CAPUC Report: Rooftop Solar “Net Metering” Program Benefits Higher Income Customers and is Shifting Additional Costs to Lower Income Customers

A report issued by the California Public Utilities Commission  (CAPUC),  “California Net Energy Metering (NEM) Draft Cost Effectiveness Evaluation, indicates that NEM rates for solar rooftop generation mainly benefit  higher income customer participants and shift  costs to other customers, including lower income households less likely to install solar rooftop units.

The CAPUC report says the NEM program shifted $254 Million  to non NEM customers in 2012, and the report projects it will shift $1.1 Billion/year in added costs to other customers by 2020. (p 69).

California’s Solar Net Metering participants are higher income households:  “customers installing NEM systems since 1999 have an average median household income . . . of $91,210, compared to the median income in California of $54,283 and in the IOU service territories of $67,821.”  (p. 11).  

New York is considering a major new initiative, “the REV,” which may expand programs that, like California’s, could have the effect of shifting costs of distributed renewable generation from participants to other customers.  This raises serious equity and affordability concerns.  New York’s low income utility customers are already suffering from high rates, large debt to the utilities, shutoff threats and shutoffs.  See CATCHING UP IS HARD TO DO – NEW YORK’S UTILITY CUSTOMERS AND THE GREAT RECESSION.

Gerald A. Norlander


At a conference regarding distribution system restructuring,  PSEG CEO Ralph Izzo is said to have

“noted that distributed energy resources are far less efficient than the grid, calling rooftop solar’s load factor “fairly pathetic.” The current subsidies for rooftop solar may be creating “enthusiasm for potential over-generation” and placing a greater burden on lower-income utility customers, Izzo observed.

“If the owners [of rooftop solar systems] are high-disposable income people benefiting from market mechanisms called solar renewable energy credits or investment tax credits,” Izzo said, “I would just tell you we are driving the system to one of the most highly regressive, poorly designed social solutions to a nonexistent problem.”

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