With Diablo Canyon closing, this is not the time to jack up the cost of rooftop solar

Alice Reinheimer was an early adopter of rooftop solar; she installed solar panels on her San Luis Obispo County home 16 years ago.

“We wanted to produce clean power because we really believe in it,” she said.

But not everyone is so altruistic.

“A sense of climate duty isn’t enough to motivate everyone,” the Sierra Club says in a position paper. “For many customers, electrifying their homes and buildings won’t happen unless it can save them money.”

So far, that incentive to save has been paying off for the environment; an estimated 1.3 million homes in California are now solar powered. Rooftop solar supplied 9% of the state’s electricity in 2020, compared to around 8% from Diablo.

But the generous savings solar customers have been enjoying could be drastically curtailed if a proposal by the California Public Utilities Commission is adopted.

On top of that, this is happening just as Diablo Canyon, California’s last nuclear power plant, is gearing up to close.

When the plant shuts down in 2024-25, the grid will need to replace that nuclear power with clean energy, plus add enough additional green power to meet California’s ambitious goals of reaching 100% clean electricity by 2045.

California’s growing rooftop solar industry — which has led the nation in installations — could stagnate if the CPUC slashes incentives.

“It seems like it’s going to really shut down the whole rooftop solar industry, just at a time when it’s really taking off,” Reinheimer said.

For a state agency to even consider such a move at this time shows a stunning lack of urgency in the battle against climate change.

Why do it?

Utilities like PG&E have long supported revising current incentives for rooftop solar, and in December, the CPUC issued a proposal that does exactly that.

It includes a drastic reduction in the amount of credit solar customers receive for the surplus power they return to the grid during daylight hours; some estimate the amount of credit solar customers receive could decline by more than 80%

It’s that credit that’s kept bills for solar customers low; Reinheimer says her bills are around $50 per month.

The CPUC proposal also adds a monthly fee for grid maintenance that would average between $40 and $50 for most customers.

Equity is the No. 1 reason given for the major overhaul of the rate structure; the generous incentives offered to solar customers are now being shouldered by non-solar customers.

The Natural Resources Defense Council (NRDC) reports that the state’s lowest-income residents could save $80 to $100 per year if utilities didn’t have to “overpay” for rooftop solar.

If the current rate structure remains unchanged, the inequity will only get worse as more customers go solar, leaving a smaller pool of other ratepayers to pick up the tab for the incentives.

Another argument: The proposed new rate structure would provide an incentive for rooftop solar customers to install battery storage. That would reduce their need to import electricity from the grid during peak evening hours — a win for the environment and a cost savings for solar customers.

That all makes sense, but what the CPUC is proposing amounts to price gouging.

What we need is a compromise — one that provides enough of a carrot to encourage expansion of rooftop solar, while not over-burdening non-solar customers with higher-ever rates.

What environmental groups are saying

So far, the major opponents of the CPUC proposal are employees of rooftop solar companies and homeowners who have solar or are considering it.

Some environmental groups are taking a more nuanced view.

Even staunch rooftop solar supporters like the NRDC and the Sierra Club believe it’s time to revise the current policy, which pays customers the retail rate for power they return grid, even though it costs utilities much less to buy solar power on the wholesale market.

“In California ... the solar industry has matured to a point where a smaller incentive is appropriate...,” writes Katherine Ramsey, staff attorney for the Sierra Club’s Environmental Law Program.

The Breakthrough Institute — a strong advocate for keeping Diablo Canyon operating — also supports a new pricing structure. It suggests paying all rooftop solar customers the wholesale rate for their surplus, but not tacking on an additional monthly fee.

At the same time, the Breakthrough Institute continues to focus on keeping Diablo open, and criticizes clean energy advocates who support Diablo’s closure, yet oppose the CPUC rooftop solar proposal.

“The hypocrisy here is notable, as the same clean energy and environmental NGOs that staunchly oppose keeping Diablo Canyon online are having a fit about the (CPUC proposal),” write Breakthrough researchers Zeke Hausfather and Adam Stein.

There’s no hypocrisy in recognizing that it’s time to take the spotlight off Diablo Canyon and refocus on more realistic ways to fight climate change.

The pro-Diablo lobby should stand down and face reality.

The plant’s owner, PG&E, has made it clear that it plans to close Diablo, and no other entity has stepped up to save it. Plus, Gov. Gavin Newsom’s office has unequivocally stated that he does not plan to intervene to keep it running.

At this point, it makes far more sense to lobby for alternative energy sources than to fight for a lost cause.

What comes next?

The CPUC’s rooftop solar proposal was pulled from the commission’s Jan. 27 agenda, and no new hearing date has been set.

There’s been speculation that the delay was called to provide the opportunity to revise the current proposal or develop alternatives.

We hope that’s the case, because this is not the time to discourage a safe and proven alternative to fossil fuels.

Rooftop solar won’t save the planet, but it is one of the simplest ways to add green energy. It doesn’t require large amounts of land, as solar and wind farms do, and there’s no long, drawn-out permitting process.

One more thing: Unlike the campaign to save Diablo Canyon, there’s a reasonable chance that public opinion could help persuade the CPUC to adopt a compromise.

Solar power coupled with battery storage will be a key component in the transition to 100% clean electricity. It would be beyond foolish for a state agency to jeopardize that.

This story was originally published February 3, 2022 at 6:00 AM with the headline "With Diablo Canyon closing, this is not the time to jack up the cost of rooftop solar."