If solar roof subsidies are unfair, what about Prop. 13? – Orange County Register
Cardboard boxes containing petitions against proposed reforms that solar advocates claim will hamper the rooftop solar market are on display before being moved to the office of the Governors to be Brought The California Public Utilities Commission is expected to propose reforms that would lower the financial incentives for homeowners who install solar panels. (AP Photo / Rich Pedroncelli)
Apparently California discovered inequality in one of its high profile housing policies.
No, not the misguided tax breaks in Prop. 13.
A curious band of allies has urged state regulators to “correct” what is considered an overly generous benefit for those who have invested in home solar energy. The California Public Utilities Commission proposed in mid-December to reduce the discounts homeowners with rooftop solar and storage systems get on their electricity bills when they sell back additional energy to utility companies.
Let me be right up front: I am completely in conflict on this issue, as I have owned solar modules for two decades.
The plan provides an 80% cut in the amount for new and seasoned solar owners that is credited for energy sent back to the utility company.
Well, no two owner solar systems or the utilities that power them are the same, so it’s difficult to gauge how much higher our bills could be. As I filled my trustworthy spreadsheet with cost estimates from the funded SaveCaliforniaSolar coalition, the average monthly bill for a typical solar panel owner goes from $ 75 per month to $ 204 if the plan is approved.
So why are multiple subsidies for solar energy production on the verge of death as early as January 27th?
It seems that we have to “withdraw” these incentives because they have worked too well, the proposal says. Launched 25 years ago to advance California’s solar energy initiatives, the state’s once-far-fetched goal of “million roofs” has been exceeded by at least 200,000 installations.
This logic, if any, also suggests that homeowners with solar roof panels are not paying their fair share of the cost of maintaining the electrical grid that serves everyone.
As the CPUC progresses, for every future solar home owner or house with 15 years or more of solar power, the monthly fees would be increased just to get hooked up to the grid.
Also, CPUC says, the excess electricity that homeowners generate and sell to their utility is far more than the utility would pay in the energy markets.
All of this begs the question: Who is making up those anti-green energy claims government regulators are buying in the face of numerous power supply challenges and climate change concerns?
It’s no surprise that the state’s utilities – Edison, PG&E, and SDG&E – would love to lose a government-hired competitor, you, the solar panel owner. This subsidy-killing proposal is also supported by people associated with fossil fuel companies and “free market” advocates.
And then there are some people who argue that the system is harming the low-income Californians. Incidentally, the new rules would protect certain low-income households from the financial pain of reduced subsidies.
To be fair, there is some truth to this logic. Incentive work and those who benefit from solar subsidies are better paid Californians.
Why the demographic gap? Because the systems aren’t cheap and homeowners tend to be a more affluent group of the population.
You see, your neighbor (and I) don’t get an electricity contract until you’ve spent a lot of money building a mini power plant on our roofs.
These systems, which have become more powerful and cheaper over the years, still cost nearly $ 16,000 after one-time federal tax incentives were introduced, according to SaveCaliforniaSolar. And solar investments by 1.2 million real estate owners produce around 7% of California’s electricity to date.
Yet this urge to get solar homeowners to “pay their fair share” does not take into account the total cost of modules, inverters, and installations required to collect and distribute power from a roof.
And why only choose solar roofs? Should every energy-smart homeowner have to pay higher prices just to offset the electricity bill for the average consumer or an energy-guzzling neighbor?
The destruction of the solar subsidies would create a new state policy that abolished a system of neighbors that subsidize neighbors. So what about the enormous injustice of the basic control equality of Prop. 13?
Why should the tax rates be based on the time of purchase and not on the current market value of a home?
Yes, incentives work: The “subsidy” of Prop. 13 to long-term owners contributes to a low resettlement rate by the state.
The bottom line
Homeowners with solar panels have enjoyed seeing their rooftop investment amortized through savings in electricity bills – but the breakeven point typically lasts around six years, says SaveCaliforniaSolar.
If the CPUC approves the size of the rate hike, breaking even point would take 14 years. From a financial perspective, solar roofs would be a poor choice for homeowners.
The new rules could also undermine another boost in solar energy. Starting in 2020, home builders will have to incorporate green energy systems into most new California homes. The shrinking profitability of such installations created by the CPUC plan could give developers an excuse to opt out.
Look at Nevada. When state regulators almost cut subsidies at the behest of utilities in 2015, solar systems were immediately cut in half. Two years later, the legislature stepped in and restored the incentives. Installation growth then restarted.
If California stops or slows development of new solar panel systems, the state’s utilities will have to find other ways to meet growing electricity needs while meeting higher clean energy limits. Can they do it better or cheaper than roofing – and without covering square kilometers of desert land with panels?
And no matter what the power substitution is, do you want to bet on who will end up paying for it?
With the world’s climate problems an ever-increasing threat, the abolition of solar subsidies will turn the state’s breakthrough goals of achieving all-green electricity by 2045 into an even more elusive and expensive dream.
Jonathan Lansner is a business columnist for the Southern California News Group. He can be reached at [email protected]
FILE – This photo, taken on Wednesday February 12, 2020, shows solar panels on the roofs of a housing estate in Folsom, California. State regulators, the California Public Utilities Commission, are expected to propose reforms that would lower financial incentives for homeowners who install solar panels. (AP Photo / Rich Pedroncelli, File)[/caption]