Unpacking the Solar Cost Shift Fallacy: How Pro-Utility Groups in CA Mislead the Public

[Beno196216]

This topic warrants an in-depth discussion. Where to begin? The "cost shift" narrative pushed by the PG&E/IBEW 1245 “Strategic Opportunities Committee” is a classic case of "equity washing"—a term coined by the Coalition for Environmental Equity and Economics. For those unfamiliar, the Strategic Opportunities Committee is a joint PG&E and IBEW 1245 group formed in 2022, dedicated to undermining rooftop solar competition. Unfortunately, they’ve had lots of success.

The crux of their argument is that rooftop solar systems are funded by low-income utility ratepayers, which is a complete misrepresentation. In reality, solar power helps lower-income households save on their electricity bills. Admittedly, solar systems do require home ownership, which can be costly. However, California has reduced solar bill credits so drastically that it’s almost as if they want people to give away their solar energy for free.

I’ll be posting links to lobbying materials that challenge this misleading "cost shift" narrative in this thread. Here are a few to get started:
Coalition for Environmental Equity and Economics Digital Lobbying Tools
Solar Rights Alliance - Stand Up for Solar "The Utilities Are Lying About Rooftop Solar"

 

[Patrick Cohen]

OMG, this is a goldmine of a topic for gathering info and insights! Kudos for kicking it off. I don’t have anything to add right now, but I’ll definitely be keeping an eye on this and chiming in whenever I get useful tidbits to help counter the utility and IBEW 1245's cost shift shenanigans. Their spin game is as impressive as Trump’s tweets!

 

[SThayer66]

Following and will be contributing...

 

[SolarPro415]

Following and will contribute too !

 

[Patrick Cohen]

the Solar Rights Alliance just released a helpful white paper on debunking the false cost shift narrative. Here's a link to the article:

New study shows how CA rooftop solar consumers save all ratepayers $2.3 billion​

 

[AlyssaB]

In case anyone is looking for a simple way to explain the flaws in the CPUC's Avoided Cost Calculator (ACC), here is a summary of a few key points about how the ACC does not fully capture the real value of solar energy and other renewable resources:

1. Underestimates Grid Value
- Problem: The ACC tends to underestimate the value of solar in supporting grid reliability. Solar energy reduces the need for expensive fossil fuel plants, especially during peak demand hours (like hot summer afternoons), but the ACC doesn’t always account for how much solar helps reduce grid stress or how it can be paired with storage to provide power when it's needed most.
- Why it matters: This leads to an undervaluation of solar's grid services, like providing backup power and avoiding blackouts.

2. Ignores Long-Term Savings
- Problem: The calculator primarily focuses on short-term avoided costs, like the immediate cost of power generation and infrastructure. It doesn’t fully capture long-term savings from cleaner, more sustainable energy systems, which could reduce future costs related to climate change and pollution.
- Why it matters: The failure to include long-term environmental and health benefits (such as cleaner air and avoided climate change impacts) means the ACC doesn't reflect the full value that solar brings to society.

3. Outdated Assumptions
- Problem: The ACC uses static assumptions about energy prices, technological advancements, and market conditions. For example, it might not properly reflect the rapidly declining costs of solar panels and energy storage or the increasing value of decentralized power generation.
- Why it matters: This means the ACC may underestimate how much solar power will cost in the future and how much it will help avoid the need for fossil fuels and new infrastructure.

4. Doesn’t Account for Non-Energy Benefits
- Problem: The ACC mainly focuses on economic factors, like the cost of electricity generation, but it overlooks other important benefits of solar, such as job creation, health benefits from reduced pollution, and the economic development benefits of local, renewable energy.
- Why it matters: By not factoring in these broader, non-energy benefits, the ACC doesn’t reflect the full societal value of solar energy.

5. Excludes Certain Grid Costs
- Problem: The ACC may ignore or understate certain grid integration costs of renewables. While it accounts for some integration costs (like balancing supply and demand), it may not fully account for costs related to managing more intermittent renewables or how they interact with energy storage.
- Why it matters: Solar's role in supporting the grid with smart technology or energy storage (which stores solar for later use) isn't always valued properly in the ACC.

Conclusion:
In simple terms, the Avoided Cost Calculator sometimes underestimates the true value of solar energy because it focuses too narrowly on short-term costs and doesn’t fully account for long-term benefits, grid support, and non-energy advantages like job creation and cleaner air. It also tends to use outdated assumptions that don’t reflect how rapidly solar technology is improving. This can lead to lower compensation for solar customers and missed opportunities to promote a cleaner, more resilient energy system.

 

[Jared_H]

"It's as simple as a bowl of carrots"​

 

[Jared_H]

Response to Borenstein’s critique of our assessment of the benefits of rooftop solar​

Response to Borenstein’s critique of our assessment of the benefits of rooftop solar

Borenstein’s critique of our analysis acknowledges several key errors by PAO, ignores legal precedents, and uses the wrong analytic tool for the wrong purpose.

mcubedecon.com

 

[SarahT415]

CA lawmakers are demanding ways to lower electricity costs for ratepayers, yet they are simultaneously allowing the utilities to destroy the rights of homeowners to buy their own solar systems, which helps them save on their electric bills.

This article does a good job pointing out the problems with groups advising the PUC on the utility financial models.

https://www.sacbee.com/news/politics-government/capitol-alert/article300706654.html

 

[SarahT415]

CA lawmakers are demanding ways to lower electricity costs for ratepayers, yet they are simultaneously allowing the utilities to destroy the rights of homeowners to buy their own solar systems, which helps them save on their electric bills.

This article does a good job pointing out the problems with groups advising the PUC on the utility financial models.

https://www.sacbee.com/news/politics-government/capitol-alert/article300706654.html

Actually, I meant to share this article https://prospect.org/environment/2025-02-21-secret-society-raising-your-electricity-bills/

 

[Phil Davidson]

California’s ratemaking process is broken. No doubt. We need more op eds from people speaking up.
http://Guest editorial: Why are our PG&E bills so outrageous?

 

[Bruce Thompson]

Great article in the LA Time today with good research on exposing the false cost shift narrative being pushed by pro-utility groups:

My fav quote: "Although general inflation increased by about 18% from 2019 to 2023, the analyst said, rates charged by the three utilities have climbed 48% to 67%."

California officials push to cut energy credits to households with rooftop solar panels​

 

[Paul Osburn]

utility profits are another reason the high utility costs for non-solar customers.
https://apple.news/Ak6sGfcJgSKW1enjGxQhNSg
PG&E Asks to Raise Rates Again and Pay Shareholders Higher Profits
California’s largest investor-owned utility asked state regulators to approve increased compensation for shareholders, saying it’s needed to attract investors. Aka- people making money off of nonsolar owners…