The proposed ‘grid participation charge’ will unleash a grid exodus.
‘Go away’ is the message to rooftop solar.
Your roof is the first serious competitor that California’s monopoly utilities have ever had.
And now, they’re about to dare you to use it.
California’s CPUC is proposing that homeowners pay huge fees to connect to the grid if they put solar panels on their roofs ($8/kW/month). And the bigger the solar array, the higher the fee.
The utilities and regulators are betting that homeowners will be too scared to cut the cord and leave the ‘safety’ of the public grid.
Why the CPUC’s proposal will trigger a grid exodus:
People want 100% renewable energy. California’s utilities have dragged their feet on adding renewables, so today the grid is still largely powered by gas in winter months. Overbuilding solar is the only way to change that, and people want solar on their roofs.
People don’t want to be dependent on an outdated grid. The utilities have also lagged on resilience and making the local grid smarter. We’ve all experienced grid outages due to storms, fire danger shutoffs or just plain old equipment failures. Solar will enable you to stay powered up, and potentially even help your neighbors, when the grid goes dark.
Prices are dropping quickly for solar and storage, so going off-grid gets cheaper each year. Storage prices in particular are dropping as it becomes mass-market. And solar inverters, the brains of solar systems, are now shipping with ‘grid-forming’ capabilities built in for off-grid residential use.
Off-grid will now work year round. Solar produces less power in winter, so that’s always been an obstacle to going fully off-grid. But with bidirectional charging coming to electric cars, you’ll be able to use your car as a backup generator on those rare winter days when your solar panels don’t produce enough juice.
Solar installers will start aggressively selling off-grid as a product. Solar installers employ tens of thousands of people in California. If demand for grid-tied solar dries up because of the new connection fees, they’ll quickly pivot to selling off-grid systems.
The math makes this inevitable.
Here’s some numbers that show how obvious this is. If you want solar, why pay an extra thousand bucks a year to be grid-connected when you don’t need to? With California electric rates already among the highest in the country, going completely off grid is going to be cheaper.
Model assumes 30 kWh average daily consumption, 35 cents/kWh utility rate, and 10kW + 25kWh of solar + storage with federal tax incentives:
A bad idea for the planet, and for equity.
It’s better for everyone if homeowners can feed excess solar energy back into the grid, rather than wasting it. But maybe the utilities and regulators need to shoot themselves in the foot first, before realizing the danger and figuring out how to lure homeowners back.
An off-grid stampede would threaten a massive loss of capital from the system, and a death spiral where the cost of the grid gets shifted to those who can least afford it.
I suspect (and hope) the CPUC will scrap this grid participation charge before it finalizes its ruling.
The solar+storage, 100% renewable train is leaving the station worldwide, regardless of what California does. It would be really nice if we used our scale as a state to help it go faster.