A high-stakes battle is under way over the future of rooftop solar energy in California. On one side: Current and future rooftop solar consumers in the nation’s leading solar state. On the other, the state’s big three investor-owned utilities — PG&E, Southern California Edison and San Diego Gas & Electric.
The utilities have petitioned the state Public Utilities Commission to slash by more than half the credit they must pay customers for excess energy generated by rooftop solar panels. They also want to charge new rooftop solar customers nearly $70 a month just to hook up to the grid.
The PUC will hold hearings on this petition beginning July 26. The final decision, due by the end of the year, could cost solar ratepayers millions, essentially destroying the rooftop solar market in California.
Rooftop and other small solar projects are an important part of the state’s future energy grid, not just benefiting their owners, but providing stability, resilience and key services to everyone. Given rooftop solar’s importance to us all, it is extremely disappointing that the California Public Utilities Commission unanimously voted last month to significantly reduce the value small-solar owners are credited for their energy contributions to the grid.
The decision will discourage — or even destroy the market for — rooftop solar on existing roofs. It also raises the question of whether it will keep the state’s electric grid from reaching its goal of distributing 100% clean (nonfossil fuel) energy by 2045, as required by law.
The commission maintains an incentive structure that pays Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric to do the wrong thing. The commission needs to rethink what is best for California and encourage more rooftop installations, which provide essential benefits, such as keeping energy flowing locally during outages. They are the fastest route to 100% clean energy in the state.
These millions of rooftop systems can act in concert to supply energy during peak demand, eliminating the need to power up or build new, inefficient, “peaker” electric generation plants. Less dramatically, rooftop systems allow solar owners to reduce their own grid use during high electric demand.
Ivan Penn, THE NEW YORK TIMES
When demand exceeded supply in a recent heat wave, electricity stored at businesses and even homes was called into service. With proper management, batteries could have made up for an offline gas plant.
Last month as a heat wave slammed California, state regulators sent an email to a group of energy executives pleading for help. “Please consider this an urgent inquiry on behalf of the state,” the message said.
The manager of the state’s grid was struggling to increase the supply of electricity because power plants had unexpectedly shut down and demand was surging. The imbalance was forcing officials to order rolling blackouts across the state for the first time in nearly two decades.
What was unusual about the emails was whom they were sent to: people who managed thousands of batteries installed at utilities, businesses, government facilities and even homes. California officials were seeking the energy stored in those machines to help bail out a poorly managed grid and reduce the need for blackouts.
Many energy experts have predicted that batteries could turn homes and businesses into mini-power plants that are able to play a critical role in the electricity system. They could soak up excess power from solar panels and wind turbines and provide electricity in the evenings when the sun went down or after wildfires and hurricanes, which have grown more devastating because of climate change. Over the next decade, the argument went, large rows of batteries owned by utilities could start replacing power plants fueled by natural gas.
But that day appears to be closer than earlier thought, at least in California, which leads the country in energy storage. During the state’s recent electricity crisis, more than 30,000 batteries supplied as much power as a midsize natural gas plant. And experts say the machines, which range in size from large wall-mounted televisions to shipping containers, will become even more important because utilities, businesses and homeowners are investing billions of dollars in such devices.
As the lights went out across California this month, residents wondered if we will ever fix PG&E — the nation’s largest for-profit electric utility.
Some predictably joked that we should simply unleash the power of that mythical institution, which some economists still refer to as the “free market.” But PG&E’s latest failure illustrates that markets — and how well they work for consumers — always depend on state regulation. For this reason, California must use the crisis to deeply reform its utility regulations.
A critical regulatory choice for any market is the allowed forms of ownership for organizations that sell goods in the market. California’s courts, lawmakers and regulators are confronting this very issue as PG&E seeks to emerge from a bankruptcy that stems from its responsibility for recent wildfire catastrophes. The specific questions are: Who will own PG&E? How much control will regulators give them? And how much profit can owners extract from the utility?
Any changes to PG&E’s ownership will have big consequences for consumers and communities as California tries to transition to a carbon-neutral power grid. So, policymakers should take into consideration the latest social science on how the form of ownership will affect both consumers and society.
The first big lesson from recent research is about who should not be allowed to own PG&E – namely Wall Street. Gov. Gavin Newsom and other policy players should take every step necessary to block a consortium of 24 private equity and hedge funds that are currently attempting a hostile takeover of PG&E. Why?
The interests and track record of the investors trying to take over PG&E speak for themselves. These types of funds explicitly seek to extract windfall profits from the companies they acquire, with little concern for the long-term economic viability or social importance of the company. It is telling that PG&E’s largest current group of shareholders are Abrams Capital, Knighthead Capital and Redwood Capital — a rival alliance of hedge funds that is trying to maintain control after running PG&E into the ground just 17 years since the company’s last bankruptcy.
Private equity and hedge fund ownership is especially pernicious in sectors with large public subsidies and little competition. For example, my colleagues and I show in a forthcoming article for the Review of Financial Studies that investor ownership has had dire consequences in the for-profit college sector. When federally subsidized for-profit colleges are owned by outside investors, we find that they are more likely to increase student loan debt, cut faculty-student ratios and engage in fraudulent recruitment.
Dan Farber, LEGAL PLANET
Conservatives keep repeating the same arguments, even though the facts have changed.
There used to be some fairly plausible arguments against fighting climate change. I don’t mean crackpot theories about hoaxes or the “I’m not a scientist” hokum. Instead, the arguments I have in mind could be made with a straight face by serious people. I don’t think these arguments were ever truly persuasive, but they weren’t nuts.
You still hear a lot of these arguments today, often from conservatives claiming to take more nuanced positions on climate change. But these arguments have gone stale over time, as the facts on the ground have shifted.
Anyone who makes these arguments today just hasn’t done their homework. Here are these ghost arguments, which are living well past the time they should have gotten a decent burial. “There’s too much uncertainty.” The IPCC’s first report 1990 expressed confidence that greenhouse gas emissions would cause global warming, but also found that warming up to that point had been within the range of normal variation. The most recent 2014 report – which is five times as long, reflecting a far larger body of research – found that warming had progressed to the point of being unmistakable, and well outside the range of natural variation: “Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia. The atmosphere and ocean have warmed, the amounts of snow and ice have diminished, and sea level has risen.” “China won’t act.” Chinese emissions rose exponentially along with its economy. China refused to agree even in principle to any caps on emissions. So it may have been a reasonable argument that U.S. action would be futile and would give China an unfair advantage. But that argument is well past its “sell by” date. In the Paris Agreement, China agreed to peak emissions by 2030 and committed to interim actions in the meantime. Change has proceeded more rapidly than expected, due to declining prices for renewables, efforts to curb deadly air pollution from coal use, and shifts in the Chinese economy away. In January, China cancelled plans to build over a hundred coal plants. It now seems possible that Chinese emissions have already peaked or will do so no later than 2025. “Cap-and-trade will crush the economy.” California has had an emission trading system for five years. The economy has been growing and adding jobs over the same periods. The EU and the Northeastern states have their own, less ambitious trading programs. Again, no observable economic ill-effects. “Renewables will break the grid.” Since they depend on the weather, solar and wind are more variable as power sources than nuclear or fossil fuels. At one time, that looked like it might be a big problem – an issue that Rick Perry seems to be trying to resurrect. But this problem is looking a lot more manageable than it used to. California utilities are required to get 33% of their power from renewables. Somehow the lights have stayed on, day and night, regardless of weather. Germany has had a huge increase in renewables without causing any decrease in grid reliability. Better grid management is much of the reason, including demand response (paying selected users to reduce power use when necessary). These techniques have their limits, and we will probably need much greater energy storage capacity at some point when fossil fuels are pushed out of the generation mix. But even without technological improvements, electric cars offer an appealing combination of low-pollution transportation and energy storage capacity. “Renewables are unaffordable.” The high price of renewables compared to cheap goal or natural gas seemed to pose a big obstacle to addressing climate change. The gap is much smaller today, and economic parity does not seem far away and may already have been arrived. According to a report from the World Economic Forum, Just ten years ago, generating electricity through solar cost about $600 per MWh, and it cost only $100 to generate the same amount of power through coal and natural gas. But the price of renewable sources of power plunged quickly – today it only costs around $100 to generate the same amount of electricity through solar and $50 through wind. Given the economics, it’s not surprising that in countries like India, where cost is a key consideration, more renewable capacity is being added to the grid than coal. I don’t want to exaggerate the ease of moving to a zero-carbon economy. There are still formidable difficulties – but they’re not as enormous as they looked a decade or two ago.
It’s convenient to continue believing in these arguments, especially if you’re worried about the risks of dissenting from your ideological soulmates. But ultimately, it’s the road to intellectual bankruptcy.In short, folks, it’s time to wake up and smell the coffee.
Source: Obsolete Arguments Against Climate Action | Legal Planet
Some of the slowdown in smaller-scale rooftop solar has come in maturing markets in states like California, where rooftop solar companies are having trouble expanding their customer base beyond early adopters.
Over the past six years, rooftop solar panel installations have seen explosive growth — as much as 900 percent by one estimate.
That growth has come to a shuddering stop this year, with a projected decline in new installations of 2 percent, according to projections from Bloomberg New Energy Finance.
A number of factors are driving the reversal, from saturation in markets like California to financial woes at several top solar panel makers.
But the decline has also coincided with a concerted and well-funded lobbying campaign by traditional utilities, which have been working in state capitals across the country to reverse incentives for homeowners to install solar panels.
Utilities argue that rules allowing private solar customers to sell excess power back to the grid at the retail price — a practice known as net metering — can be unfair to homeowners who do not want or cannot afford their own solar installations.
David Roberts, VOX
These are gloomy times for electric utilities. After more than a century of fairly steady and predictable growth, they have entered stagnant waters. Demand for electricity is sluggish. Distributed energy resources (solar panels, batteries, etc.) are chipping away at their market share. Climate activists are always yelling at them for burning so many fossil fuels. It’s no fun.
Despite the industry’s much-hyped “death spiral” — in which customers abandon utilities for distributed energy, prices rise on remaining customers, more customers leave, etc. — these troubles are probably not fatal. Even under aggressive projections, most electricity will come from utility-scale power plants through the middle of the century. Utilities will still be needed. But they do seem to be heading inexorably toward a much-diminished role, with much-diminished profits.
Still, buck up, utility execs, all is not lost! There is a possible future in which utilities become bigger and more important than ever. What’s more, it is a future in which they take the lead in decarbonizing the country.
They could be heroes.
That is the good news in a recent paper from research consultancy The Brattle Group. It outlines a scenario in which utilities thrive, greenhouse gas emissions decline, and everyone joins hands in song.
The key to everything (coincidentally, my long-time obsession) is electrification.