California's rooftop solar program collides with equity concerns

Source: Politico | March 31, 2021 | Colby Bermel

A pandemic-era backlash against California’s yawning wealth gap is taking aim at incentives for rooftop solar panels.

SACRAMENTO — A pandemic-era backlash against California’s yawning wealth gap is taking aim at the state’s pioneering climate policies. The latest target: incentives for rooftop solar panels.

The generous rewards paid to those who can afford to install them on their roofs amount to subsidies for the rich, utilities and other critics of the program argue.

It’s the latest fault line in a clash over whether too many Californians are being left behind by the state’s green push. For years, the state has wrestled with similar concerns about electric vehicle rebates flowing to wealthy Tesla drivers.

That anti-elitism sentiment has taken off during a recession that has disproportionately burdened low-income communities. It has also plagued Gov. Gavin Newsom, a multimillionaire whose children attended private school as most public schools remained closed. The governor now faces a likely recall election. But some solar advocates worry the resulting policy changes to the incentive program known as “net metering” could swing too far, or that they will inspire similar rollbacks in other states making the thorny transition to zero-carbon electricity.

If state regulators slash the rewards, “that will be very damaging to solar in California,” said state Sen. Scott Wiener (D-San Francisco), one of the industry’s biggest champions in the Legislature. “It will send a loud message to the rest of the country that California is not fully committed to a clean energy future.”

Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric have used similar equity arguments for years as they pushed to reduce incentives that challenge their business model. Now they are getting newfound support from an unlikely source: environmental groups concerned the policy is unfair.

As solar becomes more ubiquitous, they argue, low- and middle-income residents have to pay a higher share of costs to maintain utilities’ poles and wires for everyone’s benefit, including solar owners. The rewards fueled rooftop solar’s explosive growth, but that success has been clouded by concerns that maintaining incentives at current levels is unsustainable.

“Solar is still ‘mom and apple pie’ here,” said Mike Florio, a former California utility regulator who warned half a decade ago about the solar program’s increasing cost. “It was never a politically popular position to say [the benefits are] too rich,” he added, but pandemic-inflamed disparities have changed the calculus.

Paying owners of rooftop solar panels for the excess energy they feed back into the grid has propelled Californians to outfit a million-plus homes with solar panels, a target set 15 years ago when Arnold Schwarzenegger was governor. Roughly one in 10 buildings with an electric meter have solar panels, according to California’s three largest utilities.

Customer-owned solar is still a key piece of the state’s ambitious climate agenda: Energy agencies projected in March that California needs to more than triple rooftop solar capacity by its 2045 deadline to help eliminate carbon emissions from the electricity supply.

But the state’s net metering policy has long been dogged by claims that the payments are too generous, forcing utilities to raise rates to compensate for lost revenue. And as solar owners install batteries to store their extra electricity, further reducing their monthly bills, the remaining customers are left to absorb those service costs.

Also contributing to the rate hikes: expenses associated with upgrading the century-old grid so it doesn’t spark climate-exacerbated wildfires, which last year burned a record 4.2 million acres across California and killed 33 people.

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