Should California Utilities Stay Away from Solar?

Like most states, California requires utilities to generate a certain percentage of their electricity from green power sources. In fact, we have some of the most ambitious renewable energy mandates in the country – and they could become even stricter.

As a result of these green targets, utilities are encouraged to invest in clean power technologies like solar. And this is a great thing for everyone.

Each new utility-scale solar installation adds more clean power to the electricity grid. Consequently, there is less pollution throughout California.

Utilities also have the financial resources and technical savvy to design, build, and maintain mega solar farms.

But is utility-scale solar the best solution?

Not necessarily.

Distributed solar (on residential and commercial rooftops) is often cheaper, better, and faster than larger PV projects. This is why New York has decided to take a very different approach. The Empire State still wants to encourage widespread solar investment, but it hopes to do this without becoming too reliant on local utilities.

The End of Utility-Scale Solar in New York?

The New York Public Service Commission has established new regulations to prevent utilities from becoming too involved with green power generation. Utility providers are usually the driving force behind most new solar capacity. But New York wants to promote more decentralized and distributed investments in renewable energy.

In other words, the state wants to encourage homeowners, businesses, and independent power producers to go solar on their own.

But why put these rules in place?

In the absence of these new regulations, utilities throughout New York could potentially corner the solar market and make it difficult for independent project developers to install PV panels. Utilities are, after all, monopolies who wield a tremendous amount of power (no pun intended). They own the infrastructure, hire lobbyists, and enjoy uncontested profits.

In some rare instances, local utilities have actively campaigned against renewable energy technology (a trend we’ve witnessed right here in California as well).

With these rules in place, however, the playing field is more level. Smaller solar installers don’t have to compete with the deep pockets and lobbyists that utility companies bring to the table.

According to Audrey Zibelman, chairwoman of the Public Service Commission,

The landmark steps New York State is taking today will reorient both the electric industry and the ratemaking process toward a consumer-centered approach that harnesses new technologies and markets.

Should California Utilities Take Note?

The solar industry in California is more mature and established than

New York’s. In fact, ours is one of the most competitive solar PV markets in the world – so there is little danger that utilities pose a serious threat.

But there is at least one compelling reason why California utilities should stay out of the solar energy game.

Large PV projects are often bad for the environment because they require clearing away local habitats to make room for mega installations. By contrast, residential and commercial solar installations make use of pre-existing rooftops on already developed land. Distributed solar power doesn’t require disrupting delicate habitats.

In fact, California has so much “developed” land that we could cover the entire state’s electricity needs 5 times over if we exclusively invested in distributed solar power on rooftops and parking lots.

If California utilities begin installing solar panels on these areas, there is no reason why they should leave the renewable energy game.