Thread: CALIFORNIA - Solar power adds to nonusers' costs

Solar power adds to nonusers' costs

Booming rooftop solar installations in California are bringing an unwelcome surprise to the homes and businesses that don't have the devices: an extra $1.3 billion added to their annual bills, more than half of that for Pacific Gas & Electric customers.

Christopher Martin and Mark Chediak

Monday, December 17, 2012

• The state's largest utility firms will pass on about $1.3 billion in annual costs to people without solar systems. Photo: Sam Hodgson, Bloomberg / SF

Booming rooftop solar installations in California are bringing an unwelcome surprise to the homes and businesses that don't have the devices: an extra $1.3 billion added to their annual bills, more than half of that for Pacific Gas & Electric customers.


Power companies in the state, the nation's biggest for solar power, are required to buy electricity from home solar generators at the same price they resell it to other customers, meaning utilities earn nothing to cover their fixed costs. The rules are shortsighted because eventually rates must be raised to make up the difference, according to Southern California Edison, which has joined with competitors to estimate potential losses.


As more homes and warehouses get covered in solar panels, higher rates imposed on traditional consumers risk a growing conflict between renewable-energy advocates and power companies that foresee a backlash in California and 42 other states with similar policies. The tension has also emerged in countries including Spain and Germany, where solar investments are curbing investment in the power grid.


"You get into a situation where you have a transmission and distribution system with nobody paying for it," said Akbar Jazayeri, vice president of regulatory operations at Edison, a unit of Edison International and California's second-largest electric utility.


To deter losses as solar abounds, states typically set a cap on the amount of photovoltaic power utilities must buy under what is called net-metering policies. Those allow a meter to run backward during the hours a day when a home or business is selling the power to the utility. California's limit is 5 percent of a utility's aggregate peak load.
New customers

About 20,000 customers of San Diego Gas & Electric had connected 146 megawatts of solar panels to its grid as of Nov. 1, accounting for 1.2 percent of its peak load. The company is adding 409 new net-metering customers a month, said Stephanie Donovan, a spokeswoman for the state's third-largest utility.


SDG&E can't collect about $18 million to $20 million a year in grid costs from customers with rooftop solar panels, according to Dan Skopec, vice president of regulatory affairs for San Diego's Sempra Energy, the utility's owner.


The utility will be shifting about $200 million in annual costs to customers without panels when the state reaches its cap, Skopec said. Solar customers "avoid charges, not just for energy, but also the costs of the transmission and distribution system," he said. "That's why we say it is not sustainable."
Pacific Gas & Electric, the state's biggest utility, will pass on about $700 million in annual costs to people without solar systems when the state hits the cap, according to Denny Boyles, a spokesman. Southern California Edison will transfer about $400 million annually, according to spokesman David Song, for a total of $1.3 billion from the three utilities.


That's about 3.9 percent of the $33.5 billion spent on electricity in 2010 in California, based on the latest figures available from the U.S. Energy Department.


"The problem exacerbates with each new system that goes on a roof," said Mark Bachman, an analyst at Avian Securities Inc. "Utilities will need to get reimbursed for their grid costs by a shrinking number of consumers."


California utility customers installed 245 megawatts of solar panels in 2011 and have already added more than 315 megawatts this year, according to the California Solar Initiative, a state program to encourage rooftop energy systems.
Solar growth

Installations of U.S. residential and commercial solar systems totaled about 1,050 megawatts in the first three quarters of the year, according to the Solar Energy Industries Association, compared with about 1,100 for all of 2011.

---

http://www.sfgate.com/business/artic...ts-4124277.php