I’ve seen a few people breathlessly write articles and letters to the Desert Sun about how terrible it will be if people with rooftop solar are forced to pay their fair share of costs of electricity.
They all have an agenda. Let me lay out what’s really going on.
California’s Net Energy Metering program, or NEM, is a state program that subsidizes people who put rooftop solar on their homes. Guess who pays for those subsidies? Everyone else without solar, including seniors on fixed incomes, low-income customers and renters.
We can all agree that rooftop solar is wonderful and it will continue to be a major part of California’s clean energy mix. But the current NEM program is unfair and needs reform.
Today, everyone in California without solar panels is paying on average $200 more a year in utility bills to cover costs that should be paid by homeowners with rooftop solar. In the Coachella Valley, more than 129,000 households are on the low-income utility bill assistance program, CARE, and if they don’t have solar panels, they are paying higher bills simply to support people who do.
NEM was established in 1995 when solar panels were very expensive, not very popular, and homeowners needed generous subsidies or credits to be convinced to take the plunge and put solar on rooftops. While adoption has progressed, the generous subsidies remain, have outlived their initial purpose, and create significant inequities.
Because of the generous bill credits given for selling excess electricity back to the grid, homeowners with solar panels are paying only nominal, and sometimes even zero utility bills each month. Thus, they are not paying what they should for things we all have a stake in, like maintaining the electric grid and important state programs that support low-income customers. Those costs that once were shared equitably by all customers don’t go away, they just get shifted to those without solar panels.
Today the NEM cost shift is about $3 billion a year. If left unchecked, that cost shift will grow to $10 billion a year statewide and about $500 a year per customer without solar by 2030.
In the 25 years since NEM started, costs for rooftop solar technology have decreased 70%. Yet the credits customers with solar receive continue to increase. What other product sees its subsidies INCREASE as the cost of the product decreases?
These inflated subsidies mean Californians can pay off an average-sized rooftop solar system in less than five years but continue to collect these generous credits for 20 years. That’s great until you realize that those bill discounts are being paid by customers who either can’t afford or don’t have the ability to install rooftop solar panels themselves.
It’s not surprising that the corporations selling rooftop solar are strongly opposed to any significant changes to NEM. Better alignment of bill credits with the reduced cost of solar panels and today’s lower cost for solar energy bites into their profit margins.
It isn’t fair to continue a program that is so inequitable, unbalanced and unsustainable. Without reform, NEM will continue to needlessly drive-up electricity bills in California for millions of Californians without solar panels.
Nan Brasmer is president of the nonprofit California Alliance for Retired Americans.