California Deficits Force 3rd Slash in Solar Subsidies
The Newsom Administration that ran up a $75 billion deficit this year and expects $30 billion deficits for each of the next four years, has just slashed solar power reimbursements and subsidies for the third time in the last year
California in 1995 passed energy regulatory rules called Net Metering, that established a framework for electric utilities to buy “excess solar energy” at the full retail prices from individuals that installed roof-top solar systems.
The goal was to end fossil fuel use by converting 100% of California’s energy production to renewables and achieve zero-carbon footprint by 2045. But lavish solar subsidies were later extended to multinational corporation owners of “stack and pack” Section 8 apartments, to supposedly ensure that at least 51% of the energy derived from solar ownership served disadvantaged customers.
About 1.5 million California homes with installed rooftop solar systems now receiving Net Metering subsidies for supplying about 10% of the state’s electric demand. But over 14% of the state’s electricity in supplied by large-scale corporate solar projects.
California historically had some of the lowest cost electric rates in the nation, but residential retail customers after the implementation of green energy subsidies, now pay an average for electricity of 32.47 cents per kilowatt hour. That is the highest rate in the continental United States, and about 100% more than the national average of 16.68 cents per kilowatt hour, according to the U.S. Energy Information Agency.
California Public Utilities Commission (CPUC) Director Matt Baker recently disclosed that the subsidies in 2021 increased the costs for California electric customers who did not have rooftop solar by $3.37 billion. That number is projected by the CPUC to grow to $4.5 billion this year.
Baker stressed that San Diego Gas & Electric customers without rooftop solar pay about 20% of their bill to cover solar subsidies; for Pacific Gas & Electric customers it’s 12%; and for Southern California Edison ratepayers it’s about 11%.
The CPUC Public Advocates Office analysis argued that solar “customers should pay their fair share of grid, wildfire, and other related costs.” The report highlighted that: “Customers with rooftop solar depend on the … grid to use electricity when their rooftop solar systems are not generating electricity. The compensation that (solar) customers receive is greater than the value of the energy.”
Utility companies have complained for years that the Net Metering retail rate they have been paying solar customers for their excess power is too high and doesn’t reflect the value of their power, which is produced during daytime hours when grid demand is low.
The PUC had already cut the Net Metering rates twice this year. But with the state hemorrhaging cash, the PUC for the first time voted 3-1 to not fund another $250 million Solar For All grant that would mostly benefit big corporate apartment owners
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