TROUBLE OVER MILLION SOLAR ROOFS

According to Paul Scott of EE Solar, the “glitch” is that the Million Solar Roofs initiative requires purchasers of solar systems to switch from a standard rate per kilowatt-hour, something like 12 cents, to a TOU rate. TOU rates vary; they are higher when energy is in high demand, sometimes 2, 3 or 4 times higher. This means that during hours of peak energy consumption solar owners’ rates might suddenly be 2, 3 or even 4 times higher than they used to be. If they have a system that does not provide 100% of their electricity in these peak use periods, they will have to pay for electricity from the grid. Adding this marginal but much higher-priced electricity to the costs they are already meeting to pay off the solar system, the cash outflow might end up being higher than simply paying the utilities for their electricity.

These problems especially plague Central and Southern California Edison customers, a potentially huge population (13 million customers) which instead of being incentivized is being DISincentivized (or, in street parlance, “dissed”). It is so discouraging as to leave some solar industry veterans wondering if there is not some “method” to the initiative’s “glitchy madness.” After all, utilities like Edison are in the business of selling electricity. Wouldn’t it be bad for business to have so many consumers making most of their electricity at home?

Rebate rule chills solar sales; Installers fear collapse as many homeowners choose to avoid associated higher utility costs
Marc Lifsher, May 8, 2007 (LA Times)

WHO
California homeowners, California solar system installers, California utilities
Not if they make it cost too much.
WHAT
Rebate requests, a measure of the number of solar systems being installed, are DOWN 78% under Governor Arnold Schwarzenegger’s “Million Solar Roofs” initiative, legislation aimed at spurring solar installations.

WHEN
The California Solar (Million Solar Roofs) Initiative (CSI) became law in January. Solar industry representatives lodged a formal petition to correct the “glitch” in March. Some experts say the solar industry has no more than 100 days if the problem isn’t solved.

WHERE
California.

WHY
New requirements, under the solar initiative, require consumers with solar systems to pay for supplemental electricity purchased from the grid at high “time of use” (TOU) rates. This drives UP utility rates, making the system harder to pay for and tipping buyers’ inclinations away from system installations. The Public Utilities Commission (PUC) claims this was an “unintended glitch” and claim they are working to fix it.
1st 3 months, 2006: 6,417 kilowatts solar energy rebates; 1st 3 months, 2007: 1,415 kilowatts solar energy rebates.
Governor Schwarzenegger’s office says they are working to answer the solar industry’s March petition and rectify the problem, demanding the three investor-owned utilities correct the rate systems. The PUC and the involved utilities, especially Edison, are trying to undo the trouble though they seem reluctant to dispense with the TOU rates.
It's up to you, Gov
QUOTES
- Sue Kateley, executive director, California Solar Energy Industries Assn.: "It's a mess…It was everyone's intent to expand the use of solar in California, not throw it into the ditch."
- Pat Conlon, Palm Desert energy-efficiency expert: "The solar industry in the desert in the Southern California Edison territory is dead until this thing is fixed…As of Jan. 1, there have been no new installs."
- Michael R. Peevey, California PUC President: "The fact that some customers may find themselves paying higher electricity bills if they decide to install solar … is unfortunate and indeed perverse…"
- Patrick Redgate, owner, Ameco solar installation: "We've come to the conclusion that we can no longer sell to a good percentage of potential clients because they don't have a roof that is big enough…This is kind of a punishment for people going solar."
- Glenn Harris, energy consultant, says the residential market for solar installations in California could collapse in 100 days: "If they don't make sales in the next two or three months, they'll have to lay their guys off and say, 'I'm sorry'…"
- Bernadette Del Chiaro, Environment California: "These are very real problems…Nobody foresaw the outcome would be a whole set of consumers basically priced out of the market."