Just because a utility says it, doesn't mean it's true

Did you read this article in Bloomberg about how rooftop solar is costing California ratepayers BILLIONS!!!!???  Then you should know it’s largely horsemalarkey.

What the article doesn’t say is how the utilities arrive at their figures–but based on previous assertions, we think it’s safe to assume the approach is grievously flawed.   Let’s take a look behind utilities’ net metering ‘math':

1. The overall amount of solar power “impacting” the grid is inflated by up to 80%: Utilities count all solar energy generated by the net metered customer as a cost that someone else has to pay for…but 50 to 80% of that power is used on-site without ever touching the utility’s grid. Just like energy efficiency, solar power that’s used on-site places no burden on the utility system, and yet utilities are accounting for it as if it’s a cost. This is exactly like saying that when a customer turns off her lights, she should have to pay for the power she doesn’t use.  It’s an absurd claim.  Only excess generation that’s exported to the grid should be included in net metering cost/benefit calculations.

2. The price at which they’re allegedly crediting net metered customers is inflated by up to 40%: In California, residential rates are tiered in increasing blocks: the more power you use, the more the electricity costs on a kWh basis. By going solar, most customers get bumped down to a lower tier – this is the level at which they receive net metering credit. Utilities have assumed that net metering customers are always credited at the highest rate tiers. If you look at actual data from real-world monitored production, the reality is the utilities are inflating the actual average bill credit by 18 to 40%. Again, it’s an egregious cooking of the books.

3. Their “cost-benefit” analyses leave out a major piece of the equation: the benefits.  A net-metered solar owner puts up her own money to buy and install an emission-free generating system that provides high value power — and saves everyone else a lot of money. An honest accounting would weigh both sides of the ledger.  Those overlooked ratepayer benefits include:

  • Solar correlates well with system peak demand, thereby reducing the amount of the most expensive electricity that utilities would otherwise have to buy
  • Reducing the need for investment in transmission & distribution infrastructure to move electricity from power plants to customers
  • Reducing transmission losses of moving electricity around the grid
  • Saving on the cost of meeting California’s carbon and renewable requirements

In short: the utility numbers aren’t fact-based, they’re a red herring. Utilities are rushing to derail one of our most important solar programs, and they are doing it with some mighty fuzzy math.

The California Public Utilities Commission has launched an official investigation into the costs and benefits of net metering.  We’ll be ready with a comprehensive, fact-based analysis that relies on data, not drama.  We’re even holding a webinar on the subject: register here.

If utilities want to talk about unfair cost shifts in the interim, may we suggest a few promising directions?  To wit:

  • The out-of-service San Onofre nuclear power plant cost SCE ratepayers $820 million in 2012 alone – it’s not delivering a single kWh, yet it accounts for over 8% of the average residential ratepayers’ bill.
  • California utilities demanded the ability to build their own solar power plants—and get to pay themselves up to 26 cents/kWh for the power they produce.  But if a customer generates a little extra from their rooftop solar system (beyond what is net metered, as per AB 920)?  They get paid the same, right?  Wrong.  Utilities  pay only ~4 cents per kWh for that, despite the fact that it’s high value power, delivered inside of distribution networks, when the grid needs it most.

The assault on rooftop solar can’t be explained by a good-faith concern for the well-being of ratepayers. The truth of the matter is that net metering is good for California ratepayers, economy and environment – and the interests of a few utilities should not outshine the rest of us.