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[whitespace] Ken Adelman
Photograph by Steven Laufer

Solar, So Long: Engineer Ken Adelman says his solar photovoltaics are safe and ready to power up--if PG$&E agrees.

Bad Energy

How PG&E and the state's other private utilities have quietly succeeded in derailing solar energy in California--again

By Peter Asmus

KEN ADELMAN, the self-proclaimed "solar warrior," has been trying for more than a year to connect his 30 kilowatt (kW) solar photovoltaic (pronounced photo-vol-tay-ick) system, located in the foothills near Watsonville, to Pacific Gas & Electric's grid. As someone deeply concerned about environmental issues such as global climate change, Adelman's intent was to install enough solar photovoltaics --small silicon semiconductors that transform sunlight into electricity--to charge up four electric vehicles and his home.

"My solar system was ready to be inspected by PG&E in May of last year," Adelman complains. He still hasn't been able to generate more than two-thirds of his solar photovoltaic panel's potential due to a series of delays on PG&E's end.

Rumored to be the largest residential solar photovoltaic system in California, Adelman's initial investment in hardware totaled $175,000. Then PG&E requested that Adelman fork over $7,250 to conduct a study determining the actual cost of interconnecting his solar system to the grid. After that, PG&E asked him to pay $605,000 to perform a study to prove that his solar system was safe.

He didn't pay that sum, but Adelman has forked out $100,000 to his attorneys to deal with PG&E's array of complaints and concerns. On a happy note, Adelman notes that PG&E seems to be embarrassed about the notoriety he has achieved in his battle to generate solar electricity and now seems prepared to allow him to make full use of his solar array--if he just ponies up another $11,000.

PG&E, not surprisingly, has a different point of view. John Nelson, a PG&E spokesman, said Adelman's solar system created problems for PG&E because it was located at the end of a distribution line, "not the ideal location for a mini-power plant." He claimed Adelman's solar system created a phenomenon called "islanding," where pockets of excess electricity can pool and overload the electricity circuits of Adelman's neighbors. "Buying and installing a solar PV system is not like going to Home Depot and buying a diesel generator. These things [solar PV systems] take a fair amount of time to set up," Nelson said.

Adelman, an engineer, counters that his solar system is perfectly safe. His story of alleged utility harassment is not atypical. "The story of Ken Adelman just goes to show you that the California Legislature passes laws to encourage solar energy, but the private utilities find ways to get around the laws," said Ed O'Neil, an attorney working on behalf of solar enthusiasts. "They know how to make sure that very few people can afford solar power. For every person installing a solar photovoltaic system, there are numerous others who would have, but haven't because of the hassle and the costs utilities try to impose."

It would seem that winning energy independence from out-of-state shysters like Enron of Houston, Texas, would be a top goal of state lawmakers. Yet state legislation designed to stimulate large-scale solar energy systems such as Adelman's to reduce expensive power buys during the dog days of August has quietly been sabotaged by PG&E and the state's other private utilities.

If Assembly Bill 58 by Fred Keeley (D-Boulder Creek) becomes law in its present form (as of presstime, it had passed the Assembly and the Senate), the United States will slump further behind our German and Japanese rivals on solar photovoltaics. Hijacked by the state private utilities, AB 58 reduces the value, while increasing the complexity, of independent customer-owned solar systems. This is the exact wrong thing California, with its abundant sunshine, should be doing at this moment in human history.

AB 58 modifies something known in the energy business as "net metering," which simply allows a customer that installs a solar system to send the electricity it cannot use on-site back to the grid to be consumed by others.

The "net" in "net metering" refers to the netting of kilowatt-hours consumed from the grid against those produced and sent back to the grid; the meter spins back and forth accordingly. According to Keeley's office, 2,200 customers take advantage of net metering today; another 700 have applications pending.

Keeley claims to support solar energy and has been doing his best to fashion a bill that can make it to the governor's desk and be signed into law. He failed to return repeated calls to his office to comment on the utility amendments.

A Solar Energy Future?

"Should four and a half million of our customers shoulder some additional cost so that one customer can make money from his solar system?" asked PG&E's Nelson. "The politicians of this state are going to have to explain to our customers that if you don't own a solar system, you are going to have to pay more."

The utilities' standard mantra is that the small number of customers installing solar panels shift costs to the majority of other customers. During interviews, however, utility representatives acknowledged that the actual cost shift is tiny. At present, customers without solar are paying less than a penny per month.

California led the nation in allowing "net metering" in 1995 when it passed a law authorizing such transactions for small systems 10 kW in size or smaller. Thirty-six other states have since followed our state lead on this issue, allowing customers to establish a two-way relationship with their utilities by also becoming independent power producers.

Katherine Hackney, lobbyist for Southern California Edison, described California's current net metering provisions as "indefensible" because these provisions supported a "fundamental inequity" between solar producers and other consumers. Her beef is that solar generators get compensated at the peak retail rate, even if the power produced occurs during off-peak times. Of course, the majority of power put on the grid by solar systems is during peak demand periods, when the sun is shining the brightest. Customers who do not have solar systems pay the same rate credited to customers who are also solar generators.

Over the last two years, there has been one bright spot amid the gloom in California's energy supply markets: dramatic increases in large-scale solar photovoltaic installations. Assembly Bill 58, which passed in its current form and is headed for the governor's desk, could set a damaging precedent throughout the country, frustrating the inevitable switch from finite fossil to unlimited renewable energy sources.

AB 58 would extend net metering for large solar generators such as Adelman, but more often than not local governments, businesses and nonprofits, indefinitely. This long-term commitment to net metering is the kind of stability in public policy the solar industry is looking for.

However, lobbyist Hackney inserted an amendment into AB 58 that reduces net metering credits for large solar producers by 30 to 50 percent. It also requires customers to install an additional meter at their own expense, further complicating the process. Keeley agreed to these amendments in order to gain utility support for AB 58 before it passed a key Senate committee vote in June.

According to Vince Schwent, a solar energy manager for the Sacramento Municipal Utility District (SMUD), the world's solar energy leader, the current version of AB 58 could wreak havoc with Sacramento's future solar energy expansion plans. "It is a negative for the customer. They get paid less, and the whole program is far more confusing. From a utility standpoint, SMUD prefers the existing net metering arrangement. It is much simpler from a billing and accounting practice."

"The beauty of net metering always has been its simplicity," commented Tom Starrs, CEO of Schott Applied Power Corporation of Rocklin, Calif. The utility amendments to AB 58 "compel the solar industry to participate in lengthy and complex regulatory proceedings. The utilities use their customers' money to dedicate teams of attorneys at these proceedings, while the solar industry can hardly afford to participate. These utilities have a 100-year history of completely dominating such proceedings and manipulating the results to their advantage."

Revolution in Energy

Many futurists predict solar photovoltaics, which can be integrated into rooftops, windows and walls, will be a key source of electricity in the 21st century.

If any region of the state could appreciate solar PV technologies, it's Silicon Valley. The silver lining in the higher power prices prompted by last year's "energy crisis" is that we now have the tools and technologies necessary to propel a revolution in energy. Proponents see new technologies such as solar PV as the equivalent to the wireless cell phones and portable laptops that replaced traditional grid-connected phones and mainframe computers.

The electricity grid that serves Silicon Valley, with its emphasis on large, centralized polluting power plants sending power long distances over transmission lines, is an artifact that is more than 100 years old. The architecture of the existing transmission grid is the antithesis of distributed networks being made possible by the Internet. And in post-9/11 America, this centralized network of polluting power plants represents high-profile terrorist targets.

So far, the only Silicon Valley company to see the solar light is Cypress Semiconductors, a large multinational global supplier of high-performance integrated circuits. The firm installed a 335 kW solar PV array as part of its efforts to bolster reliability in response to the rolling blackouts that hit California last year.

The city of San Jose is currently investigating installing an even larger solar array on its own buildings and would like to take advantage of net metering. However, city officials and staff seemed to be in the dark when it comes to realizing how PG&E could screw up the city's solar plans.

"Net metering offers a valuable incentive to local governments to invest in renewable energy technologies," commented Linda LeZotte, a San Jose City Councilmember who has been a strong advocate for solar energy. While not familiar with the particulars of AB 58, she did go on to say that she had "serious concerns about any legislation that undercuts our ability to promote cleaner forms of energy generation."

Alameda County already has the largest rooftop solar power system in the country at 1.2 megawatts. And due to the passage of two propositions on the November ballot last year, San Francisco is poised to become the global leader on solar power over the course of the next decade by adding as much as 50 MW of solar PV arrays.

But the current version of AB 58 may jeopardize visionary solar projects by changing the economics. If that wasn't bad enough, PG&E and its utility cohorts also want to charge solar generators "exit fees" to help pay off the $40 billion in contracts for fossil fuel power authorized by the Davis administration.

AB 58 has passed the Assembly, where the influence of private utilities runs deep, and now awaits the governor's signature. Kari Smith, manager of regulatory affairs for Berkeley-based PowerLight Corporation, which specializes in large-scale solar projects, summed it all up succinctly: "Does California want to support solar or not? This is the fundamental question."


Peter Asmus is the author of 'Reaping the Wind: How Mechanical Wizards, Visionaries and Profiteers Helped Shape Our Energy Future' and the co-author of 'Reinventing Electric Utilities: Competition, Citizen Action and Clean Power,' both published by Island Press. He has covered California's energy markets for 15 years.


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From the August 22-28, 2002 issue of Metro, Silicon Valley's Weekly Newspaper.

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