Opinionated: What Happened to SMUD?

2 Mar 2020

Editor’s note: The California Energy Commission agreed to allow the Sacramento Municipal Utility District to use a controversial alternative method for complying with the 2019 building energy efficiency codes. The CEC standards require all new single homes to have solar rooftops. SMUD got permission to allow builders to invest in community solar in place of building homes with solar rooftops.

by Dave Rosenfeld

The California Energy Commission approved SMUD’s SolarShares proposal on Feb. 20, which we predict will effectively block solar on most new homes in the Sacramento area for twenty years.

The Commission vote was a setback, but the larger fight is bigger than SolarShares. Many other utilities around the state supported SMUD’s proposal and we suspect they will seek the same deal. 

In addition to the hundreds of written comments sent by people across the state, over fifty Sacramento residents packed the Energy Commission and SMUD Board meetings.

Many of them argued that SMUD should be figuring out how to close down its five fossil fuel power plants rather than scheming to discourage people from making their own clean energy at home.

SMUD’s SolarShares plan will effectively block solar and solar-plus-storage on new homes for two decades. The plan disincentivizes solar from being installed during construction. Most home builders, like many of us, take the path of least resistance. It is easier for a home builder to enroll a new home in SolarShares for twenty years than install solar, even if the consumer loses out.

This matters for a few reasons, including that owners of those homes will pay higher energy bills. SolarShares offers an average $28/year credit, a fraction of the savings of rooftop solar. These homeowners will have no way to avoid power outages through a solar-powered battery. And, our community will make less local clean energy than it should, making it harder to meet the state’s ambitious clean energy goals.

Below are some of SMUD’s claims and our response.

SMUD Claim #1: SolarShares homeowners may add solar.

Fact: SMUD’s terms and conditions make it near impossible for most SolarShares homeowners to add solar in practice. That’s because homeowners locked into SolarShares won’t receive “net metering” if they install their own solar. That net metering is how solar pencils out for most solar users. Solar without net metering is effectively a prohibition on solar.

SMUD Claim #2: If a SolarShares homeowner increases their electricity use by purchasing an electric vehicle, for example, they could add solar, with net metering, to cover that additional load with a small solar system.

Fact: Rather than loading homeowners down with confusing terms and conditions, SMUD should just get out of the way and let people install as much solar and storage as they’d like, with net metering.

SMUD Claim #3: It’s more efficient to deliver clean energy through large-scale solar farms than rooftop solar.

Fact: It’s easy to slap down hundreds of panels in an open field, but ratepayers have to foot the entire bill, plus it’s expensive to site and buy the land and ship the energy over long-distance transmission lines. It’s actually cheaper to ship energy that’s already made locally, on rooftops that are already built, paid for by private individuals rather than ratepayers. In reality, we need both, and SMUD should stop trashing rooftop solar.

SMUD Claim #4: SolarShares is a “community solar” program that brings solar to people who can’t otherwise afford or access it.

Fact: SolarShares is not community solar, according to the country’s leading community solar expert, The Alliance for Local Self-Reliance. True community solar has two key features omitted from SMUD’s plan. First, the economic benefits should be similar to rooftop solar. Solar Shares’ $28/year credit doesn’t come close to the savings from true rooftop or community solar. Second, community solar should not displace solar for homes suited for rooftop solar.

SMUD Claim #5:  SolarShares lowers the price of new homes while still providing clean energy.

Fact: Putting solar on new homes saves the homeowner money by cutting their energy bill by thousands of dollars over twenty years. Those energy savings more than making up for the small increase in the mortgage payment (less than $50/month).

We small solar advocates urge the SMUD board to fix their staff’s SolarShares program, something the board has yet to vote on. We will work to keep other public power agencies from adopting like programs. Lastly, we will work to educate legislators about the impact of the Energy Commission’s approval of SMUD’s SolarShares program.

The bottom line is that SMUD and other utilities will have to answer for the fact that California plans to get 100% of its electricity from clean sources by 2045. That means the amount of clean energy will have to increase many times over what we have now.

California can’t meet its clean energy goals simply from large-scale sources. There isn’t enough open space, and the cost and risk of doubling down on long-distance transmission lines is too great.

The state needs its residents to choose solar and battery storage. People want solar, whether because of the energy savings or because they want to do their part to reduce their burden on society.

Dave Rosenfeld, Solar Rights Alliance executive director

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