking account of the social cost of carbon. This is discouraging electrification, which is a key part of the plan for addressing climate change. And on top of that, it is a subsidy for the relatively well to do, who are more likely to install and benefit from rooftop solar.

What to do? Get the prices right. I know, I sound like an economist.

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