DesertBlog

Fair Payment for Solar

An article published in today’s San Diego Union-Tribune has good news for advocates of point-of-use renewable energy. Mayor Jerry Sanders has announced that San Diego will participate in the solar financing scheme authorized by AB 811, which was enacted in July. This plan would allow residents and businesses to pay for solar panels through their property tax bills over 20 years. The debt obligation would pass on to the new owner when the building is sold, relieving one fear that many folks have when contemplating going solar: paying for panels on a building they no longer own. Financing the purchase over 20 years means the monthly payment for the panels would be in line with monthly savings on utility bills, making the purchase much less daunting. Finance companies are interested in participating because these are viewed as “low-risk” loans.

The City Council is expected to vote favorably on the plan by February. Once that happens, San Diego will become the largest city to adopt the financing scheme, and many hope this move will encourage more cities to adopt their own plans. Once similar plans are implemented widely across the state, one more stumbling block will be removed for California homeowners and businesses contemplating going solar. Thanks go to Mayor Jerry Sanders for taking this step, which could put San Diego in the forefront of the solar revolution, instead of bringing up the rear.

Financing schemes are great, but here’s what California and the rest of the U.S. really need to make “rooftop solar” take off: pay solar panel owners for every watt they produce, with no limits on the amount of power they can put on the grid.

How to do that? Through something called a “Feed-In Tariff” or FIT. That’s an awful, bureaucratic name. Just the word “tariff” sounds bad. I like FPS better: “Fair Payment for Solar”.  Because that’s what a good Feed-In Tariff does: requires utilities to pay a fair rate for all the power a customer with solar panels puts onto the grid.

Right now, anyone contemplating “going solar” is effectively limited in the size of array they can install. If you happen to have space for a system that provides more electricity than you need for your own use, current incentive programs won’t let you build one that big. And if you do happen to put more power onto the grid than you receive from it in a year, your utility will thank you for the free power. (I’m stretching the truth there a bit — they may NOT thank you for the free power you’ve provided.) You can feel good about helping out your neighbors, reducing global warming, lowering peak loads in summer and all that, but really, most people want to know what’s in it for them.

Fair Payment for Solar would allow homeowners to readily see what’s in it for them: the opportunity to make a profit with their houses. It also applies to businesses from small to large, many of which could certainly use another revenue stream right now. This economic incentive explains the success of Germany’s Feed-in Tariff, which has caused PV installations in that country to increase dramatically, resulting in 2000 megawatts of new solar power that is expected to come on line next year. (In California, we think it’s good when Southern California Edison plans to bring half that much rooftop PV online in five years.) The U.K. just passed a Feed-In Tariff, although it is limited to systems of 5 megawatts or less. 40 countries around the world have a Feed-In Tariff.

So what’s keeping the U.S. from following suit? Perhaps it’s the “power to the people” aspect, which sounds vaguely socialist. “The people owning the means of production? OMG, no!” But feed-in tariffs are not socialist or anti-business. They’re about good ol’ capitalism, with everyone from individuals to small businesses to big businesses being allowed to participate in the marketplace. We just need to free that marketplace from the stranglehold the big utilities currently enjoy.

(And if your heart is beginning to bleed for the utilities that will suddenly face competition from all these new providers — and will even have to pay them — don’t worry. We’ll still need plenty of power at night and on the hottest days. It’s just that the market won’t have the steep growth curves on which the utilities were banking.)

So how do we get a Feed-In Tariff (Fair Payment for Solar) in California? Simple, really. Just reform AB 1969, which was signed by Governor Schwarzenegger last year. This law started out with good intentions, but then was weakened by energy industry lobbying. It provides such a low tariff that it has had virtually no effect on the marketplace. It also limits system size to 20 megawatts. To reform it, legislators just need to go up against the utility lobby by enacting a fair rate of payment and removing the size cap.

Seems like Senator Christine Kehoe or Assemblymember Lori Saldaña would be great champions for such a rewrite of AB 1969. Support from a Republican mayor like Jerry Sanders wouldn’t hurt either.

And if you’re wondering why a desert conservation organization like the Desert Protective Council is so interested in solar pricing schemes, the answer is also simple: We figure that, the more solar power we have on rooftops and parking lots, the fewer giant solar plants (and accompanying transmission lines) we’ll have in the desert.