Why net metering

The lens we view the expansion of solar programs in California must be the ability to pencil out the cost of installation. How do we realign the subsidies that PG&E receives so that smaller local producers can be competitive? The model that makes sense is something simple like Germany's or a combination of all the programs, if we want to get beyond the rich and profitable. We may also want to get beyond the RECs. PG&E is just not going to get them from this governor as he said in the SB451 veto in October 2007.

Our objectives here are:

1- There is a sense of urgency to transition to clean fuels. We are over-reliant on foreign oil to the detriment of our national security, peak oil, green house gases are impacting critical infrastructure like water and fire, petrochemical in the food supply and competition with ethanol are impacting prices, cancer, asthma, pollution, oil wars, burden public health- all because of the costs of using fossil fuels. If we want to make the transition to clean sources of energy, we have to STOP obsessing about our past investments in a fossil-fuel based infrastructure. Trying to recoup rate-payer investments in T&D will only hobble our efforts to make the switch. T&D, if it remains an issue, should be based on what the market will bear.

2- The governor wants to expand solar in CA and has provided many programs to do so including SB1.

3- MPR does not pencil out. It is the COMBINED EFFECT of the present set of programs – Accelerated Depreciation, Federal Tax Credit, PGE rebate, and Retail Net Metering (32c/kWh on-peak) – and bank financing that gets rich, profitable, and creditworthy companies to install solar. If any of the subsidies are withdrawn, then the amount of solar installed will also decline because the returns on investment in solar become less attractive compared to alternate investments. We need more, not less, subsidies if we are to expand to more users. Looking at the various bill in the 2008 legislative calendar we can see that PG&E's opposition stems from their stated intent to recoup sunk costs in T&D.

4- The legislature recognizes the need to expand solar installations and the benefit of locally produced power for efficient transmission. That is why we got feed in tariffs and equal access to the grid. We copied Germany which in addition to feed in tariffs and equal access also passed a guaranteed rate of about $70c per kWh for 20 years. That made people go out and rent roofs to install solar so that they could have access to the income. Germany became the largest installer of solar in the world.

5- The legislature promotes efficiency by charging variable rates so that high users pay considerably more for making the system unstable. If a solar electricity producer is NOT compensated for his excess electricity production (beyond retail net metering), he is being discouraged from implementing energy efficiency measures as they become technically viable. This contravenes California’s loading order of paying for energy efficiency before energy generation.