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Let's Be Clear: Solar Energy Benefits Everyone

Sean Gallagher's picture
Solar Energy Industries Association

Sean Gallagher is SEIA’s Vice President of State Affairs where he oversees SEIA’s legislative, regulatory, and policy development work in states nationwide. Previously he served as an executive...

  • Member since 2018
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  • Apr 16, 2018

Since the Stone Age, back when Fred Flintstone fought with Barney Rubble, there has been tension between neighbors. Yet the neighborly spat UC Berkeley Professor Lucas Davis recently blogged about shouldn’t be a fight at all. Solar panels aren’t just good for the people who have them — they’re good for everybody.

Davis claims if a neighbor installs solar panels, it will cost him $65/year in higher electric bills, but his math is wrong. Instead of costing him more, it’s very likely those panels are saving Davis money.

So how did Davis get his calculation wrong? First, Davis forgot to factor in the savings he realizes when rooftop solar panels reduce the need to build new transmission and distribution infrastructure. While Davis is correct that utilities have certain fixed costs that we all pay for, he forgets that, in the long run, these costs are not truly “fixed.” The need for them ultimately depends on demand for electricity, and his neighbor’s solar panels can reduce that need.

In fact, just two days before Davis published his analysis, the California Independent System Operator (CAISO) approved a 2-year transmission plan that cancels previously approved transmission projects to the tune of $2.6 billion, which CAISO states was the result of changes in electricity use “strongly influenced by energy efficiency programs and increasing levels of residential rooftop solar generation.” This comes on top of $192 million in savings from projects avoided in 2016. While additional transmission investments will surely be needed to help California reach its clean energy goals, CAISO’s revised plan shows that rooftop solar systems, like the one owned by Davis’ neighbor, are helping save customers billions of dollars.

Rooftop solar, including solar on businesses, government buildings and schools, can save utilities’ and consumers money on other distribution infrastructure costs as well. For example, expensive utility transformers can get overloaded on hot summer days when people are using more energy to cool their homes. Rooftop solar can reduce strain on the system on these days, which extends the life of utility equipment and creates savings for everyone.

Thus, if Mr. Davis is looking for someone to blame for his rising utility bills, he might start by looking in the direction of his electric utility, which lobbies hard for approval of new infrastructure, even when it is shown not to be needed. For example, Southern California Edison recently sought approval for over $2 billion of unnecessary spending on its distribution system, on which it would earn a handsome rate of return, but that ratepayer advocates say would raise rates for everyone. Mr. Davis should view his neighbor as an ally in fighting those costs, not an enemy.

Further, Mr. Davis ignores widely recognized benefits of rooftop solar, including avoided fuel hedging costs created by volatile fossil fuels like natural gas, avoided electricity losses from power plants that are located far away from cities, and avoiding the need to build new expensive natural gas plants.

Finally, Mr. Davis’s logic on avoided energy costs is flawed. Part of the reason wholesale electricity costs just $0.04 per kilowatt hour to generate is that solar and other renewables reduce the state’s reliance on expensive “peaker” generation plants that would drive prices higher if they had to run. To say that solar isn’t worth much because electricity is cheap is like saying your alarm system is worthless because nobody tries to break into your home anymore.

Instead of arguing with his neighbor, Mr. Davis should invite him over for a cold beer chilled with energy that increasingly comes from clean sources, like his neighbor’s solar panels.

Photo Credit: Jon Callas via Flickr

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Nathan Wilson's picture
Nathan Wilson on Apr 17, 2018

Ok, but this article is not a more refined analysis, it’s simply a list of the usual pro-solar talking points, with a billion dollar anecdote thrown in. We can’t make policy like that.

At least Mr. Davis used an actual analysis to support his position.

Robert Hargraves's picture
Robert Hargraves on Apr 17, 2018

Davis is right; you are not. The transmission/distribution infrastructure is needed to be in place whenever the sun does not shine. Solar panels don’t reduce this requirement.

Bob Meinetz's picture
Bob Meinetz on Apr 17, 2018

Sean, your salesmanship notwithstanding, rooftop panels do not “reduce the need to build new transmission and distribution infrastructure.” They break up an efficient, shared transmission and distribution infrastructure into countless, low-voltage, duplicative pieces, inestimably increasing transmission losses, environmental impact, and expense. Though SEIA fails to mention the exhorbitant subsidies homeowners receive to make this deception possible, Davis and others are paying attention.

One doesn’t have to be an engineer or physicist to recognize snake oil masquerading as clean energy.

Sean OM's picture
Sean OM on Apr 17, 2018

Actually he is right. What they have done is reduced the midday peak that is driven mostly by AC down. You need the AC on hot sunny days when solar is the most active.. The peak is now smaller and later in the day.

However, the larger driver is storage. You don’t need to upgrade the transmission lines if you have storage especially at or below the substation.

Mark Heslep's picture
Mark Heslep on Apr 17, 2018

CAISO peak occurs quite late in the evening, and is of course not reduced by solar power.

Bob Meinetz's picture
Bob Meinetz on Apr 17, 2018

Sean, solar has zero effect on demand peak. Today, for example, demand peak is 8:30PM, hours after the sun has set.

California currently has thousands of operational substations, and will only have more in the future. You’re going to install storage at each of these substations, then replace it every 7-10 years, are you? Have you performed any cost analysis about what that might cost, and compared it to the cost of transmission upgrades?

Mark Heslep's picture
Mark Heslep on Apr 17, 2018

You don’t need to upgrade the transmission lines …

As reference in the article, the notion of savings though less transmission infrastructure has been studied and found insignificant.

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