The rates that the three facilities owned by the investor in California have been the rate of electricity customers steadily over the past few years. For example, consider the trend in the prices that one of these facilities receives, Pacific Gas & Electric Company, 5.5 million residential customers in North California.
Some parties claim that these high electrical prices are driven by customers who installed solar panels on their roofs. They claim that solar energy customers create an unfair shift in the cost of high -income customers to low -income customers. This is not the case, as was discussed later.
First, let’s start with what is clear: climate dilution through electrification is a top priority for California. Countless economists and private state statements show that we will not be able to achieve clean energy goals in our state without a solar on the roof.
California policy makers, including legislators and organizers, must take the following five steps to enhance the fair electrification in the state:
First, it stopped making the finger to the transformation of the cost of solar energy as creating high electrical rates. Instead, set the role of costs expenses in the enlarged benefit, administrative inception and excessive executive compensation. California prices are now nearly three times the average United States. It has been higher than the average United States since 1979, before the solar panels arrived on the surface.
Second, we realize that the solar panels generate clean energy in the source. The surplus can go to adjacent homes, avoid pollution from current fossil factories and the need to invest in widely renewable projects and expensive transport lines required to provide this energy to customers. This is a clear benefit for society to achieve our climatic goals and must be motivated properly.
Third, we understand that the solar panels, by lowering the electricity bills for customers, improve the possibilities they will work on. Many EV owners also have solar panels on their surface. The economies of fixing thermal pumps for heating, cooling the house and for water defense are significantly improved when installing solar panels. In California, home electrification is an essential strategy to combat climate change. Again, the incentives should be prepared to support them, not to hinder it. These cost transformation claims are distraction that hinders our collective ability to create effective market solutions in the market that stimulates clean energy and home electricity.
Fourth, it seeks to make solar panels at reasonable prices for all customers, which is exactly what was happening before a net bills tariff was aged on April 15, 2023. Among the surface solar users in California, 60 % of the working class and medium income, and 53 % of colored people. Under the tariff for clear bills, it is now difficult to solar energy and storage on the surface to a pencil for millions of families in the state. Facilities need to have a business model dependent on the basics of the market – that is, the profits should go to those who produce value for society. While there is an important role for facilities in the future green economy – such as transportation, storage and development of flexibility forms to distribute energy on the basis of differences in the place where it is produced for any specific moment – the current “cost” narration provides their mistakes of enough fog.
Fifth, accepting that solar customers with batteries greatly reduce pressure on the network during peak periods and low electricity rates in wholesale markets. This will benefit all customers, not just solar energy customers. Moreover, in critical days, customers with solar energy and batteries may prevent interruption, not only in their homes, but through many other homes if they can be stimulated to serve as virtual power plants (VPPS). The batteries are expensive for installation, and even under NEM 3.0, half of the new solar installations are performed without batteries. Consequently, governments, federalism, loyalty and incentives should double for customers to install the batteries when installing solar panels.
Instead of directing the finger to the transformation of the solar cost, the legislators and organizers in California need to study and implement these five steps to restore California to the right path to reach clean energy goals in the state.
There is no doubt that the customer’s use decreases significantly when installing solar panels, but this does not mean creating a cost transformation. If the reduction of use is equivalent to the creation of a cost transformation, the cost transformation will reach whenever customers invest in energy efficiency, reduce the size of their homes or move anywhere else. In all of these unarmed cases, facilities revenues decrease, seek to recover their revenues, and the facilities raise their prices. But no one raises the issue of turning the cost when this happens.
Of course, the real issue is to recover the utility of its fixed cost, not to recover its total revenue. Fixed costs are the costs of facilities that are not different with use, and in standard regulatory practice, the costs of measurement, bills and customer service, and in some cases, the cost of the line that connects the house to the transformer. Many facilities collect some or all of these fixed costs through fixed monthly fees. Today, the average monthly national fee through 173 of the investor auxiliary tools is $ 12. However, California organizers have enriched a monthly fixed fee of $ 25 per month, which she currently does not have and can rise more.
When the utilities company does not have fixed fees to restore their fixed costs, instead, these costs are expelled through energy fees from users, who support who? Large energy users who do not have solar panels support the fixed deficit of low energy (that is efficiency) while low power users are the beneficiaries of the cost transformation.
To clarify this, assume that there are no fixed monthly fees, and the energy cost is a fixed rate of 25 cents per kilowatt hour, which includes 5 cents per kilowatt hour to restore fixed costs at $ 25 a month.
Customer A, the normal user consumes 500 kWh per month and pays $ 125 a month for electricity. Assuming that the rate is properly designed, the utility will recover fixed costs of $ 25 per month of the average user.
The customer consumes a solar client, 100 kWh per month from the network and pays $ 25 a month to the utility. With this, B only pays $ 5 per month towards fixed costs. This creates a cost transformation of $ 20 per month ($ 25 -5 dollars).
Customer C, a low customer, consumes a non -series customer, 250 kW per month and pays $ 62.5 a month. However, C 12.5 dollars are paid towards fixed costs, which leads to a cost of $ 12.5 per month. The low user can live in a mild climate, in a small apartment, or in a very efficient house.
Customer D, a large user, consumes 1000 kWh per month and pays $ 250 per month. D excessively paying the fixed costs of the utility of the utility by $ 25 a month.
Accordingly, the facilities that refund their fixed costs through energy fees instead of fixed price fees have an incentive to find adult energy users and support them to cover their fixed costs. Thus, the facilities do not have any incentive to enhance the installation of solar panels, which contradict our mass climate goals.
With this background, let’s consume the question: Are solar energy customers created a cost transformation that leads to an increase in electricity rates? To find out, let’s assume that adult users are the most vulnerable to installing solar panels to manage their energy bills.
To assess the transformation of the cost, it is important to think about the customer’s lifelong use, which includes pre -nomadic and post -helicopter periods.
Let’s say, for the sake of the argument, that the big user was an abnormal agent for 20 years and has installed solar panels over the past five years during a total of 25 years as a customer. In this scenario, this user excessively gets $ 6000 (during the twenty years as a large user) and has a $ 1,200 utility tool over the past five years. In this reasonable scenario, this customer still keeps paying additional amounts worth $ 4,800 to the tool. In fact, it will take another 20 years before canceling the lack of payment of excessive payment.
In conclusion, customers who have solar panels do not lead rates to the top. Many other factors are the leadership of higher rates. In order to enhance the electrification in the state, legislators and organizers must re -focus their attention on the five steps described in this article.
The author, an economist, worked on electricity pricing issues for more than four decades all over the world. In 2019, he bought EV, installed solar panels on its surface and tied them with a battery.
Read more articles written by Ahmed Faruki
The opinions and opinions expressed in this article are the author of the author, and do not necessarily reflect those that PV magazine preserves.
This content is protected by copyright and may not be reused. If you want to cooperate with us and want to reuse some of our content, please call: Editors@pv-magazine.com.
Popular content
