The problem with California going all-in on solar energy

The problem with California going all-in on solar energy
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The California Energy Commission has approved a new regulation requiring all new home construction to include solar panels. This, in spite of California having the highest housing costs in the country and a widespread housing shortage.

 Much of the underlying rationale for the requirement stems from California’s concerns about climate change and the state’s ambitious low-carbon objectives. Coincidentally, on the same day of the commission’s solar mandate announcement, California’s EPA released a report on the impacts of climate change on the state.

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As the battle of ideas over America’s power sector continues, a few points are worth raising about California’s solar requirement and how California’s renewables-centric approach compares with other states where the approach is more diversity-centric. Once case being the state of Georgia, home to the only nuclear construction project in the U.S.

 

First, California is, in essence, requiring each new home construction to serve double-duty as a decentralized independent power producer for generating electricity using a preferred energy resource — solar. Given the context of California’s 50 percent-by-2030 renewables goal for electricity and its recent decision to shut down the state's last remaining nuclear plant, this new regulation is a clear case of using policy to choose winners. 

Second, California has a very progressive net-metering policy that provides credit to customers with solar PV systems for the full retail value of the electricity their system generates.

Moreover, solar PV system owners who generate a net surplus over the course of the year can receive payment for that surplus under special utility tariffs. This creates financial conditions that may very well result in the average saving of $80 per month on a customer's utility bill as projected in the new regulation.

However, it comes at the expense of customers who don’t have, or can’t afford, solar PV systems, thus creating cross-subsidies. Moreover, a California resident can save the projected $80 per month fairly quickly since the average residential rate is about 19.15 cents/kWhr compared with a state such as Georgia where the rate is around 10.83 cents/kWhr.

Lastly, California’s energy policy approach whereby nuclear is abandoned, renewables are emphasized and solar is required for new home construction, is just one example of an individual state’s preference in deciding the best way forward for its electric power sector and citizens. 

By comparison, the state of Georgia is taking a much different approach with its own transition from coal to natural gas, a steady integration of utility-scale solar, and the construction of two new nuclear reactors at Plant Vogtle.

While the Vogtle project has faced challenges with meeting timelines and staying within budget following a 30-year dormancy in U.S. nuclear power projects, the construction of these reactors represents a vital contribution to national security as it sustains activity in the U.S. nuclear power sector and signals to the world that the U.S. has not altogether abandoned its legacy role of responsibility and stewardship in the global nuclear cycle — a role that has provided the world with unparalleled leadership and standards in safety. 

It’s worth noting that in 2009 the Georgia state legislature passed a bill allowing a Nuclear Construction Cost Recovery (NCCR) tariff for recovering the cost of financing associated with the Vogtle reactors, which is saving ratepayers millions of dollars in interest charges. This is in contrast with California’s solar PV mandate, which is projected to increase monthly mortgages by $40. 

While Vogtle will generate electricity with a capacity factor of 93 percent over 60-plus years, California’s mandated solar PV systems will operate at a capacity factor of about 18 percent over 20 to 25 years.

These are two fundamentally different ideologies for investing in zero-carbon energy resources. Moreover, if California is applauded for battling climate change by way of its solar mandate and other renewable energy efforts, then Georgia certainly deserves applause for fighting that same battle, yet also making critical contributions to national security with new nuclear power construction at Vogtle.

Nonetheless, this reflects the right of individual states to govern their energy policy under the auspices of their respective state leadership. It also reflects the reality that the U.S. remains locked in a battle of ideas among various states as to how the nation’s electric power sector should be organized in order to meet the multiple objectives of reliability, affordability, safety, carbon reduction and national security. 

While this battle may be inevitable due to divergent ideologies across state lines, it is imprudent and altogether unnecessary for U.S. nuclear power to become a casualty in that battle because the prospect of an America without nuclear power not only calls into question whether the U.S. can meet low-carbon objectives reliably and affordably, it also represents national security risks with which America should never experiment.

David Gattie is an associate professor of engineering in the College of Engineering at the University of Georgia. His research focus is energy policy and the electric power sector, and he teaches courses in energy systems and security for the Master of International Policy program in UGA’s Center for International Trade and Security. Prior to UGA, he worked 14 years in private industry as an energy services engineer and an environmental engineer. The opinion expressed here is his own.