Fairness and Net Metering for Solar

What follows is a copy of a letter I just sent to State Senator Tom Berryhill and Assembly Member Frank Bigelow:

Of all the issues surrounding solar energy, including some unfortunate scandals, net metering for small producers is probably the most contentious presently. The California Legislature and the California Public Utilities Commission seem engaged in a turf war over regulatory powers. Currently small rooftop producers such as myself in PG&E territory are paid about four cents per kilowatt as spot market producers. But since small business or residential producers cannot sell to anyone else, we are not spot market participants. And while many special treatment environmental proposals abound, the fairest and the one endorsed by conservative economists is receiving the wholesale price for electricity. Assuming that wholesale is half of retail, my rooftop installation would earn me three times as much money as it does now. Multiplying that by all the similar rooftop solar equals a significant amount of money and an unknown amount of PG&E’s revenue.

It appears that all the various subsidies that make small solar installations feasible for homeowners are flowing through indirect means from the taxpayer to PG&E’s bottom line. Having them pay the fair wholesale price and ending subsidies seems like a sensible solution for both the small solar producer and the taxpayer. While some may argue that the subsidies were necessary to jump start the industry, that’s irrelevant now. Subsidies should end, and not surprisingly, they have bred an inefficient industry. The median installation cost of 49 cents per kilowatt in the US compares with 18 cents per kilowatt in Germany. The American solar industry is beginning to make changes and can become vastly more efficient. Also needing to be become efficient and modernized, and essential for national security, is the now underway rethinking of the grid caused in part by the impact of many new small and intermittent producers.

Hardly needing to be repeated, PG&E has a powerful lobby in Sacramento. But I am asking you to take on this issue because of fairness (perhaps crony capitalism?) and because of what I believe is widespread public support as witnessed by the coalition in Georgia between the tea parties and the Sierra Club.