Providing electricity to millions of customers is a zero-sum game for both electric utilities and their customers. The generation, transmission, and distribution of electricity are therefore especially vulnerable to passionate single-issue groups eager to myopically promote their own slices of the energy pie. The complexity of energy issues is an unfortunate dynamic in mainstream news coverage, which typically follows the shallow, well-trodden path when covering the energy slices of that pie. In the case of rooftop solar it’s: Get a quote from a homeowner with rooftop solar, “balance” it with a quote from an electric utility or regulator, and call it good. This simplistic (and ultimately meaningless) view offers a black-and-white snapshot seldom examined in depth and heavily shaded by politics. It has also created an acrimonious divisiveness between residential solar’s (very) vocal advocates and the state’s investor-owned utilities and the regulators charged with providing electricity to the 40-million souls collectively residing in their service territories. You can read all about it most weeks in this very newspaper.
California’s three large investor-owned energy utilities─PG&E, Southern California Edison, and San Diego Gas & Electric─operate under a mandatory “obligation to serve.” As regulated monopolies, these utilities must provide electricity to anyone residing in their vast service territories. Rates are determined in CPUC rate cases, and are based on hundreds of pages that quantify projections of generation, transmission and distribution costs, load growth, emergency response, and virtually every other aspect of generating, transmitting, and delivering the electricity that flows into your home 24/7 at the flip of a switch.
California has gone after renewable energy in a big way over recent decades and state law codifies its promotion and growth. One of those laws obligates a local utility to buy back electricity generated by renewable sources, one of which is rooftop solar. The associated financial perks for wealthy homeowners are huge, including a 26 percent federal tax credit for home solar systems installed by December 31, 2022, a rebate for buying and installing a solar battery along with a rooftop panel system, a property tax exclusion on the added home value from a rooftop solar system, and various cash incentives for installing solar panels in California.
This giveaway dynamic has predictably fueled a boom for solar companies that install rooftop solar, especially in rebate-rich California. But it’s not a boom that benefits everyone. As one example, salary.com reports that rooftop solar installers earn an average annual salary of $33,982, about half of HUD’s low-income guideline; that’s officially a poverty wage in California. Contrast this with a PG&E journeyman lineman’s average pay of $132,544 (a living, union wage). Starry-eyed “environmental” pro-solar supporters might well ask themselves what exactly they’re supporting when they shell out upwards of $15,000 to companies that pay poverty-level wages to their employees, who toil atop the roofs of wealthy homeowners.
So who is eligible for this heavily subsidized largesse? Rich people, of course. For starters, the U.S Census Bureau’s American Community Survey for 2019 (the most recent year available for state-level data) found that California has the second-lowest homeownership among all states at 54.9 percent. (New York is first at 54 percent.) According to the renters’ rights organization Tenants Together, 16,906,728 Californians, or around 45 percent of us, are renters. So at least half of us who are renters are ineligible for rooftop solar right off the bat. Add to that the fact that, according to the Community Associations Institute, California now leads the nation with 49,200 associations, typical of condo ownership, much of which is also ineligible for rooftop solar, for a variety of reasons.
These stats matter because of the zero-sum energy pie. Wealthy homeowners installing rooftop solar are essentially supporting a low-wage private industry while effectively stopping payment to their utility, which then in turn makes up the difference by increasing rates for the remaining customers without either the ability or the means to install rooftop solar (which in California runs an average of 15 grand). In other words, these homeowners no longer contribute a dime to utility call centers, environmental programs, vegetation management, salaries, emergency response, and a thousand other costs associated with providing electricity to millions of Californians. It’s no less a subsidy for the rich than the tax breaks, home mortgage write-offs, and thousands of other programs that disproportionately benefit them at the expense of the poor. In this way, the private-home renewable-energy-promotion scheme contributes to California’s wealth divide as poor and low-income utility customers pick up the tab for rich customers who thumb their noses at their utilities and give their energy dollars right back to themselves in the form of utility payments for the excess electricity they generate but don’t need. Lest we forget amid all the pro-solar hype, the Census Bureau reported recently that “California still has the highest level of functional poverty of any state, averaging 18.2% of its 40 million residents impoverished during the three preceding years.”
Yet the myth persists that installing rooftop solar is all about taking a courageous stand against climate change and supporting the environment. And, as with all true believers, rooftop solar advocates are now whipping themselves into a frothy outrage now that the CPUC is belatedly considering applying the brakes to this misguided, short-sighted boon to the wealthy seeking to get even wealthier by doing away with their utility bills.
Hardcore anti-utility believers will never accept any of this, regardless of the quantifiable big-picture unintended consequences in an issue as complex as this one. They’re the ones who condemn a utility’s vegetation management efforts then cry in outrage when one of their own trees has to be trimmed because of its proximity to a power line. It’s me-me-me all the time, with nary a nod to the bigger picture that includes us all, rich and poor.
It’s hard to deal with zealots; it recently happened to me. There is a very impassioned cadre of residential solar promoters in our Bay Area condo community of 10,000 residents. One group came up with a dubious scheme to aggregate rooftop solar for multiple participating units. The fix was in. Perhaps in recognition of my generally recalcitrant nature, several representatives either called or emailed. When I told them I would never support anything that would benefit the rich and raise utility bills for the poor, they clearly thought I was nuts. You mean you don’t want to save money? Are you crazy? No, actually, I’m not. And by the way, not a one even mentioned the environment. It was all about sticking it to the utility and making money.
Sooo…if you really believe in solar, promote utility-scale solar projects that go into a rate base regulated and monitored by the government for the benefit of every Californian who pays an energy bill, regardless of his or her wealth.