The broken promise of solar energy

I first became interested in energy when I was in college in the mid-1980s. I took a class called “solar energy” where we spent most of the semester discussing things like the best angle for maximum heat transfer in parabolic solar thermal devices (which was about as exciting as it sounds).  Towards the end of the semester the professor introduced us to a solar technology that I had never heard of – photovoltaics.

Photovoltaics captured my imagination, and a lot of my academic and working life since. The idea of a high-tech device that converts sunlight to electricity with no moving parts and no fuel combustion struck me as amazing and wonderful – something out of a science fiction novel. Clean and safe electricity generation!  My fascination with photovoltaics led me to decide, after getting a B.S. in physics, to attend a graduate engineering program that focused on energy and atmospheric studies.  That work was fascinating – I got involved in projects like figuring out how to grow food on space stations, and I learned about the similarities between the way photovoltaics convert light to electricity and the way plants do the same thing through photosynthesis.  Then, I also learned that approximately 30% of the people (that was in the early 1990s; it’s about 13% now) in the world had no electricity in their houses. 

This led me to something of a crisis in conscience – how could I worry about what astronauts eat when a third of the people in the world didn’t have the same basic services that I take for granted – that my grandparents took for granted? The more I learned about the social and political aspects of energy the less I wanted to focus just on the technology.  So, I found myself entering the realm of economics and public policy.  This led me to think about whether technologies like photovoltaics could improve the lives of people living in unelectrified areas. 

Then, in the late 1990s I spent about four months in Mexico doing field research on a program that provided small Solar Home Systems in rural areas.  The systems consisted of a photovoltaic panel, a few lights, a (modified lead-acid automobile) battery, an outlet, and some switches and wiring.  I went to about a dozen rural villages and talked to the recipients of these systems.  What I found was that after a year or two most of these systems no longer worked and so had few benefits for the recipients, many of whom told us that the money spent would have been better spent on something else. Again and again recipients told us that they appreciated having a light in the house, but when the batteries died they could not afford to replace them.  Recipients also reported frustration that the systems provided only a small amount of power – not enough to use an iron, or to power a television and lights at the same time.  About half of the villages visited were indigenous communities where many residents did not speak Spanish and had trouble understanding the maintenance brochures and instructions given to them by the installers.

In most of these communities, residents told us that many families were so poor that they did not have enough to eat, and several of these villages received food assistance from the local government.  Residents told us that their primary needs included larger plots of land for farming, irrigation, better roads and transportation to get their products to markets, and better schools.

In a few of the communities we visited the results were better.  Those particular communities were all non-indigenous villages where residents spoke Spanish and had the financial means to replace batteries.  In one village, the solar home systems served as a stopgap for a few years as a promised distribution extension to the community was built.  The conclusion I reached in my dissertation was that to achieve success, small, decentralized renewable energy systems must be compatible with the social and cultural attributes of the communities in which they are located.

During this period of time, I regularly attended the annual Village Power Conference.  This conference, sponsored by the National Renewable Energy Laboratory, consisted primarily of white, upper middle class American and European economists and engineers, who gathered to discuss how solar home systems and other renewable technologies could improve the lives of the rural poor.  Energy professionals stood at the podium and extolled the virtues of their technologies.  “Children can do their homework at night!”  “Streetlights can provide safety!” “Women can make crafts and sew and sell those products for additional income!” “People will stay in the rural areas instead of migrating to the city!”

Most of those claims had little basis in reality, and some – such as the claim that electrification will result in less rural-to-urban migration – had been disproved by research (which shows that, in fact, rural electrification usually increases migration).  All of my experiences and research told me that the problems of the rural areas are far greater and far more pressing than just a lack of electricity.

I don’t mean to disparage the efforts of the people and organizations who piloted the use of photovoltaics and other renewables in developing countries.  Undoubtedly, they helped develop the market and the infrastructure for renewables, and they helped some – probably many – people.  There were certainly some women who sold products they made at night, some people who didn’t trip and fall on the way home in the dark, and children who wouldn’t have been otherwise able to do their homework.  In fact, I met an extremely bright, personable young man in the Mexican state of Hidalgo, who showed me around his small town and talked about how having light meant he could do homework until midnight, as he often needed to.  This young man traveled two hours a day to a neighboring city to attend secondary school because his town only had an elementary school.  The thing is, he was the only child in that village who was attending secondary school.

In the 1980s, PV seemed to me to be a silver bullet that could solve the world’s energy problems. I, and millions of others like me, imagined a solar array on every roof generating all the clean green electricity the occupants could use.  The more modern version has become the vision of the smart house – all electric and energy efficient, with a vehicle charging in the garage, solar panels on the roof, batteries in the garage, and smart devices managing energy use. 

What my experience in Mexico taught me was something that everyone who has worked in public policy for more than about a week knows – there’s no such thing as a silver bullet.  Changing the way we generate electricity, like solving just about every social problem, is a long, slow slog full of pitfalls and setbacks and complications and unintended consequences.  And providing “solutions” to the social problems of other people is impossible unless you put a lot of effort into understanding and working with the target communities.

So, why all these reminiscences of a realization which, life-changing though it was for me, happened 25 years ago? Because I see history repeating itself right now in California in the current debate about the compensation paid to rooftop solar customers.  The solar industry in California has become big business, and that industry has convinced thousands, maybe millions, of people that the “solar on every rooftop” goal is a worthy one that we must pursue at all costs. 

There’s a lot going on here.  The solar industry, like all industries, wants to sell as much of their product as possible.  They are upset because state regulators have decreased the compensation paid for the electricity generated by rooftop solar, which means that fewer people will be likely to buy or lease solar systems in the future. By promoting the “solar on every rooftop” goal, they’ve managed to mobilize thousands of people to fight against changes to the Net Energy Metering (NEM) tariff, which sets the rates that solar customers are paid for the electricity their panels generate.  State regulators argue those rates are currently too high, so that the value that solar customers receive is more than the value of the electricity they generate.  This means that solar customers are receiving a subsidy, and that subsidy is paid by the non-solar customers.  This is particularly problematic because the people with solar, as a group, are much more wealthy and more likely to be white than the people without solar.  Studies show that the “cost shift” – the amount of money that non-solar customers are subsidizing solar customers – is more than $4 billion per year, according to the California Public Advocate’s office.

The solar industry offers a number of arguments for continuing the generous NEM rates:

·       “Trust Us, Not the Utilities.” Many of their arguments have to do with utility greed and incompetence, which is well documented, and government incompetence and subservience to big business, which is also well documented.  In fact, there are so many reasons to distrust the government and utility companies that listing them all could take us into next week.  Nevertheless, trusting the solar industry instead is something we really should think twice about.  The solar industry may have its roots in the small band of intrepid environmentalists who fought for the Earth back in the days when no one else cared, but they’ve long since abandoned their hippie overalls for business suits. I don’t know how anyone who is suspicious of corporations could believe that trusting the likes of Elon Musk is a good idea.   And for people who consider themselves politically progressive to buy the claim that Florida Governor Ron DeSantis cares about the environment because he vetoed a bill that would decrease compensation for rooftop solar is gaslighting at its finest.  (And if you believe that the veto was unrelated to Elon Musk’s subsequent endorsement of DeSantis in the 2024 presidential race, I have a bridge in Brooklyn to sell you.)

·         “Rooftop solar saves everyone money” because it avoids both the need for transmission and distribution lines, as well as large amounts of land for the large, utility-scale solar projects that regulators argue are much cheaper to build.  Rooftop solar, and other customer programs like energy efficiency, do have some impact on the number of transmission and distribution (T&D) lines we need, but those lines get built for a myriad of reasons, most of which don’t change even when people generate a lot of solar electricity.  For example, the need for upgrading or building new T&D lines is largely dependent on “peak” (i.e., the hour that maximum usage occurs) energy demand, which usually occurs in evening hours when solar is not available.  Also, to operate an electric grid, you need to be able to turn generators on and off to match energy usage, and you need to be able to do so in particular locations.  Rooftop solar installations are scattered around the state, and are not “dispatchable” (i.e., cannot be turned on or off by the grid operator), so their ability to provide energy in specific areas in the hours most needed is limited.  Studies show that rooftop solar only avoids a small percentage of the cost of building, upgrading, and maintaining T&D lines.  In fact, in many cases rooftop solar increases the cost of maintaining distribution lines, since the electric grid was not built with the ability to facilitate the two-way flow of energy.  In addition, while there are certainly land-use issues associated with large solar installations, which does mean that there’s additional value to using rooftop systems, the cost of most utility-scale solar is still less than the cost of rooftop solar.  For all these reasons rooftop solar is not a simple substitute for utility-scale solar.

·       “If I put rooftop solar on my house, everyone benefits.”  This is the solar industry's version of trickle-down economics. I may receive a small environmental benefit from my neighbor’s solar panels, but that benefit is far less than the cost I’m paying to subsidize my neighbor’s installation.  Most of the value goes to my neighbor, and very little trickles down to me.

·       “We need all types of renewables to fight climate change – utility scale solar, rooftop solar, storage, etc.” Many solar advocates claim that we need to do everything we can to combat climate change – install all types of clean energy, all the time, everywhere.  But studies consistently show that the least-cost path to a clean electric grid requires only a modest increase in rooftop solar, because other technologies – utility-scale solar, wind, geothermal – are generally cheaper, and the amount of rooftop solar we do need can be obtained without providing subsidies.  For example, California’s integrated resource planning model, which analyzes how to achieve the state’s goal of making the grid 100% green by 2045 at the lowest cost to ratepayers, almost never includes rooftop solar in the portfolios it develops of needed future electricity resources – it is simply too expensive as compared with the alternatives.

·       “Rooftop solar provides jobs.” It is true that the rooftop solar industry has provided many new jobs in the past decade.  However, utility-scale solar generally provides better jobs, because most utilities are unionized and most solar companies are not, and union jobs provide higher wages, more benefits, and more worker protections.

·        “We need energy ‘independence,’ ”  This is one of the more predominant fallacies that solar advocates claim – I’ve heard people say time and time again that we need rooftop solar so that we can declare independence from our electric companies.  However, when you put solar panels on your roof, you are not asserting your “energy independence” because you are still connected to the grid and still a utility customer.  Only maybe 1% of all the rooftop solar in the United States is genuinely off the grid. The vast majority of photovoltaic panels in the U.S. are grid connected, and most of the hours of the day the system owner is getting most of their power from the grid.  Installing solar panels on your roof is just not like growing all your own vegetables – it’s more like having one pot of tomatoes on your balcony.

·       “We need to get back to our roots.”  The “we should all grow our own vegetables, dig our own wells, and generate our own energy with solar” vision is elitist, racist, and inherently undemocratic.  The electric grid offers service to everyone.  People can use as much or as little electricity as they need and everyone is charged the same price.  If we instead leave it to individuals to produce their own energy, what will happen is that poor people will have poor quality services, or none at all.  In other words, we would be privatizing the electricity industry. Privatization of public goods rarely, if ever, benefits anyone other than the rich.  And keep in mind that most poor people (as well as most urban dwellers) rarely have the space or ability to grow their own vegetables or dig their own wells either.

·       “Low and moderate income people are increasingly installing solar.  This has some truth to it, but the solar industry is distorting and manipulating statistics to make this seem like a larger and more significant trend than it is.*  Even if it is true that a higher percentage of rooftop solar users than in the past are low and moderate income households, that does not change the fact that the wealthier you are, the more likely you are to have solar panels on your roof.  In addition, a recent TIME article** reports that the rooftop solar industry has become primarily a seller of financial products, and their practices are deceptive and predatory.  Many of the low and moderate income homeowners installing solar are responding to the solar industry’s offer of seemingly attractive but actually costly financial schemes.  And, as TIME points out “The idea that we need to convince tens of thousands of Americans who can’t afford it to put solar on their rooftops shifts the responsibility for addressing the climate crisis from the entities who could really make a difference—big companies and governments, for example—and onto individuals who are good targets for financing companies.”

·       “We shouldn’t be taxed for having solar.” Asking people to pay their fair share is not taxation.  However, asking a government regulatory body to make other people pay your fair share amounts to taxation of those other people, and so in reality, non-solar customers are currently the ones being “taxed.”

·       “We should be making solar panels more accessible for all communities, including low income communities.”  And getting back to my original point, for the most part, poor people don’t need solar panels.  Have any of the solar advocates actually gone to a poor community to ask? Seriously, where are the surveys of low-income Californians asking whether or not solar is a priority for them?  And no, just because you personally own solar panels and don’t consider yourself rich does not mean that the approximately 35% of Californians who earn less than 200% of the Federal poverty level feel the same way.  If you care about poor people, do something about homelessness, unemployment, racial inequality, lack of healthcare, the high cost of housing, low wages, underfunded schools, and drug addiction.  Then maybe we’ll talk about solar panels.

 

*For example, I’ve seen several  websites that state that “42% of the rooftop solar market is now in working-class and middle-class neighborhoods,”  with a link to this calculator, created by Lawrence Berkeley National Laboratory (LBL).  However, this statement is a distortion of the statistics found on the LBL site, and is misleading.  A closer look at the LBL tool indicates that in 2020, 72% of installations went to people who earn more than the CA median income, and that the highest-earning 20% of people in California own 46% of the solar installations, the next highest 20% owns 25.8%, the middle 20% owns 16.5%, the next to lowest has 8.8%, and the lowest-earning 20% owns 2.9%.  These breakdowns have not changed much over the 10 years that the LBL tool provides data for.

**”The Rooftop Solar Industry Could Be On the Verge of Collapse,” TIME magazine, January 25, 2024,  https://time.com/6565415/rooftop-solar-industry-collapse/