The utility giants are trying to monopolize solar by concentrating it in a few large solar plants under their control. They claim it's cheaper and more efficient than decentralized alternatives. Despite their PR and marketing efforts, the truth is that rooftop solar has an crucial role to play in expanding America's clean-energy system and ensuring that it is resilient. And rooftop solar's perks go far beyond purely financial cost-benefit analyses.
The utility argument was most clearly stated in a very pro-large scale solar Reuters article, in which industry advocates cited lower costs and economies of scale as to why their facilities generate energy at far lower costs than rooftop systems.
"Unsubsidized utility-scale solar power costs $50 to $70 per megawatt-hour (or 5 to 7 cents a kilowatt hour), compared with $52 to $78 for the most efficient type of gas plant, according to a 2015 study by investment bank Lazard," Reuters reported.
"Generating power from residential rooftop panels is far more expensive, ranging from $184 to $300 a MWh before subsidies, the report said."
Rooftop solar, on the other hand, generates power right where it's needed. And, if coupled with a home battery system such as the Tesla Powerwall, it can even provide energy when the sun is not shining. A rooftop system reduces stress on the grid, utilizes underused space and even helps keep buildings cool. If we put solar panels on more rooftops, that could generate half of America's energy needs without building any new transmission lines or large-scale plants.
Rooftop solar also employs far more people than utility-scale solar, which means more well-paying jobs that are kept within communities across America. This is vitally important as rooftop solar expands into low-income communities -- which can provide opportunities for economic empowerment, if done properly.
Why do utilities want to focus on large-scale plants? Quite simply, control. By controlling both the means of production and the distribution systems, utilities can make a lot more money. That's why they promote the benefits of large-scale developments while ignoring the pitfalls. Independent studies – those not conducted by industry fronts – come to a nearly unified solution.
“The accumulating national literature on costs and benefits of net metering ... concludes— whether conducted by Public Utility Commissions, national labs, or academics — that the economic benefits of net metering actually outweigh the costs and impose no significant cost increase for non-solar customers,” Mark Muro with the Brooking Institute wrote in a blog post. “Far from a net cost, net metering is in most cases a net benefit — for the utility and for non-solar rate-payers.”
In fact, utilities have not only stood in the way of rooftop solar, but they've actively tried to kill it. We all know about how changes to net metering essentially halted rooftop solar expansion in Nevada, despite the fact that rooftop solar provided a $7 million net benefit to all Nevada ratepayers. Of course, utilities don't benefit when ratepayers benefit. They benefit when ratepayers pay more.
That's why in some states, like Florida, it's essentially illegal to put panels on your own home. The Reuters article amazingly highlights these states, which restrict net metering and rooftop access, as examples of why large-scale solar is better without giving any context.
PG&E and Southern California Edison even tried to defeat rooftop solar in America's sunniest state, California, home to more solar than the rest of America combined. But thankfully environmentalists and solar advocates defeated their efforts.
An ideal system would be one with a diversity of sources, and a balance between not only large-scale solar and rooftop solar, but other alternative energies too, such as wind, small-scale hydro-power and, of course, energy storage. But putting all of our energy resources into one bucket, controlled by a single entity, is a recipe for disaster. Rooftop solar must expand to its full potential, as it is a crucial part of our energy future, no matter what utilities say.
Image credit: Mobius via Wikimedia Commons
Nithin Coca is a freelance journalist who focuses on environmental, social, and economic issues around the world, with specific expertise in Southeast Asia.