Renters and low-income Californians hoping to take advantage of the state’s abundant sunshine and cheap cost of solar will face some unwelcome news in the coming weeks. Beginning next year, two of the state’s three big investor-owned utilities will increase premiums on community shared solar subscriptions.
Community solar is supposed to allow multiple customers – especially those who rent or don’t own a roof that can support solar – to receive energy bill savings by subscribing together to an offsite solar project.
Southern California Edison (SCE) recently filed data showing that in 2017, the utility will require a shockingly high 4.1 cent/kWh price premium for residential customers who subscribe to the utility’s community solar program, known as the Green Tariff Shared Renewables Program (GTSR). In other words, a low-income residential customer using relatively little energy and paying 11 cents/kWh for power would pay 37% more in 2017 to subscribe to SCE’s community solar program. On top of that, the premium will increase over this year. Such a large and growing price increase to take part in community solar simply doesn’t make sense, given how low solar costs have dropped in recent years.
The 2017 costs of subscribing to the other two big utilities’ community solar programs are set to be lower than SCE’s, but still prohibitive for price-sensitive customers – PG&E projects a 3 c/kWh premium for residential customers (down from 3.6 c/kWh in 2016), and SDG&E projects 1.5 c/kWh (up from 0.4 c/kWh in 2016). (The differences across utilities are due to how each utility calculates the various credits and charges that the California Public Utilities Commission (CPUC) has determined must apply—and it should be noted that all customers of a given program pay the same premium as others in their rate class for that year, no matter what year they sign up.) GTSR price premiums could decline in the future, but only if the utilities sign newer, cheaper solar contracts. But the utilities only need to sign new contracts if lots of customers sign up to drive demand in the near-term, which won’t happen when it costs customers significantly more money to sign up for community solar than to stay with their utility’s power mix. This is a real chicken-and-egg problem that is standing in the way of program success.
These price premiums especially don’t work for disadvantaged and low-income Californians, who spend a higher proportion of their income on energy bills than their middle and upper income counterparts, and most of whom do not own a roof that could host rooftop solar. A 2015 CPUC white paper estimated that while 45% of Californians rent their homes, a full two-thirds of low-income California households are renters.
Community solar makes so much sense as a solution for disadvantaged customers, but only if they can save money by signing up. We support the California Energy Commission’s recommendation it its recent draft reportthat “the Legislature could authorize exemptions and incentives for low-income IOU customers” to make the GTSR program affordable for those customers; we also support revising the program’s pricing to make it more fair for all subscribers. In addition, the CPUC should prioritize investigating other options to further expand clean energy access in disadvantaged communities, including expanding virtual net metering.
We know that California’s policymakers – both at the CPUC and in the Legislature – are proud of leading on innovative clean energy solutions, and we also know they want to prioritize energy justice for low-income and disadvantaged communities. Let’s make 2017 the year that we approve bold, effective new low-income community solar programs in the Golden State that can set the pace for the rest of the nation.
You can read more about low-income solar solutions in Vote Solar, GRID Alternatives, and Center for Social Inclusion’s recent Low-Income Solar Policy Guide.