Lucas Davis, a professor at the University of California at Berkeley, wrote an article in which he claims that if your neighbor installs solar panels, it will cost him $65 a year on his electricity bill, but his calculations are wrong. Rather than costing you more, those panels are most likely saving Davis money. Solar panels aren’t just good for the people who have them – they’re good for everyone.
So how did Davis go wrong in his calculation? First, Davis forgot to take into account the savings he makes 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, those costs are not really “fixed”. The need for them ultimately depends on the demand for electricity, and your neighbor’s solar panels can reduce that need.
In fact, just two days before Davis released his analysis, the California Independent System Operator (CAISO) approved a plan canceling previously approved $2.6 billion worth of transmission projects, which CAISO says was the result of changes in the use of electricity “strongly influenced by energy efficiency programs and increasing levels of solar generation on residential rooftops.” This is in addition to the $192 million saved in projects not executed in 2016. While additional investments in transmission will surely be needed to help California meet its clean energy goals, CAISO’s revised plan shows that solar systems in the Rooftops, like the one belonging to Davis’ neighbor, are helping customers save billions of dollars.
The solar power on roofs, including solar power for businesses, government buildings and schools can save money on utilities and consumers in other distribution infrastructure costs.
For example, expensive utility transformers can be overloaded on hot summer days when people are using more energy to cool their homes. Rooftop solar can take pressure off the system these days, extending the life of utility equipment and saving everyone.
So, if Mr. Davis is looking for someone to blame for his rising utility bills, he could start by looking in the direction of his power company, which is pushing hard for new infrastructure to be approved, even when it is shown that it is not necessary.
For example, Southern California Edison recently sought approval for more than $2 billion of waste in its distribution system, in which it would earn an attractive rate of return, but which taxpayer advocates say would increase rates for everyone. Mr. Davis must see his neighbor as an ally in the fight against these costs, not as an enemy.
Additionally, Mr. Davis ignores the widely recognized benefits of rooftop solar, including the avoided costs of hedging from volatile fossil fuels such as natural gas, the avoided electricity losses from power plants far from cities, and avoid the need to build expensive new natural gas plants.
Finally, Mr. Davis’s logic on avoided energy costs is flawed. Part of the reason that wholesale electricity generation costs only $ 0.04 per kilowatt-hour is that solar and other renewables reduce the state’s reliance on expensive “bigger” generation plants that would drive up prices if they had to work. To say that solar energy is not worth much because electricity is cheap is like saying that your alarm system is worth nothing because no one tries to enter your house anymore.
Rather than arguing with your neighbor, Mr. Davis should treat you to a cold beer, cooled with energy increasingly coming from clean sources, like your neighbor’s solar panels.