MARCEL HAWIGER, SFGate, November 19, 2008
California’s regulators are exploring whether or not California should follow the German model to promote rooftop solar power by adopting a “feed-in tariff” for solar energy. This tariff sets a price for any and all electric power that the solar installation feeds into the electric grid, even relatively small amounts. Rooftop photovoltaic installations on both homes and businesses have blossomed in Germany due to the use of this incentive.
So we know that this policy can convince building owners to invest in more solar installations. But it is not the only way to develop solar power – or the best way. In Ontario, Canada, a feed-in tariff that paid four times the normal price for electricity failed to stimulate small-scale projects. The Ontario Power Authority has been unwilling to up the ante, because it would raise electric rates for consumers – the biggest problem with high feed-in tariffs is that they result in higher utility bills, because ratepayers pay top dollar for every single kilowatt produced. Here in California, we are already subsidizing solar through higher utility bills. Thus a high feed-in tariff is unnecessary, and unfair.
PG&E, Edison and SDG&E now pay a homeowner or business full price rather than the wholesale rate other electric generators receive for their solar output up to the amount of electricity they use annually. Solar advocates want utility companies to purchase excess solar output from homeowners and businesses, and want the utility to pay an inflated price per kilowatt hour. But overpaying for rooftop solar would actually buy us less renewable power in the end by spending consumers’ money on the most expensive renewable technology – photovoltaic solar energy – which is more than twice as expensive as solar thermal, wind, geothermal or biomass.
There are better ways to maximize our state’s investment in solar energy. My organization, TURN, was instrumental in passing legislation that requires the California utilities to use renewable energy to meet at least 20% of their energy need in 2010. That law included important consumer protections to insure that renewables are purchased at the best possible price for consumers.
In contrast, a high feed-in tariff, like other programs funded through utility bills, burdens small consumers with higher bills that have limited returns.
The California Solar Initiative is one such program, already providing ample financial incentives for starting small solar, and already a burden on working Californians. Gov. Arnold Schwarzenegger has claimed the environmental mantle by pushing for a “million solar roofs” without raising any income taxes, but he instead raised utility rates, thus forcing ordinary Californians to subsidize a program that disproportionately benefits the wealthy, who are receiving the majority of the funding. More than 80% of the projects funded under the initiative are being put on commercial rooftops, bringing huge benefits to large businesses like Wal-Mart and Macy’s. Under a feed-in tariff, wealthy businesses and individuals can double-dip – building their systems with generous subsidies, enjoying free electricity and higher home values, and then selling the excess power back to the consumers for hugely inflated prices.
The goal of the feed-in tariff promoters cannot be faulted – promoting renewable power. But that can be done without harming utility ratepayers. The City of Berkeley has developed an innovative pilot program to provide homeowners with special tax financing for the cost of a solar installation. And in the recent bailout bill, Congress finally extended the generous tax benefits available to commercial solar installations to residential projects, a long-overdue change.
Will we ever catch up with Germany by making these changes? Perhaps not. But we’re behind on social programs too, including programs that provide a safety net for hard economic times. After we address those, then I won’t worry so much about using utility bills to fund those solar panels I see all over my Berkeley neighborhood.