Trends in the Installation of Residential Solar Panelsin California

Abstract

This paper examines some trends in residential solar panel installations in California. First, we look at the growth in residential solar panel installations in the state and changes in consumption per account. Next, we examine aspects of the proposed changes to the net metering program in the state. Politicians, the California Public Utilities Commission (CPUC), investor owned utility (IOU) companies and other public interest groups are currently involved in a contentious debate on the future of residential solar panel installations in the state of California. The major California IOUs, Pacific Gas and Electric (PG&E), Southern California Edison (SCE), San Diego Gas and Electric (SDGE), and others have argued that solar panel installations favor wealthier residential customers at the expense of less wealthy customers. The basis of the argument is that under the current rate structure those with the financial resources to install solar panels are able to avoid paying their share of the fixed costs incurred by utility companies which results in a disproportionate burden on less wealthy customers. IOUs have asked for permission to charge solar customers large additional monthly fees. Some have even called for all the grandfathering protections granted to early solar adopters under the previous and current net metering programs (NEM 1.0 and NEM 2.0) to be withdrawn. Solar companies and residential solar customers have maintained that such moves would destroy the solar industry in the state, cause thousands of job losses, and most importantly, prevent the state from making progress towards its stated carbon neutrality goals. Given this ongoing debate, it is important to examine whether there exists a wealth difference between residential customers in California who have and have not installed solar panels. As an extension of this research, we also went about determining whether climatic conditions impact the solar panel adoption rates. While California is a huge state with varied climatic zones and several utility companies, we focus our analysis on residential customers of SCE who reside in Orange County. The findings and conclusions are generalizable to residential customers throughout the state.