The Weekly Sun: California Makes Going Solar Harder

Can solar survive California’s new net metering replacement? Also, are you ready for a minicar?

California’s utility commission voted to cut the rate it will pay solar customers by 75%, with a goal of making home batteries more attractive. Also, minicars are all the rage in Asia, but can the U.S. adapt to the eco-friendly vehicles?

Amidst an energy crisis, California goes all in on batteries

California has been the great solar pioneer for decades, even building a solar facility in the Mojave Desert as early as the Carter administration.

More recently, California’s energy crisis has spurred it to embrace rooftop solar much more quickly than the rest of the U.S. Without even considering the federal IRA tax credits, state and local governments have rewarded solar installations with property tax breaks, state tax credits and robust net metering program. As a result, the state generates a whopping 27% of its energy from solar.(1)

But advocates are wondering if solar’s heyday in California is over.

The California Public Utilities Commission (CPUC) voted on December 15th to end the state’s net metering program. In its place, California’s utilities will implement an “avoided-cost” payment system for energy fed into the grid by solar homes. The existing net metering paid solar customers a retail rate, roughly the same price per kWh as the same customer would pay for electricity if they were drawing from the grid. “Avoided-cost” is based on the price the utility would pay on the energy market from providers like coal plants, commercial solar farms and nuclear facilities. It is often 75% less than the retail rate.(2)

Consumers with solar energy systems have two ways to recoup their solar energy system investment—through the savings for the electricity they don’t have to pay for and through the credits they get for sending electricity into the grid. This new regulation would cut into that second stream in a big way.

CPUC’s stance is that decreased rates reflect solar consumers share of grid maintenance and investment.

The rate change is also designed to encourage more battery installation, a key tool in leveling out the high demand peaks at certain hours of the day. Much of a utility’s generating capacity is used during brief stretches of the day, but the expensive generators must be maintained and run throughout the entire day. With more batteries distributed through the grid, peak demand goes down, lowering overall cost.

Whole home batteries can be costly, but CPUC’s strategy also involves bidirectional charging. Pacific Gas and Electric is piloting a program that allows users to power their homes from their EVs’ batteries. That power could also be sent back into the grid right when the avoided cost would be very high, allowing customers to get a high return for their stored energy.

The new rate will apply to systems brought onto the grid after April, so California solar installers are expecting a busy couple of months leading over to the cutoff.

Are minicars the next big small thing?

For many people who care about climate change, seeing an electric vehicle (EV) on the road still brings a little thrill. Even as they become more and more common, they continue to feel like a miracle of twenty-first century engineering.

But like the rest of the cars on the American market, EVs keep getting bigger. There’s the Hummer EV, the Ford F-150 Lightning and soon the Chevy Silverado EV. Compared to the once popular Nissan Leaf EV, these trucks are gargantuan.

Large vehicles are often sold under the illusion (3) that they are safer for the driver, but they are unquestionably more dangerous for pedestrians, cyclists or other drivers they hit. The more mass a vehicle has, the greater force it brings to an impact.

And a Hummer EV isn’t necessarily the boon to the environment some might think. Certainly, making them emission-free makes them better for the environment than their gas-guzzling counterparts, but larger vehicles require bigger batteries and take up more energy. They certainly leave room for improvement.

One way to make an EV even more environmentally friendly is to make it smaller. And outside the U.S., there’s a growing trend to build tiny, leaner vehicles, especially for the urban environment. Very small vehicles have been a favorite in Asia for years, but as EVs are allowing Americans to rethink what they want from their cars, tiny car manufacturers are hoping they can gain a foothold in the U.S. And there’s reason to believe they’ll start showing up on American roads soon. (4)

There’s a lot to love in the new electric minicars. They take much less energy to get from point A to B, they can charge using conventional outlets and they are much easier to park. Most are designed to go nose-in in a space that would require parallel parking for a typical American car. And they are mostly built with an emphasis on sightlines, making the drivers more aware of traffic, pedestrians and other road hazards. That makes the driver a safety feature. Of course, the small size also brings limited range, but for urban drivers, range is much less of an issue.

Small EVs also allow a flexibility of design that other internal combustion vehicles simply can’t offer. For example, the Kenguru is a minicar designed specifically for those that use wheelchairs. (5) With a rear access hatch, ramp and remote control, it allows the driver to roll in and out of the vehicle without getting out of their wheelchair.

And minicars are cheap. The average price for a new car in the U.S. hit $48,000 in September (6), while minicars often come in between $5,000 and $20,000. (4)

The biggest roadblock to adoption in the U.S. is the U.S. itself. Both on the federal and the local level, governments are unsure how to regulate minicars. Vehicles that can go faster than 25 mph are subject to federal crash test regulations, which would require a much heavier, reengineered design. EVs that stay below that speed thresh hold are limited to local surface roads in limited places.

Advocates are pushing for the National Highway Traffic Safety Administration to create a new category more friendly to minicars, but for now, the sub-25 mph category is showing growth as new makers enter the market and buyers rethink what a car is supposed to be.

The Weekly Sunsong

For the last Sunsong of the 2022, we’re going with one of the most optimistic songs of the last 60 years. There are still many challenges ahead in the transition to clean energy, but for the first time in years, renewable energy has a tailwind. It’s gonna be a bright, bright, sunshiny day.