Trends in the Installation of Residential Solar Panelsin California

Candace E Ybarra,John B Broughton,Prashanth U Nyer

doi:10.4236/lce.2021.122004

Abstract

This paper examines some trends in residential solar panel installations in California. First, we look at the growth in residential solar panel installations in the state and changes in consumption per account. Next, we examine aspects of the proposed changes to the net metering program in the state. Politicians, the California Public Utilities Commission (CPUC), investor owned utility (IOU) companies and other public interest groups are currently involved in a contentious debate on the future of residential solar panel installations in the state of California. The major California IOUs, Pacific Gas and Electric (PG&E), Southern California Edison (SCE), San Diego Gas and Electric (SDGE), and others have argued that solar panel installations favor wealthier residential customers at the expense of less wealthy customers. The basis of the argument is that under the current rate structure those with the financial resources to install solar panels are able to avoid paying their share of the fixed costs incurred by utility companies which results in a disproportionate burden on less wealthy customers. IOUs have asked for permission to charge solar customers large additional monthly fees. Some have even called for all the grandfathering protections granted to early solar adopters under the previous and current net metering programs (NEM 1.0 and NEM 2.0) to be withdrawn. Solar companies and residential solar customers have maintained that such moves would destroy the solar industry in the state, cause thousands of job losses, and most importantly, prevent the state from making progress towards its stated carbon neutrality goals. Given this ongoing debate, it is important to examine whether there exists a wealth difference between residential customers in California who have and have not installed solar panels. As an extension of this research, we also went about determining whether climatic conditions impact the solar panel adoption rates. While California is a huge state with varied climatic zones and several utility companies, we focus our analysis on residential customers of SCE who reside in Orange County. The findings and conclusions are generalizable to residential customers throughout the state.

Highlights

California continues to be at the forefront of the nation in proposing and enacting mandates that are designed to reduce carbon emissions in the future
To better understand the impact of the climate on solar adoption we could look at the solar panel adoption data for the three climate zones for neighborhoods that fall within the wealthiest ZIP codes
By doing this we can look at the impact of climate zone on solar panel adoption after controlling for housing value For housing value pentile 5, the solar adoption rate is strongly associated with the climate zone with the coolest zone showing an adoption rate of 2.85%, increasing to 6.19% for zone 2 and 9.07% for the warmest areas of the county

Summary

Introduction

California continues to be at the forefront of the nation in proposing and enacting mandates that are designed to reduce carbon emissions in the future. The California Solar Mandate (California Legislative Information, 2019), which went into effect on January 1, 2020, requires new single-family and multi-family residential units up to three stories high to have solar panels that will generate the annual electrical energy needs of those buildings. At the time of this writing, the California Energy Commission is weighing the possibility of crafting new regulations, that could go into effect as early as 2023, which would severely restrict natural gas connections for new residential constructions or at least incentivize builders to move away from natural gas and instead to rely more heavily on electric options for heating (Roth, 2020). While utility-owned solar installations make up most of the solar capacity in the state (approximately 10,000 MW in 2016-2020 according to SEIA), residential solar installations were not far behind (approximately 5000 MW in 2016-2020)

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