Study Finds Total Benefit in Excess of $92 Million for California Ratepayers
SAN FRANCISCO, Jan 21, 2013 – A recent study commissioned by the Vote Solar Initiative finds that net-metered rooftop solar energy offers substantial benefits. The net metering program offers utility bill credits to rooftop solar customers for the surplus clean energy their systems add into the local electrical grid. The study finds the annual benefits to customers of California’s three investor owned utilities will exceed $92 million annually.
Rooftop solar is expanding rapidly in California, driven primarily by net metering. A July 2012 California Solar Initiative finds that two-thirds of home solar installations take place in low and median income neighborhoods – areas where ratepayers are motivated to reduce overall impact of energy costs on their household budgets.
The study was authored by Tom Beach of Crossborder Energy. Beach is a consultant and former California Public Utilities Commission advisor and used a CPUC-approved economic model combined with data from solar customers to assess the overall impact of net-metering on ratepayers. The study finds that the costs of net metered power are outpaced by the financial benefits and will produce an estimated total net benefit of $92 million annually when the program is fully implemented.
The benefits are not all financial, of course. “When someone decides to put solar panels on their roof, they not only generate clean power, but also reduce strain on the electric grid while offering financial benefits to all ratepayers,” said Adam Browning, Executive Director of The Vote Solar Initiative. Browning feels net metering is vital to revamping California’s antiquated energy grid and growing a clean economy in the state.
Net metered solar energy saves on expensive conventional power and correspondingly reduces investments in the transmission and distribution infrastructure required to maintain the conventional grid. Net metered solar energy is loaded onto the grid locally, reducing lost electricity from transmission over power lines. Rooftop solar energy meets carbon reduction and renewable energy requirements, creating savings across the system.
While popular with ratepayers, California’s investor owned utilities are critical of net metering. Pacific Gas & Electric, Southern California Edison and Sand Diego Gas & Electric are concerned that net metering reduces their ability to conduct the capital investment infrastructure projects they need to stay competitive.
The fast growing solar industry employs over 43,000 Californians currently and yields environmental, public health and economic benefits to the state. Private investment in solar energy is over $10 billion, thanks in part to the policy of net metering.
“It’s crystal clear that the way we produce and consume electricity needs to evolve. The good news is that net metering is doing what it was designed to do – accelerating solar adoption while reducing our dependence on dangerous fossil fuels,” said Daniel Kammen, University of California Berkeley Distinguished Professor in the Energy and Resources Group (ERG), and Professor of Public Policy in the Goldman School of Public Policy. “Solar produces energy at the times of highest cost to the utilities, so with the right market incentives, it is a simple “win-win-win” for ratepayers, utilities, and the environment.”
Consumers are not the only ones finding benefit in adopting solar energy. School districts and other public agencies are finding savings from solar energy helpful as they cope with steep budget cuts. Money saved from solar energy allows these districts and agencies to retain teachers and educational programs as well as other vital government services. Schools and public agencies will save an estimated $2.5 billion or more on energy bills over the next 30 years by using net-metered solar systems.
“Bill savings from solar projects coupled with efficiency are important at a time when schools have been forced to cut budgets and grow classroom sizes,” said Anna Ferrera, Executive Director of the School Energy Coalition. “Net metering helps taxpayer-funded institutions operate more efficiently by allowing schools to use these utility savings for other purposes such as books, supplies, and teachers. Not to mention the added benefit of having our students witness the clean and natural resources that can power their classrooms and computers.” The overall educational benefit combined with financial savings make solar energy an exciting option for many school districts across California.