Rooftop Solar Inequity or Net Metering Goes Grrr

Brian Bartholomew tweeted this out around 3 pm on a sunny autumn afternoon (October 13, 2021) along with the message, "CAISO right now"

I ran over to CAISO's real-time prices page and saw this:

If you were buying or selling electricity then, you would have paid $0.41 per megaWatt hour, or $0.041 per kWh.  

Under Net Metering, owners of rooftop solar panels who are producing more than can use can put it on the grid and be credited against their electricity use from the grid for anytime between 7AM and 5 PM.  The problem is that electricity prices fluctuate quite a bit. Here's another graph from @BPBartholomew. 

Say your panels are on the west-facing side of your roof and don't generate any electricity in the early morning hours you are getting ready for work/school.  You use your credited kWh banked during midday and don't have to pay for the energy.  Say you (or your kids) come home after school and turn on the air conditioning; you can crank away between 4:00 and 5:00 PM against your credits. 

A Southern California Edison (SCE) customer under the Time of Use (TOU) Prime plan, users without credits would pay 48 cents (Jun-Sep) or 45 cents (Oct-May) for that electricity.

Sometimes, net electricity costs can be negative.  You can be paid to take electricity and move it out of a congested grid. Do you have a big bank of batteries near Los Banos?  If so, you can be paid to charge your batteries tomorrow and then sell them during the evening duck curve.  It's called Energy Arbitrage. 

Meanwhile, in Los Angeles, the owners of rooftop solar panels selling electricity to SCE (which is forced by the CPUC (California Public Utilities Commission) to take it (even if they don't want/need it), can feed electricity into the grid worth 41 cents/megaWatt-hour or 0.041 cents/kWh, get credit for it, and use that 1 for 1 to offset electricity use in the evening, when it's worth 1000x that.

There is no point in me belaboring this; just read Severin Borenstein's Rooftop Solar Inequity.

I wrote a Net Metering Fact Sheet after reading lots of books, reports and government documents about how electricity is generated, moved around, regulated, purchased and used. I'm sure it will get angry comments from the people who are benefiting the most from California's current Net Metering policies. It's important to know that academics, government scientists and CPUC agree that overall, people with rooftop solar are benefitting at the expense of those without.

This "Energy Waterfall" plot showing the different 2019 costs for the three largest electricity providers in California from Ensuring Equity in California’s Energy Transition was very convincing. Look at the right-most column of Public Purpose Programs.  The thin green slice is aid for low-income customers under the CARE program. The fat brown slice is payment to PV owners (solar rooftop) under the current net metering scheme. 

 

Here's the detail of CARE and PV subsidies. We spend more subsidizing rooftop solar owners than low-income electricity users.  A lot more.

Who benefits from rooftop solar?  People who own their own homes and don't need to obtain HOA approval. That's basically people who live in Single Family Homes and have enough cash or home equity to purchase solar systems. They tend to be much wealthier than those who subsidize them.  (I know that lower income people have been growing among the rooftop solar owners, but that is largely because they were pushed out to live in new homes built in the deserts.)

That cost-shift from rooftop solar owners to those without is about $2 billion in 2019 and growing.

This post grew too long, so I split it up into another one explaining the Duck Curve and California's renewable energy portfolio. Stay tuned.