With state and federal renewable energy subsidies continued into Obama’s second term, the survival of rooftop solar installations can continue. In California, these combined rooftop solar energy panel subsidies and tax credits are inflating the electric bills of homes and businesses that don’t have the solar panels – adding an extra $1.3 billion to their annual electric power bills. State and federal solar panel subsidies can cover up to two-thirds of the cost of solar panel installations.
Power utility companies in California are required to buy back electricity from private home and business solar operations at the same price they resell it to other customers, meaning utilities earn nothing to cover fixed costs. Myopic California utility regulations cause rises in non-solar customer electricity rates to make up the difference, according to Southern California Edison.
As more homes and businesses get covered in solar panels, higher electricity rates on non-solar consumers promotes conflict between renewable-energy advocates and electric power companies have started a backlash in California and 42 other states with similar energy policies. “You get into a situation where you have a transmission and distribution system with nobody paying for it,” said an Edison International vice president of regulatory operations -- California’s second-largest electric utility.
About 20,000 customers of San Diego Gas & Electric have connected 146 megawatts of solar panels to its grid, accounting for 1.2 percent of its peak load. SDG&E can’t collect about $18 million to $20 million a year in electric power grid costs from customers with rooftop solar panels. Thus, the utility will be shifting about $200 million in annual costs to customers without solar panels under state-capped limits.
Southern California Edison will transfer about $400 million in annual costs to non-solar customers under its state cap. Pacific Gas & Electric, the state’s biggest electric utility, will pass on about $700 million a year in charges to non-solar customers, for a total of $1.3 billion in new, non-solar customer charges from California’s three major electric utility companies. (Bloomberg News, Dec. 2012)
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