Thread by @burgersb

🚨 Thread on rooftop solar & net metering! 🚨

This past week @mitenergy published a podcast in which we discuss the economics of rooftop solar, and, in particular, issues related to equity, net metering, & rooftop PV.

See the podcast below, & check out this thread for more!

https://twitter.com/mitenergy/status/1168870651005943809

Before I dive in, I want to note that many of the findings in this thread are early & stem from my PhD dissertation. I'm hoping that the #EnergyTwitter hivemind will provide feedback to improve the work. Please don't hesitate to *constructively* criticize. That's why I'm here!

As #Democratic presidential candidates lay out their climate plans, many have put clean power and justice at the core of their policies.

In my PhD dissertation, I dove into one energy justice issue: How does rooftop solar adoption and rate design impact vulnerable communities?

Rooftop solar adopters tend to be wealthy. Substantially wealthier than non-adopters.

There's other evidence that shows that adopters tend to be concentrated in white communities & that rooftop solar co's mrkting may be discriminatory, but that's a conversation for another time.

Rooftop PV under net metering can potentially increase expenditures substantially for non-adopters. Using data & simulations from Chicago, IL, this chart shows how expenditures for non-adopters rise as rooftop PV expands under net metering. Q1 is low income, and Q5 is high income

Why? Net metering allows rooftop PV adopters to pay for "residual" grid costs (think overbuilt networks) & the costs of policies like energy efficiency subsidies. But these costs don't go away. Everyone's rates go up to compensate for lost revenue. This impacts non-adopters most.

I like to think of this like property taxes for the public school system. Imagine I had 2 kids. I send them both to public school for years, but decide to send 1 to private high school. Do I stop paying 1/2 of my property taxes? No! The infrastructure exists & I have to pay!

This means that under net metering & ill-design residential electricity rates, expenditures for low income customers could rise substantially, while high income customers benefit predominately from rooftop solar. This isn't the equitable clean energy future many are striving for!

Are there solutions to this equity challenge that today's rooftop solar policies create?

Of course!

I'll dive in...

One approach being piloted (e.g. in CA) is to subsidize solar for low income communities. This is a good step, but its just a bandaid. The fundamental cost shift problem still exists, so unless these programs reach 100% of low income customers, some will still be left out to dry.

What we need is fundamental change to how we incentivize rooftop solar: rate design reform!

We need to price carbon. We also need to stop recovering the costs of infrastructure (wires) & policies (renewables & efficiency support) through variable ($/ unit of energy) charges.

But doesn't increasing fixed charges for the recovery of grid costs hurt low income customers?

Yes, sort of. If every customer gets the same $/ customer charge, then low income bills go up. That's what this chart shows (RTP-CCC is a tariff with a big, uniform fixed charge).

However, there is a cost to inaction! Low income customers might spend less on electricity with big fixed charges than they would if rooftop PV penetration increases under today's net metering & rate designs. See the point where the 2 lines cross in the top panel in graph below.

Further, if we make simple tweaks to fixed charge design (e.g. by basing them on a customer's historical electricity demand), we can make fixed charges progressive, rather than regressive. That's what this chart shows. CCC is a uniform charge, & APD charges w/ historical demand.

This story is not straight forward. Rooftop solar can provide value to the grid. The big Q is how much. There is ENORMOUS uncertainty over this. However, even if we make really aggressive assumptions about the value of PV, net metering is likely bad policy in many locations.

You can read all of the details, including methods, data, & more in Chapter 5 of my dissertation: bit.ly/burgerDisserta…

I'd love feedback on this, as I'm currently working on the journal version (the work on the impacts of rate designs has been accepted to The Energy Journal).

The energy transition is a marathon, not a sprint. We can't afford to leave large swaths of the public behind. That's what current net metering policies and rate designs threaten to do.

cc @JesseJenkins @mitenergy @drvox @cleantechchris @KnittelMIT @leahstokes @inesliaz @KevinSLeahy and any others who might find this interesting!