HIDDEN COSTS: California’s Exploding Rooftop Solar Cost Shift.

Regardless of what is driving utility costs higher, their impact on rates is multiplied when customers install their own generation and buy fewer kilowatts-hours from the grid. That’s because those households – whether they are customers of the utility or of a community choice aggregator – contribute less towards all of the fixed costs in the system, such as vegetation management, grid hardening, distribution line undergrounding, EV charging stations, subsidies for low income customers, energy efficiency programs, and the poles and wires that we all rely on whether we are taking electricity off the grid or putting it onto the grid from our rooftop PV systems.

Since those fixed costs still need to be paid, rates go up, shifting costs onto the kWhs still being bought from the grid. This will be less true for systems registered after last April when compensation for new systems was made somewhat less generous, but that applies to almost none of the systems installed before 2024, which are the ones I am studying here.)

A decade ago, this was a small concern, because rooftop solar was barely a blip in the total supply picture. In 2014, the homes served by these three IOUs got less than 2% of their electricity off their roofs. Today they get about 20%. As fewer kWhs are sold from the grid, retail rates must rise even more in order to recover the fixed costs of the system.

The problem has become particularly acute in the last four years. During that time, solar capacity on houses has more than doubled at the same time that the utilities’ fixed costs have escalated dramatically due in large part to wildfires and the need for grid hardening against them.

So Sacramento and Washington have been subsidizing activity that will make supporting the electrical grid unaffordable while pushing for the electrification of virtually everything.

But wait, there’s more: California ‘throwing away’ wasted solar power may raise electricity prices. “In California, there are 47 gigawatts of solar power installed atop rooftops, equaling out to over a quarter of the state’s energy. However, during the middle of sunny spring days, the energy produced exceeds demand, meaning prices for electricity will go negative, and solar power is thrown away.”