Kind of. More expensive, less timed and grid intensive energy efficiency.

Here in California, rooftop solar power has been in the news lately, as net energy measurement and other distributed generation policies are under review at the Utilities Commission. and the legislature.

The Energy Institute blog has spilled a lot of ink on saving rooftop solar versus grid-scale renewables, the cost shift created by energy meters net, equity issues regarding who installs solar power, where they install it, why they install it, and other related topics.


A common defense of solar power on rooftops is: “Rooftop panels are just one of many ways to reduce your grid consumption, just like more efficient devices, or just to conserve energy. electricity by living in a smaller house, drying clothes on a line, or using fans instead of air conditioning. In response to policy proposals that would make rooftop solar power less financially attractive, the rhetorical response is, “Are you then going to penalize customers who live in small homes or who don’t install air conditioning?” “

At first glance, it’s a compelling analogy. The change in cost associated with rooftop solar occurs because the electricity prices consumers pay are much higher that the cost of the network to supply the electricity it replaces. The difference covers many fixed costs, including grid infrastructure, utility programs (including energy efficiency subsidies), tariff subsidies for low-income households, and forest fire mitigation , among others.



If you don’t buy an air conditioner and use less electricity, you also pay less for these fixed costs, as happens when you install solar panels on the roof. Any reduction in the kWh you buy from the grid, whether due to efficiency, a more modest lifestyle, or solar power, has that impact.



Nonetheless, this rooftop solar energy defense starts to crumble when you look at it closer or closer. More broadly, why do we recover these fixed costs via volumetric electricity prices? These costs are really unrelated to a household’s level of consumption, so we skew choices when taxing electricity to pay for them, as we discussed in previous blogs.

No, it’s not about penalizing customers who consume too little electricity. It’s about sharing the burden of a public resource in an equitable way – whether it’s network infrastructure or forest fire preparedness or subsidies for low-income households. We don’t rely on user fees to cover most of the costs for street lights, parks, police, government internet data, or other utilities which are mostly fixed costs. Why should we finance the fixed costs that are somewhat related to electricity – in some cases very loosely related – by increasing the price of electricity?

Additionally, a closer look at the argument that rooftop solar power is just another effective way to reduce grid demand reveals significant flaws in the analogy.

First, while rooftop solar power is one form of energy efficiency, it is a very expensive form. It does not have the perks of some efficiency improvements, like insulation, that make a home more comfortable. For most adopters, it’s a financial decision based on the price of solar and the price of electricity. It’s attractive in California not because the cost of rooftop solar power is so low – it is much more expensive than grid-scale renewables – but because retail electricity prices are so high. It is very expensive “energy efficiency” compared to LED bulbs or the purchase of efficient household appliances, for example. If a technology allows consumers to save 20 to 30 cents per kWh (retail price) by making an investment that costs 13 cents at 22 cents per kWh, but only saves around 8 cents (including pollution costs) in the costs of electricity supply – as is the case for solar in California – good public policy should not favor this type of investment.


Second, rooftop solar power in California (and many other places) now helps reduce grid demand at the best time, just when supply is plentiful. In 2008, I made a Analysis showing that solar energy was more valuable than the average supply, due to its favorable timing at the time, but this conclusion is therefore that of the 2000s. As more and more solar energy blanketed the grid, many recent studies, including detailed work by Jim Bushnell and Kevin Novan, have shown that solar is now less valuable than average. Improving air conditioning efficiency is effective at particularly interesting times, as Judd Boomhower and Lucas have shown. Rooftop solar power in California is now doing the opposite.

Third, for the power grid, rooftop solar power would look like energy efficiency if it was just a demand reduction, but that’s not what solar power does on the roofs. rooftops. Half of the typical output of a roofing system goes into local distribution cables, making it a very different product. Traditional energy efficiency does not require meters or special tariffs to assess these energy injections. Generating rooftop electricity for distribution over the grid can be valuable or expensive depending on the exact location and time, but it is certainly not the same as reducing consumption.

Very few energy efficiency advocates argue that a household can reduce its carbon emissions to zero, or that it should try. Energy efficiency can be a cost effective way to eliminate some of a customer’s demand, not a way to virtually eliminate their utility bills. In contrast, the typical new residential solar system in California is now around 6 kW capacity, which generates more than 10,000 kWh per year (at a capacity factor of 20%), approximately 50% more that the average The Californian household consumes. Solar adopters are much larger than average users and – under the rules for measuring net energy – they make up the vast majority of their use.

Like energy efficiency technologies, rooftop solar energy policy should be based on the specific benefits and costs (monetary, environmental and other) that it brings to society, not on the dollars she saves for the adopter. Analogies can be helpful, but they can also be misleading. It’s time to debate rooftop solar power based on what it is, not what it sort of looks like.

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Suggested citation: Borenstein, Severin. “Can rooftop solar power compare to energy efficiency? “ Institute of Energy Blog, UC Berkeley, July 12, 2021,