But critics insist the costs of those solar panels are beginning to outweigh the benefits.
Incentive payments to homes with solar, they say, have led to higher electricity rates for everyone else — including families that can’t afford rooftop panels. If so, that’s not only unfair, it’s damaging to the state’s climate progress. Higher electricity rates make it less likely that people will drive electric cars and install electric heat pumps in their homes — crucial climate solutions.
The solar industry disputes the argument that solar incentive payments are driving up rates, as do many environmental activists. But Newsom’s appointees to the Public Utilities Commission are convinced, as they made clear Thursday.
“We need to reach our [climate] goals as fast as we can,” said Alice Reynolds, the commission’s president. “But we also need to be extremely thoughtful about how we reach our climate change goals in the most cost-effective manner.”
When I am having a stroke, I don’t stop and calculate of the most cost effective treatment options. I go to the emergency room. We could have done this calculation in 1970 and acted, but that ship has sailed.
Yes, yes, those are all very good points.
Another very good point is “taxes”.
A centralized project necessarily involves regular (monthly) transactions between a seller and a buyer. That involves metering expenses. Accounting. Billing. Collections when some of your customers don’t pay their bills. Losses, when collections don’t work. A legal department. The liability associated with having deep pockets in a litigious society. Inflation: your costs are going to be rising on a regular basis to keep up with it. Managers and supervisors. An HR department. A CEO, board of directors. Shareholders.
And, of course, every kWh you sell is taxed by the government, every bill, every month. That just isn’t true of a personally-owned solar panel.
You have a wide variety of continuing operational expenses associated with all those transactions you have to conduct between your centralized project and the customer. Those made sense with fossil fuel generation: a small, household generator has a high fuel bill. A central facility can buy fuel cheaper, and their larger engines are more economical. That margin leaves a lot of room to fund the additional overhead needed to sell power to the consumer.
But, if he has free fuel available (virtually nil operating costs) at home, all those efficiency gains are irrelevant: he can still be cheaper while being less efficient.
Save the centralized projects for things that rooftop solar can’t do: distribution, storage, etc.