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California's Solar Roof Law Will Raise Housing & Energy Prices But Do Little to Reduce Emissions


Claudine Van Massenhove

Homeless encampment in Los Angeles, April 2018

California’s new solar roof mandate will make housing more expensive, increase electricity prices, and transfer wealth upwards.

What it won’t do is significantly reduce carbon emissions.

The deployment of solar has been the main driver of high and rising electricity prices in California, which currently produces more solar energy than it can use.

“We already have some of the highest electricity rates in the country, and this will only be exacerbated by this mandate,” UC-Berkeley economist Lucas Davis said. “As more and more rooftop solar gets installed, that pushes the cost onto all the non-solar customers.”

From 2011 to 2017, California’s electricity rates increased five times more than they did in the rest of the U.S.

In recent years, California has had to increasingly dump excess solar electricity on neighboring states and block (“curtail”) the electricity coming from solar farms in order to prevent damage to the electrical grid and/or high economic losses.

California set new records in March and April for solar curtailment.

The March curtailment record was exceptional for how much of the curtailment came from local congestion — a problem that will the new law will likely worsen.

California regulators say a solar roof will add $9,500 in new costs but the average price of a solar roof in California is $19,380.

California is in the midst of the worst housing and homelessness crisis since the Great Depression.

California has the second-most-expensive homes in the nation after Hawaii, and the third-worst state homeownership rate for millennials.

At the current rate California is adding homes, it would take over 100 years of solar roof-building to replace just the clean energy produced by the state’s two nuclear plants.

That calculation assumes the additional costs don’t slow down homebuilding, which they could.

And during that 100 years, all of the solar panels would need to be replaced at least three times, given the degradation of panels.

The California Energy Commission (CEC) approved the regulation with little public debate or discussion, prompting criticism from one of the state’s top energy economists.

“I just became aware … of the proposal,” wrote UC-Berkeley economist Severin Borenstein in an email to CEC Chairman Robert Weisenmiller. “This would be a very expensive way to expand renewables.”

Electricity prices increased 24 percent in California during its solar build-out from 2011 to 2017.

New Solar Will Increase Housing and Electricity Prices

California currently produces 16 percent of its electricity from solar.

Five percent of the state’s electricity comes from solar roofs and 11 percent comes from solar farms — and solar roofs are twice as expensive as solar farms.

California’s top energy economists say the main driver of higher electricity prices is the state’s heavy deployment of solar and other renewables.

 “The story of how California’s electric system got to its current state is a long and gory one,” UC Berkeley economist James Bushnell wrote in 2017, but “the dominant policy driver in the electricity sector has unquestionably been a focus on developing renewable sources of electricity generation.”

Solar makes electricity expensive for two inherently physical reasons. Sunlight is dilute, requiring 10 to 15 times as much materials and mining, and up to 5,000 times more land, than non-renewables.

And sunlight is unreliable, which reduces the value of solar as it becomes a larger part of energy supplies.

Solar’s economic value to the electricity grid declines by half when it reaches just 15 percent penetration, according to German economist Leon Hirth research.

California regulators have spent billions on storage projects over the last decade, but the largest lithium storage facility, Escondido, can only store electricity for 30,000 homes for four hours.

And adding much more storage would only increase electricity rates more.

An additional driver of higher costs from adding solar and wind has been the costs of new transmission.

New Solar Roof Law Will Transfer Wealth from Poorer to Richer

The burden of higher cost electricity and benefits of renewable energy subsidies fall unevenly on Californians.

Between 2007 and 2014, the 40 percent of California households with the highest incomes received three times more in solar subsidies (between $10,000 and $20,000 per household) than the 40 percent of Californians with the lowest incomes.

And California households with over $100,000 in annual income benefitted from energy efficiency subsidies at twice the rate of households whose income was under $50,000.

As Germany deployed high levels of renewables over the last 10 years, it saw its electricity prices rise 34 percent.

Today, German electricity costs twice as much as that in neighboring France.

And a strong correlation exists between wind and solar penetration and household electricity prices in 28 Organization for Economic Cooperation and Development nations (OECD).

California Climate Hype and Reality

Against the hype about its solar policies, California underperformed the rest of the U.S. on reducing emissions.

Carbon emissions rose 3.2 percent in California between 2011 and 2015 even as they declined 3.7 percent in the remaining 49 states.

California’s in-state emissions from electricity generation rose from 33 to 44 million metric tonnes of carbon emissions between 2011 and 2015.

Emissions in US Declined While They Rose in California

In 2016, emissions from electricity produced within California decreased by 19 percent, but two-thirds of that decline came from increased production from the state’s hydro-electric dams due to it being a rainier year, and thus had nothing to do with the state’s energy policies.

Just one-third of the decline came from increased solar and wind.

The fluctuating amounts of electricity from the state’s dams underscore why even hydro, our most reliable form of renewable energy, cannot be relied upon to reduce emissions.

The state is not building any new dams, and the kind of drought California suffered from 2012 to 2017 may become more frequent as a consequence of climate change.

According to calculations by my colleagues Madison Czerwinski and Mark Nelson, it will take 117 years for the new solar roofs to replace the state’s two nuclear plants, San Onofre and Diablo Canyon.

The 117-year calculation assumes 65,000 new 3 kilowatt solar roofs are added annually.

Californians currently install solar roofs on 15,000 new homes per year.

However, only 95 years would be required if the state manages to increase the rate of new homebuilding from 80,000 per year currently to 95,000 homes.

Criminal Investigation of Nuclear Plant Closure

Since he took office in 2011, Governor Jerry Brown and the regulatory bodies he controls have worked to close the state’s two nuclear plants.

In November 2014, agents with the U.S. Department of Justice (DOJ) and the California DOJ raided the offices of the California Public Utilities Commission in a joint investigation of potential criminal activities relating to the permanent closure of, and settlement proceedings for, the San Onofre Nuclear Generating Station (SONGS).

The criminal investigation is apparently continuing.

Between 1976 and 1979, Brown and his allies killed so many nuclear power plants that, had they been built, California would today be generating almost all of its electricity from zero-pollution power plants.

In 2013, California’s top energy regulator — a Brown appointee — made a secret deal to close down San Onofre nuclear plant.

The Brown appointee offered Southern California Edison an electricity rate increase worth $3.3 billion even though San Onofre could have kept operating had the utility simply replaced the new steam generator, which would have cost well under $1 billion.

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