The energy haves and have-nots

Will rooftop solar owners get off the grid — and leave other power users in the dark?

  • Andres Quiroz, an installer for Stellar Solar, carries a solar panel during installation at a home in Encinitas, Calif. in 2012. Stellar Solar installs residential and commercial solar panels in the San Diego area.

    Sam Hodgson/Bloomberg via Getty Images

Carol Flint has the domestic carbon footprint of a gnat. On the roof of the Santa Monica, Calif., home she shares with her husband, Steve Jones, two dozen photovoltaic solar panels transform sunlight into electricity; by night, a plug-in electric hybrid Chevy Volt discharges stored-up watts for distribution to the grid by their utility, Southern California Edison. Flint almost never puts gas in the car, and in all but the darkest winter months, the couple generates more electricity than they use; the utility pays them for the excess. (Last year, they got a check for $129.). “I don’t like it when we have to buy off the grid,” Flint says. “I’m like, ‘Damn! We should have turned off more lights.’ ”

When I rode in the backseat of Flint’s planet-saving car recently, I thought about how excellent it would be if we could all live like she does. The latest, and ever more dire, report from the Intergovernmental Panel on Climate Change warns that droughts, floods and rising seas are now inevitable  – the consequences of our dirty energy consumption. Our slim hope for a reprieve turns on how fast we can act to forestall the damage. Flint and Jones prove that the technology already exists to live a nearly carbon-free life, without shredding ecosystems for solar farms or constructing new towers and wires to transport wind energy.

It does, however, take money. Flint has produced and written for several hit television shows, including ER and The West Wing (she’s currently a producer on the USA Network show Royal Pains); Jones is the president of an international horticulture company, Green Fuse Botanicals. They can afford the $30,000 hybrid car; they paid up-front for their solar array. They are aware that they occupy an energy elite: Even at today’s historic low prices, rooftop solar still costs several thousands of dollars, and even a no-money-down lease from a company like Solar City requires a credit score of 680.

Nor are cash and credit ratings all that stand in the way of everyone deploying Flint’s solution. Logistical and geographical limitations abound. Some of us live in multi-unit buildings, or under tree canopies, or in places too dark or foggy to harness much sunlight. Some of us just don’t have enough roof.

The technology already exists to live a nearly carbon-free life, without shredding ecosystems for solar farms. It does, however, take money.

But at least we still have reliable electricity coming into our homes. We don’t actually need our own solar array to run our lights and computers; we still have the electrical grid, and the utilities that contribute to its maintenance. The Flint/Jones household still relies on that grid, too, to bring them electricity at night and on the rare rainy day, like a big, diffuse battery spread across the transmission wires.

One day, however, they may not need to. One day soon, many energy analysts predict, people with rooftop solar will also have batteries, fuel cells and microturbine generators to complement their solar when the sun goes down. In that case, some of the utility companies’ best customers could quit the grid and go it alone, leaving even fewer people to pay for the maintenance of transmission lines, substations and control rooms with smart-grid software. Rates will then rise for the rest, prompting yet more customers to defect, and driving rates up more: The dreaded utility death spiral.

CEO David Crane of the energy wholesaler NRG Inc. forecasts that utilities will soon go the way of the U.S. Postal Service, persisting only “to serve the elderly or the less fortunate,” he told BusinessWeek, while “the rest of the population moves on.” And that will leave us – the apartment dwellers, the socked-in, the working stiffs with 650 credit ratings – to pony up for a deteriorating electrical distribution system that feeds evermore reluctantly into our unlucky homes. At which point we might discover that our well-fed utility, along with the electrical grid it helped to maintain, was an awfully nice thing.

* * *

Universal access to electricity is a value that’s been embedded in our culture since the mid-1930s, when President Franklin D. Roosevelt ruled by executive order that farmers deserved lights, too. (Congress agreed, and later passed the Rural Electrification Act of 1936). Before then, hard-to-reach rural customers and those too poor to consume much beyond the wattage of an evening table lamp had no guarantee of reliable electrical service, mostly because it wasn’t in the provider’s free-market interest to serve them. A decade after the law began providing low-interest loans and grants for distribution networks, rural access to electricity jumped from 11 percent to 50 percent; by 1953, almost everyone in the country who wanted electricity had it.

In a Center for American Progress report last summer called “The Electrical Divide,” researchers Richard Caperton and Mari Hernandez warned that we may be on the verge of reversing that trend. Rooftop solar installations grew exponentially in the U.S. last year; storage – and defections – may not be far behind. “If these deeply transformative changes in the U.S. power sector are not managed properly,” the authors write, “21st century America could see an emerging electrical divide not unlike the digital divide of the late 20th century.” (For a taste of what the latter is like, read Emily Guerin’s recent story in this magazine: “Imagine the horror,” she writes, “of trying to navigate with dial-up.”)

Hernandez and Caperton floated several solutions, including expanding the federal Low-Income Home Energy Assistance Program (LIHEAP) to subsidize rooftop solar and other kinds of “distributed” generation – energy produced close to the people that use it. Federal and state governments could also offer financing for shared community solar projects. In 2010, California took $14.7 million in LIHEAP funds and called for energy providers to pitch efficient ways to spread solar out to low-income communities; the program resulted in close to 1,500 new solar installations on multi-family buildings and single-family homes in two years. “I was disappointed to see that it wasn’t renewed after 2012,” Hernandez says. “I haven’t seen anything else like it that addresses an energy divide.”

In fact, California has two other programs to subsidize solar. One, the Single Family Affordable Solar Housing program, has put solar on close to 4,000 homes since 2008; a similar fund for multi-family dwellings has outfitted just under 300 buildings. GRID Alternatives, the Oakland, Calif.-based nonprofit that manages the state’s single-family program, also funds solar for low-income homeowners in Colorado and New York, and has trained volunteers to install solar on 4,000 homes.

Some of the utility companies’ best customers could quit the grid ... Rates will then rise for the rest, prompting yet more customers to defect, and driving rates up more: The dreaded utility death spiral.

Noble as those efforts may be, those are not the kind of numbers that will transform the energy markets; the multifamily program has a waitlist so long it has closed to new applications. Meanwhile, there may exist another, less piecemeal solution that doesn’t require government funding so much as regulatory intervention – re-jiggering the utility business model so that rooftop solar becomes, instead of a drain on utilities’ revenue, a source of it. The way they’re currently formulated by most public utilities commissioners, for-profit utilities make money by leveraging investments in large, centralized power plants and the transmission lines that serve them. In some states, they also profit from how many kilowatt-hours they sell, but hardly any make money off rooftop solar.

Lena Hansen, an energy specialist with the nonprofit Rocky Mountain Institute, suggests that it might be possible to fix that problem at its root. Her organization has long advocated for distributed energy, and with it “a regulatory framework that rewards what we as a society want from our utilities: electricity that’s affordable, carbon-free and innovative.” Utilities could evolve rather than disintegrate, continuing to serve the “elderly and less fortunate” as ably as they manage supplies from rooftop solar owners. Everyone could stay integrated on the same “thriving, interconnected electricity grid,” Hansen says.

And the grid has its advantages. “It helps bring costs down; it creates a reliable system in general for all customers.” Rooftop solar has grid benefits, too – it’s clean, efficient and relatively predictable. “So the key question before us,” Hansen says, “is, ‘How do we revise the pricing structures to encourage more solar on the grid? How do we make sure that everyone is paying their fair share, but everyone is also being paid for what they’re providing?’ ” The goals is to keep incentives strong on both sides: For people like Flint and Jones to generate clean solar power for the utility; for the utility to survive, and maintain a robust system for the customers who depend on them.

Regulators with the Office of Gas and Electricity Markets in the United Kingdom have begun experimenting with price controls that value the carbon savings and resiliency of distributed energy, a system called RIIO (Revenue=Incentives+Innovation+Outputs). Minnesota recently developed a “Value of Solar Tariff” that allows utilities to perform a complex calculus to determine how much solar is worth to their system. Neither solution is airtight, but both, Hansen says, are good starts.

“There are a lot of people working on this problem,” she says. “These are tough questions.”

Carol Flint, for her part, appreciates that if too many people adopted her solution to the energy problem too quickly, trouble might ensue for all sorts of reasons. But taking the “long, long view,” she thinks what we’re doing now might be a preliminary exercise. “We’re getting our heads around the idea that we have alternatives,” she says. “The last 100 years have been about oil and coal. Now we’re asking, ‘Are there other ways?’ ”

It’s sort of like writing stories. “You run through a lot of ideas before you settle on one,” but you get nowhere if you don’t experiment. “Maybe we’re all in an experiment to change our minds about what gets produced in what way,” she says. “The process can sometimes lead you to a solution.”

Judith Lewis Mernit is a contributing editor to High Country News. She tweets @judlew.

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