California Rooftop Solar Is at a Crossroads
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From KQED in San Francisco, I'm Alexis Madrigal. There are different ways of generating electricity, each with its own pros and cons. There are fossil fuels, which can be superficially cheap but emit toxins as well as greenhouse gases. Nuclear power is better for the climate but comes with radioactive waste complications our country has never solved. Even among solar, there's different ways of doing it. Big fields of panels in the deserts or putting them on the roofs of buildings and homes.

Today we're going to talk about the complexities of that last category, rooftop solar, and the effects it has had on California's energy system. It's all coming up next, right after this news.

Welcome to Forum. I'm Alexis Madrigal. There are perhaps 2 million buildings with solar panels on their roofs in California. Solar panels are popular in our state not only because they provide a measure of energy independence from utilities like PG&E, but because the government has incentivized their installation.

We're going to talk about some of the precise policies that California has used and some of the second order effects that have arisen as more people in our state have gone solar. And eventually we'll get to the legislative battles and a crucial legal case before the state Supreme Court. But first, let's lay some foundation with our panel. We're joined by Sammy Roth, climate columnist with the L.A. Times. Welcome.

Thank you. Happy to be here. Also joined by Mohit Chhabra, who is a senior analyst with the National Natural Resources Defense Council, NRDC. Welcome. Good morning. Thank you for having me. And we've got Bernadette Del Chiaro, who is senior vice president for California with the Environmental Working Group. Welcome, Bernadette. Great to be here.

Bernadette, let's start with you. Let's just lay out the state of the facts here in California. How much rooftop solar has been built? How has our adoption compared to other states? Stuff like that. Yeah. I mean, rooftop solar is an amazing, unique California success story. It was literally invented by California scientists, embraced by California consumers, and through bipartisan policymaking spanning four decades, turned into a mainstream energy resource that the whole world has now embraced.

And to date, we have basically put rooftop solar on 15% of our buildings and parking lots, adding 18 gigawatts of clean energy. And put that into perspective, that's four Hoover dams and five Diablo Canyon nuclear power plants combined. It's a lot of clean energy. And to date, we've also built the biggest battery in the world that's hanging on garage walls across the state.

Rooftop solar isn't only for the rich. It's become the favorite home improvement project for millions of low- and middle-income families. Over 50% of solar adopters are families of color. There's seven times more rooftop solar in Fresno than here in San Francisco. And as one former Texas oil worker turned California solar installer recently said to me about rooftop solar...

If it rained oil, you better bet we all put buckets on our roofs. That's the power of rooftop solar. How has it been compared to some other states, like let's say Texas or something, or Florida, you know, other sunny states? Well, California has been up until now really one of the world's biggest leaders in rooftop solar energy.

We are starting to wane in that leadership status and really kind of provide some anti-clean energy leadership right now. States like Texas and Florida are actually starting to pull ahead, removing barriers and not going after rooftop solar, but looking to expand it.

We're talking rooftop solar. Maybe you have participated in people going solar. You've added panels, something like that. You want to talk about it, you can give us a call. 866-733-6786. That's 866-733-6786. You can email your comments, your questions, your issues to [email protected]. Sammy Roth, climate columnist for the LA Times.

Maybe lay out California's policy approach to rooftop solar, because it's kind of easy for people to forget that, you know, 15 years ago, there was basically a negligible amount of rooftop solar. And now here we go. We've got, you know, solar on two million buildings.

Yeah, I mean, this has been building for a really long time. I mean, it's been, gosh, something like 25 years that California has had this since, gosh, Bernadette probably knows the dates better than me. But it was it was a long time ago that California put this net metering program in place where utilities were required to compensate people for the rooftop solar that they generated through their electric bills and that.

helped to bring down the cost of the technology as more people adopted solar and it just became much more widespread. I mean, it took a while to get the first million solar roofs. I think it was 2019 that we hit that one million mark. And then the second million came a lot faster. It was 2019 we got the first million. And then I think it was

Gosh, probably 2024, maybe late 2023. I think it was 2024. Just a couple of years, we hit the second million. So, you know, once the ball got rolling, it started to balloon really quickly. And then when the Public Utilities Commission, Governor Newsom's appointees made that decision, gosh, what was it, two and a half years ago to dramatically reduce those incentives, those compensation rates, installation rates started to drop. But, you know, it was a pretty big success story how we got to that two million. Yeah.

We'll walk through some of this, of course, as well, sort of the scale up and the kind of choppy waters of the last couple of years. But Mohit, just like on a large level, you know, like taking a step back, isn't the installation of two million solar panels on buildings in California sort of on a climate basis, like an unmitigated good? Yes.

rooftop solar has increased a lot and we have a lot more clean energy now thanks to rooftop solar. The issue though, and this is why the policies needed updating, was because of how we

pay for electricity in California and the manner in which it interacted with rooftop solar policy, it has led to an increase in bills for people who don't have rooftop solar. So the challenge really is how do we get more rooftop solar without increasing the bills for people who don't have rooftop solar?

So, Moet, how do we know that it's increasing the bills? Because when I think of utilities, I think of there to have these big undergrounding schemes for transmission lines because of the fires that their transmission infrastructure has started. There's paying for the fires themselves as well. There's sort of increasing costs of fossil fuel inputs into the system. So there's so many different things to me that say could be contributing to rising electricity costs.

aging equipment alone. So why do you think or why do utilities or why do some analysts think that it is rooftop solar that's doing it? So it's not only rooftop solar. You're right. There are quite a few inputs into these increasing costs. But rooftop solar has been one of the contributors.

And to understand why, just consider this, that whenever a household pays for using electricity, they're not just paying for generating the electricity. They're paying for keeping the whole grid afloat and then some. So when you use, you pay for maintenance of the grid, infrastructure build out, salaries of the people who work on the lines to trim trees, low income programs and so on.

A lot of these costs are unrelated to usage and solar generation.

And with net metering, if a household is able to minimize their bill, they're paying less towards these fixed costs than they were before, so others have to contribute more. Now, to understand this, consider a hypothetical where every household installs rooftop solar to minimize their bills. Well, we still need the grid to serve electricity when the sun goes down. We still need to generate electricity later.

the need for the grid and low-income programs doesn't go away. How does the system work? It's really a simple accounting issue that we pay for all costs of the grid based on how much we use, but a lot of these costs are unrelated to usage. The problem isn't rooftop solar, it's how we design rates and how the NEM policy interacted with it.

You know, one thing that's interesting to me here is that there's kind of a missing piece of the story here, which is that California has been trying to flatten electricity demand. This was seen as a good thing going back, you know, like Sammy was saying, you know, a couple decades. Because if we didn't flatten that demand via things like rooftop solar, then the utilities would have had to build more generation and more transmission, right?

which would then have been billed to everyone. So how is that factored into the way that people say, shit, costs are being shifted onto the system? So yeah, when more rooftop solar comes up, you reduce the need for consuming electricity for that household and the households around it during the time that rooftop solar works. So you need the grid and backup infrastructure to be there in case rooftop solar is not working and in the evenings.

Yes, it does put downward pressure on how many other resources you need on the grid, but it doesn't eliminate the need for having them.

No, I understand that. I just, you know, when I've seen different calculations of how big of a deal this cost shifting is, does it take that other part into account? Yes, it does. It does. So what it does is it values the fact that you're buying less wholesale electricity. It values the fact that you're building less now storage for our evening time needs and

And it values the fact that you put less strain on the grid. And it also values that you'll have to build maybe less clean energy resources because customers are adopting rooftop solar. And of course,

The exact magnitude of these effects can be debated. But in general, the basic fact that I explained, where a lot of the costs of the grid just never go away, even in a 100% rooftop solar scenario, and someone has to pay for them, that's really the crux of the issue. Yeah.

So just to stick with this for one more second here. So we, let's say California average retail electricity price is like 30 cents a kilowatt hour. How much of that do we think is actually the increase in rooftop solar shifting this cost? I can't tell you for California, but for PG&E, the average price is 50 cents, 40 cents a kilowatt hour.

And between 10 and 15% is the rooftop solar. So let's call it four or five cents a kilowatt hour. Four to six cents, yes. Interesting.

I imagine that Bernadette would like to get in on this with a different opinion. Let's hold it until we get back from the break. We're talking about the future of rooftop solar energy in California, our transition to renewable energy sources. We're talking with Mohit Chhabra, senior analyst with NRDC, Sammy Roth, climate columnist with the LA Times, and Bernadette Del Chiaro, who is senior vice president for California with the Environmental Working Group.

We're going to get to folks on the phone right after the break. Now let's look at some of these comments here. Peter writes, why are we trying to kill off rooftop solar when we're in the middle of a climate crisis? Let's not let corporate profits get in the way of saving our planet.

planet. A listener on Discord writes, you know, I installed rooftop solar in 2024 and received rebates. We also have the batteries. So we try to store as much energy as possible. It has helped us during blackouts. We still end up paying, sending energy back to the grid on very sunny days. It helps out immensely on our electricity bills. And I'm very glad we have solar energy generation to help.

Last one here, Jose writes, "Governor Newsom has received over two and a half million dollars from the utilities and their union. Is it a surprise that his regulators are happy to kill rooftop solar and jack up our electricity rates?" We are going to keep talking about rooftop solar. We know many people want to get in on the conversation. Sammy Roth from the LA Times, Mohit Chopra from NRDC, and Bernadette Del Chiaro with California, with the Environmental Working Group. We'll be back with more right after the break.

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Welcome back to Forum. I'm Alexis Madrigal. We're talking about the future of rooftop solar energy in California, transition to renewables. We've got Sammy Roth from the LA Times, Mohit Chhabra from NRDC, and Bernadette Del Chiaro with the Environmental Working Group. Bernadette, I did want to give you a chance to hop in on that because I know that people have...

Different ways of calculating the economic effects of rooftop solar.

The cost of the grid would actually go down. There's a difference between investments we have already made in the past. Those are sunk costs that need to get paid off over time. And expenses we need to incur in order to meet demand in the future. PG&E just last year.

spent $11 billion on poles and wires, another $5 billion on the generation of electricity from distant power plants. On top of that, they earned $2 billion in profits off of those poles and wires. They have an inherent bias and incentive toward citing generation at a great distance from our cities and communities so that they can earn that profit. If we built rooftop solar and covered our rooftops and our parking lots with it,

our costs would all go down. We would not see this increasing utility rate because rates are going up, because utilities are spending more money on the grid. I'll give you an amazing statistic.

PG&E owns 120,000 miles of wires. Those are wires all put up to deliver an electron to our homes and businesses. You can encircle the earth five times with that amount of wire, and they earn a profit off of every mile they build.

If we actually stopped and got off this treadmill and did things differently by building in our community, allowing us to share energy amongst ourselves, we could shrink the cost and size of our electric grid, which, by the way, is increasingly fragile and dangerous and is going to get in the way of our ability to meet our clean energy goals. We just can't get there without rooftop solar.

You know, Sammy Roth, I mean, one of the things that's really interesting about this debate, you know, net energy metering seems like it is...

the ultimate in policy wonkery, but it's really actually about like the shape of our energy system. Like, is it going to be that we have centralized power being sent via long distance transmission? Or are we going to have, you know, rooftops lower in the cities? Of course, it's going to be a mix of both. But there's, it could have a totally different shape, depending on how these policies go.

Well, I think the most important thing you just said was, of course, it's going to be a mix of both. And it can be kind of a throwaway expression, but that's at the crux of it. I mean, every thorough analysis that's been done for California and nationally and everywhere of how do we get from a fossil fuel based energy system to 100 percent clean energy and how do we do it in a way that's

reliable and cost effective and realistic is, you know, finds we need a lot of large scale, you know, utility scale energy based on a large power grid. And we need a lot of decentralized distributed energy. We need

just knowing the climate timelines that we're working on where we need to cut emissions in half in the next like five years to maintain a safe climate or close to in half and then get to zero or close to zero by 2045. We just need as much of everything as possible and that's what every thorough analysis finds. So it can be frustrating that, it's understandable that given the political realities that we live with it on the one hand we have,

powerful political actors who are in some ways doing the bidding of large utilities and unions of employees, because in California, we have a powerful labor unions who are employees of large utilities. And on the other hand, we have a populace that's understandably very frustrated with large monopoly utilities. And so we get stuck in these arguments about, well,

you know are we going to have an energy future that's dominated by big utilities that people don't like are we going to have an energy future that is uh you know decentralized and controlled by the people when in reality we should be having more collaborative conversations about how do we get a lot of everything and that's just unfortunately not the conversation that we've we've been having so it's um you know it's kind of a frustrating argument

You know, it's interesting. Well, let's go to the phones here. Let's bring in Keith. Welcome, Keith. Hi. Yes. I got solar maybe five years ago or so, you know, to be environmentally friendly and save money, which the first year I had my PG&E bill went down to about $30 a month. Then the following year,

They changed the delivery rates from like $20 a month back to what my bill used to be, like about $140 a month, plus whatever power I bought from the grid in the evening. So it ended up, you know, I mean, I love having the solar, got the battery back up.

But PG&E has definitely found a way to make their money back, you know? Mm-hmm, mm-hmm. Bernard, was this as a result probably of some of the legislative changes?

Yeah, and the utilities have sort of had this slow and steady campaign to claw back as much money as they can get from rooftop solar users. And this is because they really are addicted to growing their profits. I mean, they have an obligation to their shareholders, and they just don't like it when people don't buy their product.

And so, yes, they have made small adjustments that add up to a lot that have really kind of slowly eroded the value. Now, it's still, you know, a good idea to go solar, especially if you can add a battery. But the value of it has really significantly decreased. And that has led to a real slump in the market. The rooftop solar market is a fraction of what it used to be at a time when it should be accelerating on our way to a clean energy future. Yeah.

Sammy, maybe you can talk a little bit about the Public Utilities Commission decision made in 2022 about incentives. What was the decision and what was the reasoning there?

Yeah, I mean, so it goes back to this cost shift argument. So there was a law passed by the state legislature in 2013 as rooftop solar was starting to grow more significantly. I mean, this was well back before, you know, well before a million solar roofs, which wasn't hit until 2019. But even at the time, there was starting to be concern among some parties and the utilities and some independent analysts that the cost shift was going to be a concern. So the legislature passed a law that

directed the Public Utilities Commission to analyze the

total benefits and total costs of net metering and try to ensure that they were roughly equal to each other. And so the Public Utilities Commission did a sort of first round of this in 2015, 2016, and ultimately decided that it would leave net metering roughly in place with some additional costs for rooftop solar customers. And they said, well, we'll circle back to this in a few more years as rooftop solar grows and more people get it to see if the cost shift is more of a concern then.

And they came back at it in 2021, 22, and ultimately made this very controversial decision at the end of 22 appointees of Governor Newsom. And they voted unanimously and they dramatically reduced the compensation rates that are paid to people who are going solar. So not retroactively. So everyone who already had solar, they decided would, you know, would keep the system they had for, you know, whatever they had signed up for, which I think was 20 years. But for new solar customers going forward, starting in April of 2023, they

the compensation rates would be dramatically reduced. So since then, as Bernadette said, and I don't have the exact installation figures offhand, she might for how the market has responded, but installations have been lower since then. And that's been a source of great controversy because it's, you know, California has these huge climate and clean energy goals. Why are we reducing incentives for rooftop solar? And, you know, the reasoning the PUC had was the cost shift and

There's an argument about, you know, is there a cost shift? If so, what's the size of it? And there's clearly disagreement about that question. Even if there is this cost shift and it's quite significant, a question that I've posed in my coverage is, well, why are we not then doing something else to make sure that rooftop solar keeps accelerating? And thus far, California has not done anything else.

You know, Mohit, in fact, California has AB 942, which is the sort of legislative response here. What does that call for and what is it going to do? So AB 942, that's one of the bills that NRDC isn't opining on. So among the things that AB 942 tries to do is it says when you sell your house, you

and if you have rooftop solar on your house, the new owner needs to transition to the new rooftop solar tariff as opposed to all net metering tariff, even though the terms of the old tariff were, say, 20 years. So the reason why NRDC isn't opining on this is a lot of these solar systems are loaned and leased out to households. And once these leases are made,

the person who does the lease, they package it and sell it as a financial product in the market. And then those are repackaged and sold again. So it's not clear to us who holds the risk of those products. And we wouldn't want homeowners

to be left with a big bill that's unintentional, and nor would we want to create more friction in the housing market in California that's already challenged. So NRDC, without knowing the details of all the contracts there, isn't opining on it for those reasons, but that's one of the main things the bill does. Mm-hmm.

Susanna wants to ask you specifically, one of our listeners, does the NRDC support breaking 2 million NEM1 and NEM2 solar contracts? That's net energy meeting contracts from the past as the California State Assembly just voted to do. We had thought about what the impacts would be back during the proceeding. But right now we don't support breaking those contracts. We do support correcting the retail rates that everybody pays, which are really expensive.

When you do that, you improve this situation of rising rates and rooftop solar cautions.

Let's go back to the phones here. Let's go with Gregory in San Francisco. Welcome. My question is, how is it possible that PG&E agreed to these rates that they were going to reimburse people who installed rooftop solar and then forgot about the fact that they didn't build in the infrastructure costs, and now they want to back out of those agreements? Hmm. Hmm.

I'd be happy to take that. Yeah, go ahead. So it's the regulator that sets the tariffs for rooftop solar and the infrastructure costs that need to be shared. I don't think people realized how fast rooftop solar could grow and what the impacts of those would be. And once things were in motion and it was clearly a climate success story,

there was a lot of apprehension and need to really understand what was happening before tariffs were changed. So as a result, you know, we landed where we are, where we have a robust growing industry for rooftop solar dependent on NEM. However, there are some rate increases. And as I explained, having the old NEM stay in perpetuity would be unsustainable.

So it really left regulators and policymakers in a hard spot. You know, you're damned if you do, you're damned if you don't, because we do care about the industry, making sure it's sustainable. And we also care about keeping rates affordable to everybody, because there's nothing that is a bigger threat to our climate goals than clean energy getting more expensive than natural gas and gasoline. And guess what?

Other states are looking at California to figure out how we thread the needle between fighting climate change and keeping costs low.

If I could jump in? Yeah, sure, Bernadette. Thanks. I think there's actually a really interesting point to the caller's question. 20 years ago when California first passed the Million Solar Roofs Initiative and embarked on this whole market transformation, the California Energy Commission predicted that electricity demand, peak electricity demand on hot summer days would increase by 15,000 megawatts.

That increase never materialized, not because Californians didn't actually use more electricity. We did. We had an increased population, hotter temperatures, more electronic devices in our homes and businesses.

we met that increased peak load with rooftop solar. This enabled PG&E and the other utilities to lower their costs to spend less money on the grid. In fact, CalISO, the system operator for the wholesale market,

They credited rooftop solar with the cancellation of 18 previously planned transmission projects, saving ratepayers $2.6 billion in 2018 alone. So the fact is PG&E is subject to the demand of electricity. And if demand stays flat in the midst of growing use of electricity, we're

we can all save money. This is the important mathematics of rooftop solar that frankly is not really applied in this cost shift whole theory. And it actually isn't in AB 327 that Sammy mentioned, which is why Environmental Working Group, Center for Biological Diversity and Protect Our Communities is currently suing the state of California because the net metering decision and the math that they used

to base that decision completely ignores the intention of the legislature to promote distributed generation, protect open space, invite and include private investment in what is our shared public grid.

Jonathan writes, and maybe, Sammy, you can just confirm this here. Please mention the fact that since 2020, California, by law, requires rooftop solar on all new single-family and multifamily homes under three stories. Yeah, that's correct. I haven't written about that requirement in a while. I think there's a number of cases where exceptions have been made where solar can be built under

off-site if it serves a community in some indirect way. But yes, that is a state requirement right now. Yeah, which is just kind of... And Mohit and Bernadette are probably more familiar with the details of how that's been applied than I am. We mandate it on all buildings, actually, now in California. It's amazing. And it all stems from the state's early, early investment and prioritization of

of distributed generation, a prioritization that has been completely lost in the current politics of today. But yeah, we mandate it on commercial buildings. We mandate it and we mandate batteries as well. So we recognize that building energy, it's like a shell and a turtle. It's just way better to build your energy resource right there where you're going to use it. It saves everybody money and it saves the planet.

But, you know, unfortunately, the utilities just have a lot of power. You know, one of your callers earlier mentioned, and I want to share a statistic that ran in CalMatters recently, a publication in Sacramento. Sure. $28 million was spent by the investor-owned utilities on direct campaign contributions and lobbying in Sacramento. To give you a sense of how much that is, it's two and a half times what Google spent on

and double what the oil industry spent in Sacramento. So they are the biggest political campaign contributors to Sacramento politicians of any business, any entity in the state of California. This gives them complete, right now, unchecked power. And what I think the people of California are just fed up with is this kind of special interest politics that screws the little guy and only helps PG&E.

Some of our listeners are coming in on that side of this conversation. You know, Carl writes, "PG&E buys my excess solar electricity and then turns around and sells it to my neighbor 50 feet away from me for an 800% markup. No wonder they made $2.5 billion in profits last year while the world burns." Ted writes, "We got solar for our house a few years back and it will be years before we recover our costs even with the incentives."

Yes, I'm a bit angry about this. And Amy writes,

of net energy metering pricing, which helped us know we could stay in our own home with little disposable income for the expected rate hikes. We are talking about the future of rooftop solar energy in California. A lot of strong opinions here, joined by Bernadette Del Chiaro, who is senior vice president for California with Environmental Working Group, Mohit Chhabra, senior analyst with NRDC, Sammy Roth, climate columnist with the LA Times. We're going to get to a lot more of your calls right after the break. I'm Alexis Madrigal. Stay tuned.

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Welcome back to Forum. Alexis Madrigal here. We're talking about rooftop solar energy in California, its growth, as well as the changes and incentives that the state of California is offering there. Joined by Bernadette Del Chiaro, Senior Vice President for California with Environmental Working Group, Mohit Chhabra, Senior Analyst at NRDC, Sammy Roth, Climate Columnist with the LA Times, and you all, of course, too, are in on this conversation. Let's bring in Christine in San Jose. Welcome.

Hi, good morning. I was calling to ask, you know, I'm a middle income customer renting an apartment. You know, why should I have to pay a higher price for lower quality rooftop solar for my neighbor or someone in Fresno when there are thousands of megawatts of lower cost, higher value, large scale solar being built with storage in Central Valley in the desert? I just don't understand why rooftop solar customers aren't paying their fair share of fixed cost to the grid.

Christine, thanks for that. Also, Christine referencing the other model of solar we talked about at the beginning of the show, big fields of panels out in the Central Valley or out in the desert. Do you want to take that one, Bernadette? I imagine one of the answers is to reduce the amount of acreage that's used in…

you know, the, the hinterlands, um, and wanting to protect those as other, some other kind of space? Yeah, absolutely. Uh, the, the, the lack of the requirement to industrialize open space, uh, harming wildlife and, and plant life is really one of the major benefits of rooftop solar. But I'm, I'm a little confused by the caller's claim that rooftop solar is higher cost and lower quality. Uh,

That is actually not at all true. Rooftop solar is competitive with utility scale because it cuts out the significant costs of transmitting the electrons across great distances. And it's actually higher quality, especially on hot summer days. It works really, really well. Lastly, this idea that it's, you know, some customers against another, this is really kind of a utility

trick to try to just, you know, get us all fighting with each other. And it just is not reality. I looked up before this interview, how much rooftop solar is just here in this zip code of the KQED studio in the intermission neighborhood of San Francisco. And there's over 400 rooftop solar systems with just a few blocks of here. You'll find rooftop solar in a car repair shop,

modest homes, several apartment buildings benefiting the renters. The SPCA Pet Adoption Center is loaded with solar. There's a Martin De Porres Soup Kitchen, Tenderloin Housing Clinic for unhoused people, and a creative space for local artists. This is just a little bit of the solar adopters that are out there benefiting. And again, when somebody goes solar, they're lowering costs for everybody else. So this is high quality solar.

cost-effective resources for a cleaner environment and a healthier planet. You know, Mohit, I do want to ask about this. You know, over the time I have been following this field, there has been...

A hard and fast rule, let's say, that utility-scale solar, as it's called, putting big panels in the desert or in the Central Valley, had a lower average cost than rooftop solar by quite a bit, was my understanding. So what is that cost spread if we can really calculate it well?

Yeah. So if you just look at the panels only, there is a cost spread of more than 3x from what I remember. And the reason is that you put grid-scale solar in the sunniest places and it tracks the sun. Rooftop solar is a little bit more constrained with where it's facing, where you put it, and it can't track the sun. So oftentimes, rooftop solar, you need

two or so more multiple panels to produce the same electricity one panel out in the desert would produce. Now, if you go that route, it will be more expensive to use more panels just from a panel's perspective. And also know that

it takes resources to produce more panels. We just don't see the fact that the ecological impact in California, you know, that's happening somewhere else, but there is an ecological impact to using more panels to produce the same electricity too. On the poles and wires issue, the issue really is that

You'll still need wires, even with lots of rooftop solar, to buy and sell electricity. When solar panels produce electricity and export it to the grid, they're doing it via wires as well.

And unless you get complete energy independence within inner cities with their own solar and storage, the need to be connected via transmission to the larger grid doesn't go away. So burn-in-it is correct. There are lower costs when you produce electricity closer to where you use it.

But the key word is they're lower, they don't completely go away. And the final part is both things can be true. We can have lower cost for a grid with the right mix of distributed and supply side, but we still may not be allocating that cost fairly. So there are two questions here. First is how

How do we get the lowest cost clean energy system? And the second is, how should contribution from all households to pay for that system be as fair as possible? Thank you. Let's bring in Jack in San Francisco.

Yeah, we've had solar in San Francisco for more than 15 years and also up in Healdsburg and then more recently the battery backup, which clearly provides a flattening of the demand during the highest periods.

And one thing that's missing in this whole conversation is the entire time, this last 15 years, on my bill from PG&E, it's cleverly hidden, but there are large amounts every month that I pay for infrastructure that I do not use, just like everybody else. So nobody's immune from this. So I'm not sure where this cost shifting is coming from or that one caller's concerned about me not paying for all that infrastructure because my wife and I do.

month after month. We have been for many years. And I think what Britain has been talking about is that the issue here is not that we need infrastructure, but we need better planning and the idea that we will have distributed production and all over the place and that we design the grid in such a way that

it maximizes that potential and usage and mitigates the need for large-scale projects that are hundreds if not thousands of miles away. And so I think this whole thing has gotten twisted because the utility doesn't want to change what they do, and the regulators don't understand, I guess, that

We can actually engineer and design a better way forward. And they're trying, exactly as someone said, they're trying to pit us against each other in order to make more profit. And I don't think that's right. Hey, thanks for that, Jack. Let's bring in Loretta in San Francisco. Welcome. Thanks, Michael. Thanks, Alex. Oh, hey, no problem. Go ahead.

Hi. I want to address this cost shift issue as well, because all the PG&E and their allies are saying that there are all these fixed costs that we all need to pay. But if that were true, why aren't they making solar businesses pay those costs as well? Why are they pitting only residential customers with solar against other residential customers?

I think that if the PUC were going to take a real look at all the costs and not just the costs that the utilities care about, they would see that solar benefits all. But what we can see is that their argument is disingenuous because if there were truly fixed costs that solar customers weren't paying, then business customers should have to pay their fair share as well. Hmm.

I just realized this is Loretta Lynch, former US Attorney General. Thank you for that call, Loretta. Mohit, let me take this one to you. Loretta Lynch is mentioning the sort of difference between residential consumers and commercial consumers. Explain that for folks a little bit.

All the fixed costs of the grid, to keep it running, imagine it's a big pie. The first step in figuring out how much households pay is, well, what share of that grid should households pay versus agricultural customers versus industrial customers?

versus small businesses, schools, and so on. That first decisions made in a regulatory proceeding, there are advocates for each consumer group, and they used different heuristics to come up with a way to divide that pie. Part of that is how many customers exist within each group. What happens when a lot of residential customers pay less because of rooftop solar,

Some costs do go up for non-residential customers. It's just a lot more diffuse relative to the amount of costs that go up for residential customers themselves. So if the question is, can industrial, agriculture, and small business customers share more of this load? Sure, they could. Would there be impacts on them as well? Yeah, there would. So we just have to balance those things. Exactly.

Wanted to also note that was Loretta Lynch, the former California Public Utilities Commissioner, not the former U.S. Attorney General. Powerful name there. Let's go to another caller here. Let's go to Eli in Saratoga. Welcome, Eli.

Hey, thanks so much for taking my call, and thanks for doing this program, which I think is really important. This is kind of building on a lot of comments you've gotten already, but even setting aside what seems to be the case that rooftop solar actually saves other people money, is just a lot of these arguments against it seem to just violate common sense.

Like in one case, like we have rooftop solar and we have air conditioning and a really hot day where historically I've experienced brownouts. I feel like we're one less demand on peak demand on the grid. Also, these arguments about how by decreasing my consumption of electricity, I'm somehow hurting my neighbors. I feel like.

That's an argument against being efficient. That's an argument against all kinds of using less electricity. That would also be an argument for getting rid of rebates for efficient appliances and stuff. So it just doesn't make much sense. And I think if they're talking about essentially clawing back what feels to me like a contract for this net energy metering stuff, I feel like they should have more sound arguments than that. Hey, thanks, Eli. Here's an example of what's happening here.

Tom says, "I recently lost my net metering after 20 years of having rooftop solar. Last month, without net metering, I exported to the grid over 700 kilowatt hours and received a credit of $8. And I used 200 kilowatts of grid power for which I'm charged $86. That's right, I paid $78 for the privilege of giving PG&E 500 kilowatts

hours of electricity. How is this being fair to an early adopter of rooftop solar? Sammy, one question I know you're grappling with in your coverage is let's just say we

agree maybe that net energy metering had rates that were too high, just hypothetically. It feels like the amount that they were cut feels kind of extreme in the sense that couldn't this have been stepped down over some years? Why is the cut all happening at one time? Like just on a policy level, this feels pretty dramatic.

Yeah, no, it has been dramatic in terms of, you know, when you look at how installations fell off after this decision. I mean, to be fair, one point is that installations ballooned quite a bit in the lead up to the decision, in the lead up to the cutoff of, you know, the installation or the incentives getting cut off because there was the vote in December of 2022.

And that said that incentives would go down in April of 2023. So in the sort of period between the vote and the cutoff date, there was a, you know, a big ballooning. So the numbers were a little inflated because of that. I do want to say just, you know, a lot of the callers are asking, you know, basically saying that this makes no sense. Rooftop solar is a benefit. It doesn't.

You know, we're doing good for the grid. We're saving everybody money. I think that's something that gets a little bit lost here is that there is, you know, really serious debate and different points of view and analysis, all of this. I mean, I've grappled in my reporting with the question of, you know, what is the cost shift? Does it exist? How big is it? If so, I mean,

On the one hand, you've got, yes, the utility saying the cost shift is significant. You've got the Public Utilities Commission itself, which its own public advocate's office saying the cost shift is significant. You've also got Mohit's group, NRDC, one of the largest environmental groups in the country, and also the Utility Reform Network.

independent rich pair watchdog group that is very frequently attacking the utilities quite aggressively for not profiteering. I'm also agreeing with the utilities in this case that the rooftop solar cost shift is significant and needs to be addressed. So, you know, that's not to negate everything Bernadette is saying and the arguments being made by the rooftop solar industry and environmental groups and

You know, I think there's a really serious question of has the Public Utilities Commission fully taken into account all of the benefits that rooftop solar provides? You know, as they make these decisions about net metering, there's a question of have they taken into account the land use benefits of not needing as much land for large scale solar? We're going to need a lot of large scale solar, but do we need quite as much of it? Have they taken into account the benefits that people have when they put rooftop solar on their homes, the benefits of not needing to rely as much on the utilities

You know, there's all sorts of trade-offs involved. But I think the idea that many of the callers to the show have understandably expressed of none of this makes any sense. Rooftop solar is just a benefit. There's no question. There's no trade-off involved. I do think it's more complicated than that.

You know, one thing I've been wondering about, Mohit, maybe I'll come to you quickly on this as we come to the end here is, you know, California's electricity demand has been flat for years. And I think most people were not anticipating huge increases in electricity demand until we started to see these data centers go in across the country that have really enormous demand and, you know, projections of demand increases that I really haven't seen, you know, kind of since the 1980s.

Do you think this changes this discussion at all? Like, has that been metabolized by the current sort of utilities and California energy system? That's a great question. I think the first fact to keep in mind is electricity use demand. It's a little bit more complex than, you know, one big system where electricity comes in and gets consumed by somebody.

There's a lot of variation based on where you are, what part of the grid you're connected to, and the constraints, locational constraints in that part of the grid. So with data centers coming online, they'll put a lot of strain on the system across the system and also locally. So we need some amount of work to make sure that there's more electricity available in those local pockets where data centers are coming on. And we could do that with good targeted distributed generation.

But when we do it, we want to make sure that those data centers, they pay their fair share of grid costs as well. We don't want them to minimize their bill completely, even though we're upgrading the grid for them to be there. Globally across the grid, we just want to make sure we have enough capacity to serve this load. The data center does illustrate

the complexities of the grid. It's a complex orchestra. And as we move towards this clean energy transition, keeping things equitable and fair is a must because that's really necessary to keep support for our clean energy transition. Yeah. Last point on this, Rocky writes, California has solar programs targeted to benefit low-income tenants and shift millions of dollars of costs away from ratepayer-funded assistance programs.

Assembly Bill 942 would hurt more than 18,000 affordable housing tenants who benefit from California's solar on multifamily affordable housing program, which reduces their bills by $60 a month from solar generation. On average, a multifamily housing project is sold every six years. The bill would severely reduce the savings to these families and raise their energy bills significantly. So...

Got a lot of competing concerns here. Hope people got a taste of this complexity of this debate. We have been talking about the future of rooftop solar energy in California with Mohit Chhabra, senior analyst at NRDC. Thank you for joining us.

Thank you. Sammy Roth, climate columnist with the LA Times. Thank you, Sammy. Happy to be here. And Bernadette Del Chiaro, who's senior vice president for California with Environmental Working Group. Thank you, Bernadette. Thank you. Go solar. Thank you to everyone who called in. I'm sorry we couldn't get to everyone. Thanks for all of your comments as well. I'm Alexis Madrigal. Stay tuned for another hour of Forum Ahead with Mina Kim.

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