California rooftop solar strategy comes under fire

California will require solar panels on all new buildings beginning in 2020. But some energy experts fear this will result in an oversupply of electricity, especially during the midday hours when the sun is at its strongest. John Dyer reports from Boston.

California set history when it became the first state to mandate rooftop solar panels on all new homes. But the policy is coming under fire by critics who warn that it will lead to higher costs. (Image credit: Greens MPs via Flickr)

Left-leaning California leads the U.S. in green technology. But the Golden State’s recently enacted requirement to force builders to install solar panels on new homes starting in 2020 – the first such mandate in the U.S. – has sparked a backlash from those claiming the plan is waste of money.

Reducing energy consumption

The five members of the California Energy Commission unanimously adopted the new standards on May 9 with the goal of reducing energy consumption in homes by half in two years. Homes where solar panels are inappropriate are exempt from the requirement but must adopt other energy saving measures.

“Under these new standards, buildings will perform better than ever, at the same time they contribute to a reliable grid,” said Commissioner Andrew McAllister in a statement.

“The buildings that Californians buy and live in will operate very efficiently while generating their own clean energy. They will cost less to operate, have healthy indoor air and provide a platform for ‘smart’ technologies that will propel the state even further down the road to a low emissions future.”

$40 per month for $80 in savings

The rules apply to single-family homes and multi-family properties of three storeys or less. Along with a raft of other changes, the commission hopes to take the equivalent of 115,000 fossil fuel-burning cars off the road. Builders put up 113,000 homes in California last year, according to state figures. Around 15 per cent of those homes had solar panels.

The commission estimated that the rule will increase the cost of homes by around $10,000. Homeowners will pay $40 per month more for the panels but save $80 in utility bills. Similar rules go into effect for commercial buildings in 2030.

Praise from environmentalists

Environmentalists praised the commission’s move.

“Thanks to the energy commission, the state is a national leader in energy-efficiency standards,” said Eddie Moreno, a Sierra Club California lobbyist, told the press. “Solar power will reduce reliance on gas plants, improve air quality and cut climate pollution.”

Homebuilders also supported the new rule.

“This adoption of these standards represents a quantum leap,” Bob Raymer, senior engineer for the California Building Industry Association, said in public comments to the commission before the vote. “You can bet every state will be watching to see what happens.”

Critics warn of higher costs

But now respectable critics are lining up and saying the commission has been too hasty.

“Among energy nerds, the mandate has caused much wringing of hands and gnashing of teeth,” wrote Vox.

Severin Borenstein, a business professor at the University of California at Berkeley’s Energy Institute, said putting solar panels on individual homes was a bad substitute to large-scale renewable energy projects.

“I, along with the vast majority of energy economists, believe that residential rooftop solar is a much more expensive way to move toward renewable energy than larger solar and wind installations,” wrote Borenstein in a letter to the commission.
Moody’s Investors Service called the move a “credit negative for the state’s utilities.”

Paying people to consume electricity

That led University of California at Davis Economist James Bushnell to wonder how the state’s utilities will fare as they lose money to customers with solar panels but still must supply power to those buildings without them.

“Even at the utility-scale cost of 5 to 6 cents a kilowatt hour, there is growing concern that the massive commitment to solar in California is creating such a glut of mid-day electricity that prices during the day are plunging, and sometimes below zero,” wrote Bushnell in an op-ed in the Sacramento Bee newspaper.

“We are literally paying people to consume electricity during some midday hours.”

Rooftop PV drives costs down

But other advocates for the policy have pushed back, saying the doomsayers were criticizing the good in favour of the perfect. The solar energy industry will receive an enormous boost from the rule, they argued.

“This policy moves rooftop PV from a niche product with high mark-ups to a standard product with low mark-ups,” tweeted Jonathan Koomey, a California-based energy efficiency consultant, referring to photovoltaic panels.

“It drives costs down by eliminating unnecessary friction and unproductive steps in the install process. And it allows the industry to scale up and eliminate soft costs.”

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