Electricity prices rise in California, and energy companies point to rooftops: too many solar panels

Electricity prices in California were already among the highest in the United States. What’s alarming is that it continues to grow even though California is the country’s renewable powerhouse. Eager to find blame, some energy companies have pointed the finger at the growing number of Californians who have solar panels installed on their roofs.

Context. California leads the adoption of solar photovoltaic energy in the United States. Last year, 20% of electricity was generated by solar panels. In addition, it was the state that most subsidized the installation of self-consumption modules, and in the past even distributed them.

Today, so many Californians have solar panels on their roofs that the electrical grid often cannot use all the energy generated. With 47 GW of installed capacity, enough to power nearly 14 million homes, solar energy production exceeds demand on sunny spring days and is often wasted. This oversupply, caused by poor flexibility of the electrical grid, has led to negative electricity prices during certain periods, forcing the government to cut incentives that have encouraged solar panel installations for decades.

Now electricity tariffs have increased. Some electric companies argue that solar panel users are responsible for the increase because they pay less on their bills, leaving other customers to bear more of the burden of the grid’s fixed costs.

This phenomenon is called “cost shifting” and emphasizes that those with more pay less to electric companies because they generate some of their own energy. As a consequence, users who cannot install solar panels must cover the fixed costs of the electrical system (infrastructure, grid maintenance, etc.) by paying higher rates.

Why the distribution of expenses is not fair. The electricity bill is designed to reimburse both the variable costs (electricity consumed) and the fixed costs (infrastructure and operation) of the network. However, all these costs are calculated based on consumption.

Because solar panel users consume less, they pay lower bills overall. Instead, households without solar panels (often with lower incomes) end up paying more to cover the fixed costs that power companies don’t recover from solar customers.

What electric power companies are hiding. And we’re not talking about the better-known benefits of self-consumption, such as reducing carbon emissions, offloading the grid during demand peaks, and accelerating the energy transition, either directly (through renewable energy generation) or indirectly (through electrification). technologies such as electric vehicles and heat pumps are more attractive).

According to photovoltaic energy advocates such as Ahmad Farooqi, electric companies are ignoring the inefficiencies of the power grid and the companies that sell the light themselves. Cost overruns, exorbitant executive salaries, and a lack of interest in promoting a solution to solar PV’s intermittency problem: battery storage systems. Batteries can relieve the grid during peak demand and prevent blackouts.

Make self-consumption more accessible. The changing costs are compounded by incentive cuts because they prevent middle-income families from adopting the technology. It would be desirable for everyone to be able to install solar panels on their roofs without hindering their own consumption.

But since we don’t live in an ideal world, the most urgent alternative would be to rightly address fixed costs and improve grid flexibility and efficiency without impeding the adoption of clean technologies.

Image | Pexels

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