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Rooftop solar is four times more expensive in America than it is in other countries. It’s also good for the climate. Should we even care about its high cost?
Yes, says Severin Borenstein, an economist and the director of the Energy Policy Institute at the University of California, Berkeley’s Haas School of Business. In a recent blog post, he argued that the high cost of rooftop solar will shift nearly $4 billion onto the bills of low- and middle-income Californians who don’t have rooftop solar. Similar forces could soon spread the cost-shift problem across the country.
On this week’s episode of Shift Key, Rob and Jesse talk with Borenstein about who pays for rooftop solar, why power bills are going up everywhere, and about whether the government should take over electric utilities. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Severin Borenstein: Let me start by saying, there are two big problems with the way we do this. One is the equity issue, which I’m sure we’ll get back to, which is that it turns out this extra money, when you get it by charging people for kilowatt-hours, takes a disproportionate share of the income from low-income people.
The other is, when you set a price for electricity that is way above the actual cost of providing that electricity, it’s going to discourage people from electrifying things. Now, it’s also going to discourage people from just using more electricity, and people who love conservation say, well, we should have higher rates to encourage conservation. I think that’s misguided beyond some point, and we are way beyond that point in many areas.
But setting that aside for a moment, we need people to electrify. If we’re going to reduce greenhouse gases, the way we’re going to electrify [...] is by people switching to electric transportation instead of burning gasoline, and people switching to electrification for heating, hot-water heating, cooking, clothes drying, all the things where you have a choice of using natural gas. In both of those cases, if you overcharge for electricity, you are discouraging people from doing that sort of electrification.
I will give you the extreme example — again, in California. Right now, even with California’s well known very high gasoline prices, gasoline and electricity are about at parity. That is, you don’t save money fueling your car with electricity. If you compare a Prius to a Tesla Model 3, which are about the same interior size, you don’t save money when you switch to a Tesla Model 3, for fueling. That’s nuts. You should be saving three-quarters of the cost of fueling by switching to electricity.
Likewise, when we start talking about heat pumps, now, there’s one other aspect of this which is often not appreciated. Not only are we overcharging for electricity, we are undercharging for gasoline. So even with all the taxes — and I’ve done a bunch of work on this — if you look at the price of gasoline almost everywhere in the country ... Actually, if you believe the social cost of carbon is over $100 a ton, everywhere in the country, gasoline is underpriced. We’re not charging enough to reflect the full cost.
So it’s even worse than just the overpricing of electricity. We’re really putting our thumb on the scale in the wrong direction when it comes to getting people to electrify transportation. And it’s also true with natural gas, though to a lesser extent. If we’re going to consider the social cost of carbon over $100 a ton, natural gas is also underpriced pretty much everywhere in the country.
So we want people to adopt heat pumps. We want people to put in heat pump water heaters. But we’re really sending economic signals to tell them not to.
This episode of Shift Key is sponsored by…
Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.
Music for Shift Key is by Adam Kromelow.
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Did a battery plant disaster in California spark a PR crisis on the East Coast?
Battery fire fears are fomenting a storage backlash in New York City – and it risks turning into fresh PR hell for the industry.
Aggrieved neighbors, anti-BESS activists, and Republican politicians are galvanizing more opposition to battery storage in pockets of the five boroughs where development is actually happening, capturing rapt attention from other residents as well as members of the media. In Staten Island, a petition against a NineDot Energy battery project has received more than 1,300 signatures in a little over two months. Two weeks ago, advocates – backed by representatives of local politicians including Rep. Nicole Mallitokis – swarmed a public meeting on the project, getting a local community board to vote unanimously against the project.
According to Heatmap Pro’s proprietary modeling of local opinion around battery storage, there are likely twice as many strong opponents than strong supporters in the area:
Heatmap Pro
Yesterday, leaders in the Queens community of Hempstead enacted a year-long ban on BESS for at least a year after GOP Rep. Anthony D’Esposito, other local politicians, and a slew of aggrieved residents testified in favor of a moratorium. The day before, officials in the Long Island town of Southampton said at a public meeting they were ready to extend their battery storage ban until they enshrined a more restrictive development code – even as many energy companies testified against doing so, including NineDot and solar plus storage developer Key Capture Energy. Yonkers also recently extended its own battery moratorium.
This flurry of activity follows the Moss Landing battery plant fire in California, a rather exceptional event caused by tech that was extremely old and a battery chemistry that is no longer popular in the sector. But opponents of battery storage don’t care – they’re telling their friends to stop the community from becoming the next Moss Landing. The longer this goes on without a fulsome, strident response from the industry, the more communities may rally against them. Making matters even worse, as I explained in The Fight earlier this year, we’re seeing battery fire concerns impact solar projects too.
“This is a huge problem for solar. If [fires] start regularly happening, communities are going to say hey, you can’t put that there,” Derek Chase, CEO of battery fire smoke detection tech company OnSight Technologies, told me at Intersolar this week. “It’s going to be really detrimental.”
I’ve long worried New York City in particular may be a powder keg for the battery storage sector given its omnipresence as a popular media environment. If it happens in New York, the rest of the world learns about it.
I feel like the power of the New York media environment is not lost on Staten Island borough president Vito Fossella, a de facto leader of the anti-BESS movement in the boroughs. Last fall I interviewed Fossella, whose rhetorical strategy often leans on painting Staten Island as an overburdened community. (At least 13 battery storage projects have been in the works in Staten Island according to recent reporting. Fossella claims that is far more than any amount proposed elsewhere in the city.) He often points to battery blazes that happen elsewhere in the country, as well as fears about lithium-ion scooters that have caught fire. His goal is to enact very large setback distance requirements for battery storage, at a minimum.
“You can still put them throughout the city but you can’t put them next to people’s homes – what happens if one of these goes on fire next to a gas station,” he told me at the time, chalking the wider city government’s reluctance to capitulate on batteries to a “political problem.”
Well, I’m going to hold my breath for the real political problem in waiting – the inevitable backlash that happens when Mallitokis, D’Esposito, and others take this fight to Congress and the national stage. I bet that’s probably why American Clean Power just sent me a notice for a press briefing on battery safety next week …
And more of the week’s top conflicts around renewable energy.
1. Queen Anne’s County, Maryland – They really don’t want you to sign a solar lease out in the rural parts of this otherwise very pro-renewables state.
2. Logan County, Ohio – Staff for the Ohio Power Siting Board have recommended it reject Open Road Renewables’ Grange Solar agrivoltaics project.
3. Bandera County, Texas – On a slightly brighter note for solar, it appears that Pine Gate Renewables’ Rio Lago solar project might just be safe from county restrictions.
Here’s what else we’re watching…
In Illinois, Armoracia Solar is struggling to get necessary permits from Madison County.
In Kentucky, the mayor of Lexington is getting into a public spat with East Kentucky Power Cooperative over solar.
In Michigan, Livingston County is now backing the legal challenge to Michigan’s state permitting primacy law.
On the week’s top news around renewable energy policy.
1. IRA funding freeze update – Money is starting to get out the door, finally: the EPA unfroze most of its climate grant funding it had paused after Trump entered office.
2. Scalpel vs. sledgehammer – House Speaker Mike Johnson signaled Republicans in Congress may take a broader approach to repealing the Inflation Reduction Act than previously expected in tax talks.
3. Endangerment in danger – The EPA is reportedly urging the White House to back reversing its 2009 “endangerment” finding on air pollutants and climate change, a linchpin in the agency’s overall CO2 and climate regulatory scheme.