Letter to California's Governor Brown

           It looks to me like a crisis is coming upon the State with regard to the continued expansion of small scale PV energy industry.  The problem is that the major utilities (particularly PG&E) have made it abundantly clear that they intend to stop accepting new electricity produced under the net metering agreements as soon as the total production in their service areas hits the mandated 5% of their peak demand.  The installed base is now more than 3% and rising rapidly as the economics of distributed small scale power has improved in the past few years.   I predict that if the current trends continue, the 5% limit will be reached within two years – stopping further installation of renewable energy systems that are designed to offset the power on a meter-by-meter basis (residential, small commercial, agricultural, etc.). Therefore, just about the time when raising power costs and lowering PV system costs will make distributed power generating systems affordable without government subsidies, the ability to install the systems will be curtailed by the utility companies.

            The small scale renewable industry is just starting to bloom, creating new jobs, creating new investments and finally moving toward reducing our dependence upon non-renewable energy sources.  In two or three years, the economics for renewable energy systems will change to make them not only affordable, but will produce a net positive rate of return - without subsidies, incentives or pollution.

            It appears that the goal of the utility companies is to own and control the sources of electricity on the grid rather than allow its small users to be producers.  The plethora of proposals for very large scale solar power plants in California makes it clear that they intend to purchase most of their solar produced energy from huge installations covering large tracts of desert land, causing extreme and largely unknown environmental impacts to these important ecological systems and the local communities.

            There are many down sides to the very large installations.  They will be heavily subsidized by taxes and by being given the use of “free” public land (mostly BLM land).  The installations will create short term bursts of employment during the installation process (seriously straining the community resources in the proposed remote areas), but will require a very small staff for maintenance and operations.  The result is likely to be the creation of what amount to desert ghost towns following a building boom.  In addition, several of the proposed systems are owned by foreign investors; Americans don’t even get the benefit of our tax subsidies or land donations. 

            On the other hand, distributed small scale systems are largely environmentally benign because they are placed on land that has already been taken out of service (roof tops, parking lots, alongside roadways, etc.).  The investment money largely comes from individuals and small businesses rather than large, often foreign, investors.  In addition, there is becoming a new, large, labor base to provide sales, installation and maintenance of these distributed systems.  

            Without government intervention, the current trend toward the installation of residential and small commercial renewable energy systems will come to a quick halt.  I strongly recommend and request that the State mandate the acceptance of small scale renewable electric production onto the grid without having to meet the stringent regulatory requirements applicable to large scale power plants.  The power doesn’t necessarily need to be purchased using the “net metering” model, but it needs to be purchased at a fair price (as a minimum, it should equal the wholesale cost for identical power when the power is produced).  

            The current state of uncertainty with regards to what will happen once the 5% limit has been reached is stifling grown and continued investment in renewable energy at the “grass roots” level.