Rooftop solar battle brewing in Sacramento

State lawmakers are all but certain to raise California's clean energy mandate to 50 percent later this year. That will mean more big solar farms, more wind turbines and possibly more geothermal by the Salton Sea.

But there's a big question lawmakers haven't yet addressed: Should rooftop solar count?

The answer is either simple or surprisingly complicated, depending on who you ask. It's the subject of a growing battle in Sacramento, with the rooftop solar industry, organized labor, utility companies and large-scale solar advocates engaged in a critical debate over the state's energy future. The resolution could have major implications for the affordability of rooftop solar in California.

California already has one of the country's most ambitious renewable energy mandates: 33 percent by 2020. But with Southern California Edison and other utility companies on track to meet that goal without breaking a sweat, Gov. Jerry Brown called for a new target — 50 percent by 2030 — in his inaugural address in January.

A 50 percent clean energy mandate cleared the Senate last month, and it's now moving through the Assembly. It's modeled after the state's current mandate, which includes large solar farms but mostly excludes rooftop solar.

Some advocates are trying to convince lawmakers that rooftop solar should count this time.

"A green electron is a green electron. There really should be no discrimination by state policy of what counts toward the state's renewable energy goals," said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association, a trade group whose members include rooftop solar companies. "A solar system on a roof is just as clean as a solar system out in the desert, and the state shouldn't pick winners and losers."

That's all well and good — until you start talking to large-scale solar advocates, who generally oppose rooftop solar's inclusion. There's no question they have a financial stake in the outcome, but they also believe California should promote rooftop solar through some other mechanism.

Then there are the unions.

Organized labor has traditionally supported big solar over rooftop solar, because most large-scale solar jobs are union jobs and most rooftop solar jobs are not. Labor could play a big role in determining whether rooftop solar's inclusion in the clean energy mandate is politically palatable for many Democratic legislators.

Betony Jones, a climate policy researcher at UC Berkeley's Center for Labor Research and Education, sees big advantages in large-scale solar, especially because it creates union jobs.

"Larger-scale solar is producing cheaper green energy and better jobs than rooftop, and it might not be like that forever. But that seems to be what it is now," Jones said. "If we're really serious about reducing emissions, we should also be serious about accurately accounting for the different costs and benefits of doing that."

Fair is fair

Rooftop solar is booming, here in the Coachella Valley and across the state.

Through the end of 2014, more than 2,500 megawatts of solar power had been installed at 300,000 homes and businesses, according to state officials — enough to power well over half a million average California homes for a year. More than a quarter of that capacity was installed in 2014. Six cities in the Coachella Valley alone installed at least one megawatt of solar last year, according to GTM Research, a clean-tech consulting firm.

With costs continuing to drop, rooftop solar will keep spreading, regardless of whether it's included in the clean energy mandate. But policymakers should still do everything they can to promote rooftop solar, advocates say.

"You have a lot of private capital invested in rooftop solar. If you're not counting rooftop solar, you're leaving that part of the investment on the table," said Susan Wise Glick, a senior manager for public policy at Sunrun Inc., one of the nation's largest rooftop solar companies.

Some conservation groups and local activists agree. Across the desert, large solar farms have come under fire for their potential impacts on delicate ecosystems and pristine landscapes, with critics saying policymakers should focus exclusively on rooftop generation, far from the open desert.

While the clean energy mandate isn't the be-all and end-all for rooftop solar, the outcome of that battle could impact an even more important equation: how much money rooftop solar customers get paid for the electricity they generate.

Under California's current "net energy metering" program, rooftop solar customers can sell excess energy to their utility at full retail value. That incentive will end sometime next year, and state officials are working to develop a replacement program by the end of 2015, as mandated by the legislature.

Rooftop solar advocates are largely resigned to the fact that "net energy metering 2.0" will be less generous than the current incentives. They're lobbying to keep payment levels as high as possible.

"Demonstrating the value of rooftop solar from counting toward the (clean energy mandate) will influence the discussions around the future of net metering," Glick said. "No one thing is completely distinct from the other."

Strange bedfellows

Southern California Edison and other utility companies have generally preferred large-scale solar farms to rooftop solar. Across the country, utilities have come under fire for their reluctance to support — or outright opposition to — rooftop solar, which experts say threatens their traditional business models.

California utilities have sided with rooftop solar advocates on the 50 percent clean energy mandate, arguing that rooftop solar should count.

"It's a rare moment," said Del Chiaro, from the California rooftop solar trade group. "We're not yet walking down the hallways arm in arm with the utilities, but we're hoping to get there."

The utility industry's support for rooftop solar is more practical than anything.

If electricity providers are going to be required to buy 50 percent of their energy from renewable sources, they'd like to have as many options as possible, to help keep costs low. Rooftop solar is particularly attractive because there's already so much of it, and because there's going to be a lot more regardless of what utilities do next.

"State policy should not pick technology winners and losers, favoring only utility-scale renewables, and instead must recognize all (greenhouse gas)-reducing strategies toward the state's ambitious goals," Darren Bouton, Edison's director of state public affairs, wrote in a letter to the Assembly Committee on Natural Resources on Wednesday.

Utilities won't become rooftop solar's biggest fans if it's included in the clean energy mandate, Del Chiaro said. But they might get friendlier.

"I don't know that they'll get religion just for this," she said. "It certainly helps give them some skin in the game."

Two kinds of solar

Large-scale solar advocates say their opposition to rooftop solar's inclusion is about more than protecting their industry's financial interests.

One of the problems, they say, is that rooftop solar already has its own dedicated incentive program, net energy metering. They also argue that California's renewable energy mandate is designed around traditional power-purchase contracts between utilities and energy companies.

The mandate "was directed at a completely different market, and rooftop solar has its own complex market drivers," said Shannon Eddy, executive director of the Large-scale Solar Association, a Sacramento-based trade group. "Conflating the two could cause all kinds of disruptions in the market."

Large-scale solar advocates also make a broader argument against rooftop solar's inclusion.

By excluding rooftop solar, they say, California can end up with even more than 50 percent renewable energy. That's because rooftop solar would count on top of whatever other renewables the state uses to meet the clean energy mandate.

And large-scale solar advocates say we need as much renewable energy as we can get. Climate change, they note, is already causing higher temperatures, rising seas and more intense wildfires.

"We're on fire. Alaska is on fire. British Columbia is on fire. California is in the midst of drought the likes of which we don't have any records for," Eddy said. "Climate change is not going to respond to half measures. This should not be an either/or conversation."

Glick called that argument a "red herring." Of the 30 states that have renewable energy mandates, Del Chiaro said, 19 either allow or require some rooftop solar.

"This fear that somehow we're going to get fewer renewables because we're actually giving rooftop solar some certainty, and some strong policy support going forward, is sort of like shooting yourself in the foot," she said.

Union politics

Organized labor could also be an obstacle to rooftop solar's inclusion in the 50 percent clean energy mandate.

Representatives from the International Brotherhood of Electrical Workers' Ninth District, which encompasses California and other Western states, didn't respond to requests for comment. But unions have traditionally advocated for large-scale solar over rooftop solar.

Vincent Battaglia — CEO of Renova Solar, the Coachella Valley's largest locally based solar company — said union representatives have made a renewed effort to poach his workers in recent weeks.

"They've got the balls to call our guys and say, 'The future of solar is large-scale,'" Battaglia said.

Chuck McDaniel, political director of IBEW Local 440 in Riverside County, said his union is "always trying to hire new people."

"I know Vincent. He's a good guy, I like him," McDaniel said. "We just see things a little bit differently, as far as how much workers should get paid."

Some experts say unionized, large-scale solar jobs are better for workers than non-unionized, rooftop solar jobs.

Jones, the UC Berkeley researcher, recently wrote a blog post with her colleague Carol Zabin comparing the quality of large-scale and rooftop solar jobs. While wage data isn't perfect, they generally found that large-scale solar jobs pay more, have better benefits and offer more opportunities for career advancement.

Jones also noted that rooftop solar is more expensive, per unit of energy, than large-scale solar. That's mostly due to large-scale solar's huge economies of scale.

"It's not that we advocate for removing all incentives for rooftop solar. There might be really important societal reasons for continuing to develop rooftop solar up to a certain level, especially in low-income communities," Jones said. But "the cost-benefit ratio is preferable for the utility-scale projects," she added.

What happens next?

The Assembly Committee on Utilities and Commerce added language to the clean-energy bill last week that could ultimately lead to rooftop solar's inclusion. The changes would allow state officials to require utilities to buy some of their renewable energy from on-site generation, including rooftop solar.

It's still far from clear if that language will make it into the final bill, the amended version of which will still need to go back to the Senate once it clears the Assembly. And rooftop solar advocates might end up opposing that language, because it could be seen as capping rooftop solar generation under the clean energy mandate.

Assemblymember Eduardo Garcia, a Coachella Democrat whose district covers the Imperial Valley and parts of the Coachella Valley, said he supports rooftop solar's inclusion — with some kind of cap.

Garcia has advocated for more clean energy from geothermal and other sources that generate electricity around the clock. Experts say the state can only handle so much more intermittent solar and wind — which only produce energy when the sun shines or when the wind blows — without adding more "baseload" sources to complement them.

"That's really what's at the core of our discussions and push here at the Capitol," Garcia said. "It's to diversify the portfolio so we don't end up with too much of one and not enough of others."

Sammy Roth writes about energy and water for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.