Power Play: Big Energy vs. Solar

Since we each installed solar panels on the roofs of our homes two years ago, we, like a growing number of other Californians, have witnessed a daily miracle. In the garage of each house is a small meter. At night it spins forward (showing that we are drawing electricity from the state power grid). Once the sun strikes the roof, it spins in reverse (showing that we are supplying clean energy to the grid). When those meters spin backward, they don’t simply show a reverse flow of electricity, they show a small revolution in our relationship to the environment.

Solar energy improves the quality of the air we breathe, reduces our dependence on fossil fuels and feeds energy into the grid when we need it most--when air conditioners are straining an already shaky, blackout-prone system. But all this progress may be imperiled if the California Assembly takes up AB 58 as scheduled Monday.

That’s because California’s three big utilities--Southern California Edison, Pacific Gas & Electric and Sempra Energy Resources--want to deal a blow to the state’s “net metering,” law, which allows consumers with solar panels to connect to the grid.

The current law allows homeowners, businesses and government agencies with solar energy systems up to 1 megawatt in size to send surplus electricity they generate back to the utility for credit at retail value. In other words, the law allows customers to offset the energy consumed from the grid with excess energy they produce but don’t need at that moment. For homeowners, excess power is produced during the day while most of them are at work. For businesses and government agencies, excess power is produced on holidays and weekends. The law has proved a powerful method of promoting solar energy, sparking a 1,000% increase in the number of large solar energy systems in California in the last year alone.

Net metering does not require the utilities to cut a check to customers who produce electricity (although that would be a good idea). Both solar energy and increased energy efficiency--a principle the utilities accept--simply reduce the amount of electricity we need from the grid. The difference is that with solar panels on their roofs, Californians can become energy-independent.

The Big Three utilities fought net metering when it was introduced in 1995. In 2001, during the height of the energy crisis, they fought expanding the program to include commercial, agricultural and local-government-size systems, pushing through a last-minute change that limited the time the program would be in place. Now, AB 58, by Assemblyman Fred Keeley (D-Boulder Creek), would extend the law allowing net metering of large solar systems past the end of this year, when it is due to expire. Contrary to Keeley’s intent, the utilities have amended the bill in a way that would effectively double the amount of time a solar energy system takes to pay for itself by lowering the rate that utilities pay for the energy.

In hijacking AB 58 the utilities are ignoring the wishes of California voters. Like 90% of other Americans polled recently, California voters overwhelmingly support solar energy. In fact, the utilities are the only major force in California organizing to stunt solar. They are not waging a public campaign against AB 58--which is why you haven’t heard about it. Instead, they’ve organized a back-channel campaign among legislators.

Why? The utilities know we’re not yet out of the woods on the energy crisis. Just last month, the state experienced a Stage 2 energy alert. Moreover, the fallout from Enron and the current economic downturn have caused the cancellation of half of the new natural gas power plants slated for construction.

To be fair, the utilities claim that net metering is an administrative headache because it requires a separate billing system. They also claim that solar panels create a financial burden on nonsolar customers, as their rates rise to cover the purchase of solar at retail rates But they are misstating the facts. The version of net metering they are advancing in amendments to AB 58--which would require customers to install an additional meter and receive lower, wholesale rates--is more difficult to administer, not less so. As for a financial burden on nonsolar customers, according to figures provided by the utilities themselves, the cost is less than a penny per customer per month. And when we consider the avoided expense of not having to build new transmission lines to meet increased peak demand on the grid, it may actually turn out to save money.

It’s not that the utilities don’t recognize the promise of solar energy: It’s that they do. The utilities are afraid that if we get even a small degree of benefit from technologies like solar energy, we will cut into their profit margins. And they spend money to get their way. According to a recent study by the Center for Public Integrity, the three big utilities spent “$69 million on political spending and lobbying between 1994 and 2000.” In the realm of energy, the nation is at a crossroads. Nuclear energy poses risks, and pollution from coal, oil and natural-gas-fired power plants is the leading cause of global warming. Solar energy, wind power and conservation offer another path.

Solar energy, in particular, is at a critical stage of growth. Until recently, solar was too expensive for mass use. But the more solar panels consumers buy, the cheaper they become. Every time the cumulative demand for solar energy doubles, the price of a solar panel goes down by about 20%. Since California represents 60% of the market for solar energy in the United States, if the demand collapses here, it will be a colossal setback to the effort to cut costs through improved economies of scale.

In 2001, San Francisco voters approved a $100-million bond to pay for solar panels on public buildings, the largest purchase of solar energy in the country. But if the utilities get their way and reduce incentives, what other city or large business will follow suit? Local governments and businesses, which have recently developed plans to implement solar energy based on their faith in net metering, may abandon these efforts.

California led the way to large-scale net metering, creating a model for other states. Now that three big utilities want to weaken AB 58, we must be a model to the country in something else--protecting our initiatives by stopping stealthy moves to undermine them.