Column: California's rooftop solar infighting is a colossal waste of time

California can’t seem to decide whether it wants to maintain its status as the nation’s rooftop solar leader.

Two years after Gov. Gavin Newsom’s appointees slashed incentive payments for newly installed solar systems, there’s a chance they’ll go further, reducing energy credits for utility customers who installed solar panels before the recent changes. That would mean higher energy bills for many of the state’s 2 million solar-powered homes and businesses — and less confidence in a technology crucial to confronting the climate crisis.

Strange as this may sound, California solar installers have been fighting such attacks for more than a decade.

The short version: Investor-owned utilities Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric claim a solar incentive program called net metering has fueled higher electric rates for everyone.

Every dollar the utilities pay for rooftop solar power, they say, is a dollar they end up charging other customers to maintain their poles and wires — poles and wires that serve everyone, solar-powered homes included.

As more Californians have installed solar, the utilities say, the “cost shift” has grown, forcing nonsolar customers, who tend to have lower incomes, to pay higher electric rates to subsidize their solar-powered neighbors.

Solar installers and many environmental activists are far from convinced. They believe utility executives invented or exaggerated the cost shift narrative to protect their monopoly business model.

So who’s right?

If you ask me, everybody and nobody.

The fact is, California needs a lot more solar power. Climate change is accelerating: 2024 was Earth’s hottest year on record by a big margin, and scientists say high temperatures and climate-fueled dryness worsened the recent fires in Los Angeles County. Meanwhile, California still generates roughly 40% of its electricity from fossil fuels.

So it makes me crazy to reread stories I wrote 10 years ago about rooftop solar policy and realize hardly anything has changed. The same people are having the same arguments. Only now, they’re angrier and more stubborn.

The latest iteration of the solar squabble has been fueled by California’s wildly escalating electricity prices.

As the state Legislative Analyst’s Office reported earlier this year, California’s residential electric rates rose by 47% from 2019 through 2023. The increases were especially large for customers of Edison, PG&E and SDG&E.

If it were just the utilities blaming rooftop solar, I’d be skeptical.

But the Utility Reform Network, a consumer group that regularly bashes the utilities for what it considers profit-motivated rate increases, has long agreed that rooftop solar incentives should be pared back. Same goes for the Natural Resources Defense Council. Both groups supported reducing incentives for new solar systems.

The California Public Utilities Commission’s consumer watchdog office estimates that Edison, PG&E and SDG&E customers without solar collectively paid $8.5 billion more for power last year due to net metering.

“Even if you quibble with our $8.5-billion estimate, there is a substantial cost shift,” said Mike Campbell, assistant deputy director of the Public Advocates Office.

The solar industry has done more than quibble.

The California Solar and Storage Assn., an industry trade group, commissioned an analysis from consulting firm M.Cubed scrutinizing the Public Advocates Office’s methodology. Economist Richard McCann, who conducted the analysis, found that rooftop solar actually saved Edison, PG&E and SDG&E ratepayers $1.5 billion in 2024.

“The technical errors are embarrassing for a state agency to commit,” Bernadette Del Chiaro, outgoing executive director of the California Solar and Storage Assn., said in an email.

Again: Who’s right?

I wish I had a good answer. But I mostly find this argument to be a mind-numbing waste of time.

The destruction wrought by the Eaton fire is a reminder of why we don’t have time to keep arguing about solar incentives.

(Gina Ferazzi / Los Angeles Times)

McCann pointed out a few places where it seems reasonably likely the Public Advocates Office overstated the cost shift. But the biggest purported error he identified was really more of a philosophical disagreement.

Of the alleged $8.5-billion cost shift, McCann claimed that nearly $4 billion shouldn’t count, because those dollars are actually lost utility revenue. Basically, utilities are losing $4 billion worth of revenue from electricity they would normally sell to solar customers — if those customers weren’t producing and consuming their own power.

Penalizing solar households for lost utility sales is like “telling somebody who grows lettuce and tomatoes in their garden that they have to pay the grocery store, because the grocery store has to pay their rent,” McCann said.

Only it’s not like that, because people who grow vegetables don’t need the grocery store. That’s not true for solar customers, who do need the utility grid — even if they have batteries. They draw power from the utility grid when their panels don’t produce enough. They export power to the grid when their panels produce too much.

Really, the solar industry is making the same argument it’s made for a decade: that the cost shift isn’t real.

If you dislike investor-owned utilities — and God knows they can be frustrating — you may be inclined to agree. But I don’t think NRDC, the Utility Reform Network and other independent experts are all utility stooges. You can support rooftop solar and also believe the cost shift is a real problem that needs solving.

In a rational world, we’d be done with this argument. Alas, the debate has only grown more toxic.

McCann, for instance, recently engaged in a nasty spat with Severin Borenstein, a UC Berkeley energy economist and regular target of the solar industry’s fury. Borenstein responded to McCann’s critique of his work by accusing him of spreading misinformation; McCann wrote that Borenstein “has apparently blocked me on LinkedIn.”

Like I said, this is all a waste of time. And as I’ve written previously, I mostly blame Newsom.

Gov. Gavin Newsom visits a solar energy and battery storage facility in Winters, Calif., in April 2024.

(Office of Gov. Gavin Newsom)

The governor, to his extreme discredit, has seemed happy to let his appointees slash rooftop solar incentives and watch installations drop sharply. Although he’s largely avoided my requests for comment, I’ve long assumed he’s responding to the immense political pull of the utility industry, and the unions representing utility employees.

Against that backdrop, it’s no wonder rooftop solar installers have dug so deep into their trenches. I don’t blame the solar industry and its supporters for refusing to give an inch on net metering and the cost shift.

If we want to move forward, Newsom and other policymakers and climate advocates who have dismissed rooftop solar need to start accepting what an important role it has to play — for reasons both practical and political.

Some background: For years, many energy experts have considered utility-scale solar farms superior to rooftop solar, because they generate power at a lower cost due to economies of scale. Researchers have also found there aren’t nearly enough rooftops to replace all the coal, oil and gas that the United States burns.

In a January blog post, for instance, UC Berkeley’s Borenstein wrote that he hopes California “won’t waste time in 2025 debating whether to walk back the limited progress we have made rationalizing policy on rooftop solar.”

To me, that kind of thinking is shortsighted.

Rooftop solar is no economist’s dream. But there’s a reason it’s so popular.

Families that go solar win themselves at least a measure of independence from big utilities. They can make their own electricity, reduce their monthly bills and, with a battery, stay powered during a blackout. Solar’s not just for the wealthy anymore, either. The median income for a household installing solar dropped from $141,000 in 2010 to $115,000 in 2023, according to Lawrence Berkeley National Laboratory.

My experience as a journalist has taught me that many Californians would rank rooftop solar as their top climate priority. Throughout my career, there’s been no climate solution that more readers have urged me to write about. No climate solution that has generated more press releases or more comments at the utilities commission.

The lesson: When state officials sabotage rooftop solar, they’re making a huge political mistake.

A Sunrun employee carries a solar panel to be installed on the roof of a home in Granada Hills in 2020.

(Mel Melcon / Los Angeles Times)

When Newsom’s appointees undermine rooftop solar — and the Legislature fails to step in — solar advocates see it as a sign he isn’t the climate champion he claims to be. Or maybe he’s been bought by the utility industry.

If Newsom wants to build support for his other energy priorities — or a presidential run, or anything else — he should come out swinging for rooftop solar. Millions of Californians would be thrilled. He can find other ways to keep utility companies and their employees happy — helping the utilities stay out of bankruptcy, for instance.

And again, California needs rooftop solar to confront the climate crisis. Even Edison has estimated the amount of rooftop and other small-scale solar on the grid will eventually double as the state targets 100% clean energy.

All of which brings us back to where we started.

Last month, Public Utilities Commission staff released a report suggesting that the commission or the Legislature consider lowering electric rates by saddling longtime solar customers with higher utility bills. Maybe those homes could be paid less for their extra solar power. Maybe utilities could charge them a flat monthly fee.

Those are terrible suggestions — partly because they’d discourage solar investment, and partly because the solar industry or its allies could challenge them in court, further extending a debate that badly needs to end.

“It’s of course illegal to change contracts on people,” Del Chiaro said.

The simplest solution — an idea that’s come up again and again as I’ve talked with experts about how to reduce electric rates — is for state lawmakers to spend more money subsidizing rooftop solar, and other policy priorities, out of the state budget. It’s gotten too easy for lawmakers to pawn off climate and clean energy programs to the Public Utilities Commission, leading to simpler budget-balancing but out-of-control electric bills.

When I asked Del Chiaro, though, she was apprehensive. Legislators are notoriously fickle. What if they dedicate a bunch of money to rooftop solar one year, then change their minds the next year? It happens all the time.

I don’t have an easy answer.

But something needs to change. High electric rates are exceedingly unfair, especially for low- and middle-income families. They’re also bad for the climate, because they make electric cars and heat pumps less attractive.

Electric costs are a hard problem to solve; rooftop solar incentives are one of many layers. As I’ll address in future columns, Newsom’s appointees haven’t done nearly enough to rein in utility industry spending and profits.

Solving a problem, though, requires admitting you have one.

It’s time for Newsom, lawmakers and everyone else sparring over solar to sit down and make sure that 10 years from now, California is still the nation’s rooftop solar leader — without burdening all electric ratepayers.

Otherwise, we’ll still be mired in this same agonizing debate. And the world will be a lot hotter.

This is the latest edition of Boiling Point, a newsletter about climate change and the environment in the American West. Sign up here to get it in your inbox. And listen to our Boiling Point podcast here.

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