California OKs controversial SMUD solar plan. What it means for Sacramento home buyers

In a precedent-setting decision, state energy officials Thursday approved a controversial request by Sacramento’s electricity company to allow home builders and buyers an alternative to the state’s 7-week-old rooftop solar panel mandate.

California Energy Commissioners gave the Sacramento Municipal Utility District unanimous clearance to offer builders the option of buying solar energy from SMUD, via local solar farms SMUD would build, rather than install solar panels on new-home roofs.

SMUD, which provides electricity for Sacramento County, argues its proposed Neighborhood SolarShares Program will aide builders of homes or low-rise apartments who find it too expensive or unworkable to mount solar panels on roofs.

Their program, they say, is in line with California’s ambitious goal of eliminating greenhouse gas emissions in the next two decades. “SMUD is committed to a clean energy future,” SMUD attorney Steve Lins said. “We are offering (home buyers) a choice.”

The SMUD SolarShares program has been hotly contested, however, by many in the solar industry and some environmental groups. They contend approval of SMUD’s program opens the gates for other utility companies around the state to follow suit. That, in turn, will block many state residents from starting on the path to energy independence from utility companies, some solar advocates contend.

“Mark my words,” said state Sen. Scott Wiener of San Francisco to the energy commission during a three-hour Thursday hearing, “it will undermine rooftop solar and storage ... and will set a precedent for other utilities to do the same.”

“They want (rooftop solar) to go away and they view it as competition.”

SMUD, though, has won support in a letter from 30 other legislators, including Sacramento Sen. Richard Pan.

“We applaud the commission’s leadership in helping shepherd California towards a clean energy future,” Pan’s group wrote to the CEC. “We appreciate, though, that the additional cost of rooftop solar systems may not be appealing to all prospective home buyers.”

The solar rooftop fight stems from new state energy commission regulations that went into effect Jan. 1, requiring most new housing to come equipped with solar panels on the roof. The mandate applies to housing that is less than four stories tall and whose roofs are not in the shadows of taller buildings or trees.

The regulation’s solar mandate does not apply to existing homes in California, only to new housing going forward.

That regulation, seen as groundbreaking nationally, is aimed at helping the state transition to 100 percent carbon-free energy in the next two decades.

SMUD says its plan provides options

SMUD officials argue their plan simply provides needed options, and that many builders and home buyers will opt for rooftop solar. “Climate change is an all-hands-on-deck situation,” SMUD board member Brandon Rose said. “We recognize all options need to be on the table.”

SMUD officials say they have written their SolarShares program in a way that allows an individual home buyer in a new subdivision to require the builder to put solar panels on the roof even if the builder has signed a deal to be part of the SMUD program. Other home buyers can agree to forego rooftop solar and instead get their energy from solar farms, essentially arrays of solar panels linked to the electric grid.

Pacific Gas & Electric, Northern California’s other main electricity supplier, has publicly supported the SMUD program, but has not said whether it intends to follow suit with a similar program of its own.

Both methods are expected to save homeowners and renters on energy bills. The rooftop solar typically has higher up-front costs. A system may range from $10,000 to $15,000. But those homeowners will see more savings on their monthly energy bills than people who opt for the SMUD solar program.

Solar advocates criticize decision

Advocates for rooftop solar said the commission’s decision amounts to backtracking.

“This is a blow to consumers,” Solar Rights Alliance Executive Director Dave Rosenfeld said of the energy commission decision. “That the CEC would back down from their solar homes policy just weeks after it started shows everyone the immense power that utility monopolies have over our state government.”

He and other rooftop solar advocates contend the SMUD program shouldn’t be allowed because the solar farm SMUD is building is in Rio Linda, far from many of the subdivisions it will be serving, thus not a true “community-based” service.

Commissioners said, however, they purposely left that portion of the regulations vague to let the market sort it out. But several said they would be willing to rethink and possibly redefine what they mean by a community solar option when they write a planned new set of home energy rules in 2022.

Commissioners pointed out California will need both more solar farms and lots more rooftop solar arrays if it is going to meet its goal of eliminating fossil fuel usage. Commissioner Andrew McAlister warned the solar industry and environmental representatives not to judge the SMUD plan too harshly. He said California solar advocates should stick together, notably given the Trump administration has pushed back in support of more use of coal.

“It’s not a black-and-white, either/or thing,” he said. “We miss the point if we take sides too sternly. We are in this together. We make the most progress when we try to row in the same direction.”

Nevertheless, numerous rooftop solar advocates said approval of the SMUD program could block many consumers from taking steps to become energy independent. They point out that rooftop solar combined with a storage battery in the garage can allow a homeowner to make and store energy at a time when utilities are forced to shut down power due to worries about grid reliability.

This story was originally published February 20, 2020 at 5:35 PM.