The move was approved with a 5-0 vote by the California Energy Commission, in what supporters of solar energy are hailing as a monumental moment.

“This is an undeniably historic decision for the state and the U.S.,” Abigail Ross Hopper, the Solar Energy Industries Association’s CEO said in a statement. “California has long been our nation’s biggest solar champion … now, California is taking bold leadership again, recognizing that solar should be as commonplace as the front door that welcomes you home.”

The regulation will go into effect once it receives its expected approval by the Building Standards Commission later this month.

And while proponents of renewable energy may be pleased with the decision, there’s mounting concerns that the requirement will only aggravate the state’s home affordability crisis, as the mandate is expected to add at least $10,000 in additional construction costs.

However, supporters argue that utility savings will balance out that cost in the long term.

“Adoption of these standards represents a quantum leap in statewide building standards,” Robert Raymer, technical director for the California Building Industry Association, told the commission. “You can bet every other of the 49 states will be watching closely to see what happens.”

But Republican leaders are already coming out against the decision, framing it as just the latest example of government overreach in Sacramento.

“That’s just going to drive the cost up and make California, once again, not affordable to live,” Republican Assemblyman Brian Dahle reportedly said of the dangers of the rules.

The mandate will apply to all homes, condominiums and apartment buildings up to three stories high — with exceptions for structures that are covered by shade.

According to the commission’s own estimates, the panels will cost homeowners around $40 a month, but save them about $80 a month on heating, air conditioning and other costs.

“This is great for wealthier homeowners, but for everybody else it’s one more reason to not go to California or to leave ASAP,” American Enterprise Institute economist Jimmy Pethokoukis said on CNBC Wednesday.

More broadly, the move is part of California’s plan to have all residential buildings be “zero net energy,” which means that the the total amount of energy used by the building is the same as the amount of renewable energy it creates.

The Los Angeles Times also reported on how solar subsidies often amounted to a transfer of funds from the state government to very wealthy Californians.

As the understanding grows that green energy policies create political winners and losers, a new U.S. Energy Information Administration report shows how rapidly California is advancing with solar power:

Solar generation from utility-scale facilities (capacity of 1 megawatt [MW] or greater) hit a monthly record high of 2,765 gigawatt hours (GWh) in June 2015. The June 2015 solar generation level represents a year-over-year increase of 35.8 percent relative to June 2014. …

Most of the growth in U.S. utility scale solar generation is in California. In June 2015, well over half (56.5 percent) of total solar generation came from plants in California. Arizona (13.4 percent), North Carolina (6.7 percent), Nevada (6.4 percent), and New Jersey (3.3 percent), respectively, followed California as the largest solar contributors to the grid.

But it’s not the utilities building “utility scale” solar facilities. It’s usually multinational corporations setting up solar facilities in the expectation that Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric will buy their electricity to meet the state’s ever more ambitious goals for renewable-energy generation.

The utilities still have enough influence that they managed to persuade the California Public Utilities Commission to adopt a new pricing structure in July that made individual homeowners and businesses that have installed solar panels pay more toward maintenance of the state’s electricity grid.

Utilities: Part of ‘green industrial complex’ or not?

This would seem to presage a future in which power utilities are part of a “green industrial complex” that conservative publications have long warned of — companies and institutions which seek to profit from government environmental mandates that appear popular in red states and blue states alike.

But that’s not how the nation’s investor-owned utilities think the end game of current green politics are likely to play out. As The Washington Post reported earlier this year, it had obtained secret documents from the Edison Electric Institute, a utilities trade group that believes that the growth of renewable energy is an existential threat — not something that can be gamed by rent-seeking with regulators and state legislatures:

If demand for residential solar continue to soar, traditional utilities could soon face serious problems, from “declining retail sales” and a “loss of customers” to “potential obsolescence,” according to a presentation prepared for the group. “Industry must prepare an action plan to address the challenges,” it said.

That action plan so far has focused on getting state utility regulators to make solar-panel owners pay more toward maintenance of the electric grid — an effort that worked in California but that the Post notes hasn’t worked well in most states.

So whom might the utilities find common ground with in their fight against a solar power future? As complaints from urban Democrats in the Legislature suggest, an obvious candidate is lawmakers who understand that cleaner power is usually costlier power.

So far in California politics, the factions that make up the Democratic coalition have managed to stay on the same page on the biggest issues of the day. But if utilities begin to use their clout to warn that poor people are hurt by AB32-style policies — a potentially potent argument in the state with the highest effective poverty rate — that could roil and possibly recast the politics of the Golden State.

Previously, a CalWatchdog.com story covered Carson Bruno’s research showing that the state of California has far surpassed its 2020 goal of having 33 percent of electricity coming from renewable sources. So why isn’t this big news? Because according to state laws establishing the 33 percent goal, some renewable energy doesn’t count as renewable energy.

Bruno also makes a provocative point about Gov. Jerry Brown’s goals on another energy front:

California may be the greenest state in the nation. The Golden State’s renewable portfolio standard is among the nation’s most aggressive, the state’s cap-and-trade program is likely the most developed, and each legislative session lawmakers grapple over dozens of new environmental-based bills. … So it didn’t come as any surprise that during his 4th (and final) State of the State address, Jerry Brown focused heavily on taking California’s already aggressive climate change action to the next level. …

Brown [said the state would] double the energy efficiency of California’s buildings. …

This proposal is the most straightforward, but also may be the most difficult to achieve. Here’s why: California is already the national leader – coincidentally, since Jerry Brown was first governor – in energy conservation.

Conserving more would be akin to squeezing out more lemon juice from an already squeezed lemon: you’ll get a little, but not that much. Californians use approximately the same amount of energy they did 40 years ago as the rest of the nation has increased its use by roughly half. This is despite California’s population and economic output steadily increasing. California’s Mediterranean-like climate helps reduce energy use, but that can’t explain the full difference.

Here’s where the paradox comes in, however. We know how to get to the next step: technology. Smart metering enables consumers and providers to better understand their behavior to encourage conservation; new lighting technology and new advances in heating and cooling systems better reduce waste. But even with new technology, doubling efficiency while California continues to grow and after California has already squeezed a lot out of consumers won’t be easy.

‘Build it and they will come’ regulatory approach

There’s always been an element of “build it and they will come” to California environmental regulators’ habit of establishing goals that seem unrealistic but that the private sector manages to meet. More than a few engineers were skeptical that cars averaging 35 MPG was a realistic goal, but that’s now the federal mandate for coming years, as the Obama administration follows the California example of demanding change that seems daunting. As Car & Driver wrote, “as goes California, so goes the country.”

But there are two recent examples of California regulators going too far and retreating in embarrassment. In 2010, they backed down from a proposal to criminalize having under-inflated tires after I wrote about it on my U-T San Diego blog and John & Ken took up the cause on KFI AM 640. This was the informal analysis of the proposal from the California New Car Dealers Association:

(The) regs. CARB’s pushing through (released this week and subject to a 15 day comment period) … provides that the only times that consumers may decline a check and inflate service — they can never decline the service if it’s offered for free — is when they are charged for services AND if they can PROVE (with DOCUMENTATION!) that they’ve had their tires checked and inflated in the last 30 days, or if they WILL do so within the next week. It is unclear, but possible, that CARB could take enforcement action against the consumer if they don’t follow through with their promise?!

In 2009, California regulators also backed down from a tentative proposal to ban black paint on cars after facing incredulity from U.S. and Japanese automakers. Snopes treats this as a “mostly false” story. But I spoke with an executive for an auto paint company in 2009, and she said California air board staffers were absolutely serious about the idea in meetings early that year. That’s how it was treated by an auto-industry website.

This link — http://www.arb.ca.gov/cc/cool-paints/cool-paints.htm — used to show the air board’s proposal, but now it only shows an error message.

Senate Bill 350 mandates that the state meet three clean-energy goals by 2030:

• Fifty percent reduction in gasoline and diesel fuel used in vehicles.
• Fifty percent of electricity generated from renewable resources (an increase from the current 33 percent mandate by 2020).
• Doubling of the energy efficiency of existing buildings.

The bill does not specify how those mandates will be achieved. It leaves the details and the authority to implement and enforce them to the California Air Resources Board, the California Energy Commission and the California Public Utilities Commission.

Jobs created and economy boosted?

The bill’s author, Senate President Pro Tem Kevin de León, D-Los Angeles, told the Senate Energy, Utilities, and Communications Committee at an April 7 hearing that the legislation will “make sure California keeps leading and building the new economy of tomorrow. SB350 puts in place standards that will spur innovation and power and a sustainable future for the Golden State.

“Clean energy jobs are growing across California. Our state leads the nation in solar employment with nearly 55,000 solar jobs and counting. The world’s largest solar array is under construction right now in Antelope Valley down in Kern County. We are second only to Texas in wind energy capacity, and have the nation’s largest wind energy facility at the Alta Wind Energy Center at the Tehachapi Pass.

“We need to pursue policies that build on this economic growth by strengthening incentives for energy efficiency and clean energy technologies. These standards send a strong market signal to California businesses and leave no doubt the direction we are heading in. These policies will drive innovation here, bring investments here, bring jobs here and bring revenue here to this state of California.”

De León said that experience with implementation of AB32, the California Global Warming Solutions Act of 2006, shows that increased energy regulation can help the economy.

“Skeptics said back in the day it would destroy our economy, it would slow down economic growth, that it was naïve and in fact unrealistic to set such targets,” he said. “Well, yet here we are today well on our way to meeting those targets with an economy that is stronger than ever.

“In just 10 years we’ve increased our electricity generation from renewable sources nearly 25 percent, put almost 150,000 electric vehicles on the road and reduced the smog-forming emissions of our cars and trucks by 90 percent. This is not just sound energy and climate policy, it is a smart economic policy.  Let’s continue to lead the world, colleagues. Let’s continue to take the bold action, despite the fear of failure.”

Steyer backs de Leon

De León was backed by Tom Steyer, an environmental activist who donated $2.5 million to the campaign that defeated Proposition 23 in 2010. That proposition sought to suspend AB32’s regulations until California’s unemployment rate dropped below 5.5 percent. Although the national unemployment rate has dipped to that level, California has lagged behind. The state’s rate was 6.8 percent in February.

Tom Steyer

“SB350 focuses on several of the most important and fossil-fuel-intensive areas of our economy: transportation, electricity generation and energy used in buildings,” Steyer told the committee. “By directly engaging with our biggest emission sources, we can get the best bang for our buck in reductions.

“For too long the oil companies that make billions in profits from California consumers have claimed that sustainability is not compatible with a strong economy. Far from being a job killer, California’s climate policy has put thousands of people into good-paying jobs. According to a recent report from Advanced Energy Economy, there were 430,000 clean energy jobs in California during 2014, a figure that’s projected to increase by 17 percent this year to 500,000 clean energy jobs.

“We have led the nation in solar capacity and electric vehicle sales. We have gained billions of dollars of investment in wind and solar power and created hundreds of thousands of clean energy jobs. Energy efficiency upgrades have created hundreds of thousands more.

“We don’t have to choose between our environment and our economy. California, as the seventh largest economy in the world, can be more than part of the solution – we can lead. But to do so we have to be on a completely different cost curve. One that is inevitably going down, thanks to innovation research, rather than one that is driven inevitably up due to issues of scarcity around fossil fuels. SB350 is a critical step in this direction and a clean aspect of maintaining our global leadership.”

Steyer said that much of the $60 billion that Californians spent on gasoline and diesel fuel in 2014 can be replaced with low-carbon alternatives such as electricity, renewable natural gas and biofuels. Californians have purchased more than 100,000 electric vehicles, he said, and touted that 18 pumps in the Central Valley are selling renewable diesel fuel made from waste oil.

A win-win

He also discussed the requirement to double the energy efficiency of existing buildings. “The cheapest and most environmentally friendly way to cut energy costs is, of course, to use less energy,” said Steyer. “Our state’s commitment to energy efficiency has led to the third lowest per capita energy consumption rate in the nation. Electricity use per person in California has remained flat for 40 years, while consumption in the rest of the country has increased by 50 percent.”

Steyer is confident that the clean-energy goals will be a win-win for both the state’s environment and its economy.

“I have spent most of my life as an investor,” he said. “And I can say for certain that investors look for consistent long-term signals to know that their capital will yield returns. SB350 demonstrates our firm commitment to clean technology, and sends a clear signal to markets that long-term investment in sustainability will be rewarded. California can unlock the potential of our businesses by committing to long-term goals and by building a market that rewards innovation.

“In conclusion, I know these goals are challenging, but we have to do it. Overcoming these kinds of challenges is what leadership is all about. California is at a crossroads yet again. We can choose to continue moving forward and leading the world on creating a cleaner, more sustainable future for our children, or we can give up our leadership role. I’m confident that we will make the right choice.”

Business leaders see devastating economic impact

But business leaders are just as confident that the energy mandates will hurt the state’s economy. The Western States Petroleum Association is particularly concerned about the requirement to cut in half gasoline and diesel use by 2030.

“In the absence of available and affordable alternatives, we believe such a step would have a drastic and devastating impact on California’s economy, businesses, and families statewide,” said WSPA President Catherine Reheis-Boyd in a press release. “SB 350 would give the California Air Resources Board vast new authority to develop those mandates with providing clear policy or regulatory direction.”

The California Chamber of Commerce has dubbed the bill a “job killer.” It issued a statement urging legislators to oppose the legislation, saying that it sets an “arbitrary and unrealistic reduction of petroleum use, increase in the current Renewables Portfolio Standard and increase in building energy efficiency without regard to the impact on individuals, jobs and the economy.

“SB 350 provides a blank check delegation of authority to CARB, and in doing so, gives no consideration to the cost or job loss associated with this yet-to-be-determined regulation.

“Most of California’s businesses and families rely on petroleum for day-to-day transportation needs. SB350 could compromise the availability of transportation fuels. The California Energy Commission reported in its 2014 Integrated Energy Policy Report that 92 percent of all transportation fuels in California are made up of petroleum.

“Businesses rely on petroleum to transport goods and people, and it is unclear how the arbitrary goal in SB350 will be met. Will there be a 50 percent straight reduction in the production of petroleum in the state? Will we have to ration petroleum to achieve the 50 percent reduction? At what cost?

“In addition to the 50 percent reduction in petroleum use, SB350 seeks to increase the current Renewable Portfolio Standard from 33 percent to 50 percent as well as increase energy efficiency in buildings to 50 percent. Both these policies will significantly increase costs to ratepayers.

“California’s energy price per kilowatt hour is among the highest in the nation and the state’s energy efficiency standards are among the strongest. Mandating upgrades to meet increased energy efficiency standards while increasing the cost of energy will make California businesses less competitive.”

Legislators voice concerns

The three Republicans on the committee voted against the bill, which passed 8-3 with all of the Democrats supporting it.

Sen. Anthony Cannella, R-Ceres, said he’s concerned that California will actually have a surplus of energy, nearly 14,000 megawatts of over-generation, by 2024. He cited a recent op-ed coauthored by CPUC President Michael Picker that warned that “when there is more electricity being generated than places to store or export it, it must be turned off or it threatens reliability of the grid.”

Cannella, who said his district has a very high poverty rate, is also skeptical that the promise of electric vehicles will be fulfilled.

“Look, I would like to drive an electric car,” he said. “I can’t afford it; most of the people in my district can’t afford it. But regardless of that, I’m concerned about the ag industry, the trucking industry and rural communities that have to drive. And, really, I just don’t think electric vehicles will be sufficient for tractors or trucks. And so, setting a 50 percent reduction without excluding those industries, I think you’re going to create a lot of problems.”

Sen. Mike Morrell, R-Inland Empire, questioned Steyer’s optimism about the economic benefits of increased energy regulation.

“You made positive comments about creating jobs in the future,” said Morrell. “But we have the Chamber of Commerce, the Manufacturers Association, the National Federation of Independent Business, among many others who have had decades of a proven track record of creating jobs, millions of jobs. These organizations with millions employed under them, with proven decades of a track record, say this is a job killer.”

Green jobs vs. oil and gas jobs

Steyer responded that the clean-energy sector of the California economy is “growing at a very large clip… . This kind of policy is the kind of thing that will make that growth much faster and more important. We’ll be the first down the cost curve in this industry worldwide. And the rest of the world has to follow us. We will build gigantic business out of this. So I strongly believe this is good for California employment.”

Sen. Jean Fuller, R-Bakersfield, isn’t buying that argument. She said that one of the counties in her district produces most of the gas, oil, solar and wind energy in the state. “It’s been very hard for us to put ourselves in that position,” she said. “As you can imagine, that’s not an easy marriage among all of those groups. But we are very pleased with that.

“But the worry that I have is that as we ramp up one – the solar and wind – we gain a few jobs, but it’s mostly like one person per solar field. And you know how large solar fields are. And usually it’s a very low-level job; it really doesn’t require a lot of expertise. The oil and gas industry is very, very much more labor intensive. There’s a lot more jobs. They are much higher expertise. Most of our small families have been there for many, many years.

“And when we ramp down that industry, you really hurt our county. You really displace workers. And you really don’t leave us a way to replace that kind of infrastructure. So the inland area, who have willingly served as the energy production for the rest of the state, will be hurt massively. And I doubt that we will ever recover.”

Helping or hurting minorities?

One Democrat on the committee, Sen. Ricardo Lara, D-Bell Gardens, also expressed concern that the state’s poorest residents, particularly Hispanics, are not enjoying the benefits of the clean-energy economy.

“Because what we see, and what we have continued to see, is that the people that are making themselves rich out of these technologies don’t look like you and I,” Lara said to de León. “And don’t come from the economic experiences and backgrounds that we share. And so, if we want to make this as successful as possible, we have to ensure that everybody reaps the benefits. Not only in terms of job creation. Because you know us people of color, all we want is a job.

“But now it’s time for us to ensure that if we’re going to create this and mainstream this, that we not only get a job out of this, that we also get economic prosperity. And that the folks are going to be able to make money off this, it’s diversified and enjoyed throughout the entire economic strata of our state. And that we don’t continue to widen the gap between the rich and the poor.”

De León responded that minorities – or as he termed them, “individuals who look like California” – will be prime beneficiaries of the building retrofit jobs spawned by his bill. “I appreciate and understand your concerns,” he said. “I know as a person, as a legislator who represents the 24^th Senate District and as a pro tem and as a person of color, I know that I’m doing my part to proactively make sure that this is an inclusive economy.”

De León applauded the bill’s approval in a press release: “The committee was presented with a clear choice: help usher California into a new era of cleaner air and a cleaner economy or stay stuck in a poisonous fossil fuel economy. I’m grateful the committee made the right choice.”

SB350 will next be heard by the Senate Environmental Quality Committee later this month.

But this rapid growth is slowing as Hawaiian Electric Co., Hawaii’s sole power utility, increasingly objects to policies that require it to buy excess power from these homes at rates it sees as overly generous. This report is from last month:

In a filing with the state Public Utilities Commission last month, HECO argued that solar system owners can end up paying nothing to the utility, yet still rely on its grid daily, drawing electricity at night and when clouds pass. That means grid operation and maintenance costs are “increasingly being shifted from those who have solar to those who don’t,” wrote HECO in the filing.

This foreshadows a big battle that lies ahead in California: whether and/or how much residential solar installations should be encouraged with de facto or direct subsidies. So far, according to the utilitydive.com website tracking utility news around the U.S., California’s regulators appear wary of a commitment to any subsidies, not just long-term ones.

‘Costs should be borne by participants’

Last week, the website took an in-depth look at the latest version of the California Public Utilities Commission’s community solar rule, which has been crafted in response to a state law committing California to establishing 600 megawatts of community solar power generation. The first principle of the regulations is sure to spur criticism from politicians and advocacy groups who want California to shift even more quickly than it is away from fossil fuels:

Careful rate design and procurement can create ratepayer indifference and prevent program costs from being shifted to non-participating utility customers. …

The first finding was central for the IOUs [investor-owned utilities]. “Our program adheres to a principle that program costs should be borne by participants,” noted PG&E Community Solar Program Manager Molly Hoyt. “There is no cross-subsidy paid by non-participating customers.”

But in accepting the utilities’ proposals for rates and contract terms, said VoteSolar Western Region Director Susannah Churchill, it is possible the commission compromised affordability.

“I am worried that affordability is going to be a problem and the limitation that customers can only subscribe to the program for a maximum of one year means that they can’t lock in their credits and charges long term,” Churchill explained. “That is going to create uncertainty and may be a big barrier for program uptake.”

While mid-size solar projects remain more expensive than conventional generation, a small premium for renewables makes sense, she said. Many customers will be willing to pay more for 50 percent or 100 percent renewables-generated electricity.

Friendly to solar homeowners — or to state economy?

As state lawmakers gear up for successor laws to 2006’s landmark AB32 energy-regulation law, and as solar panels come down in price, this debate will grow ever more heated. It can be framed as whether alternative-energy policies and laws should be friendly to homeowners doing the right thing for the environment or whether they should be assessed in a cold, bottom-line fashion about their overall impact on energy costs and the economy.

Germany’s experience with its national Energiewende policy, adopted in 2011, holds lessons for California regulators and politicians. This is from a 2013 Reuters story:

Angela Merkel’s “green revolution” risks becoming a victim of its own success.

Seduced by generous subsidies, Germans are embracing the ambitious project with such fervor — installing solar panels on church roofs and converting sewage into heat — that instead of benefiting from a rise in green energy, they are straining under the subsidies’ cost and from surcharges. …

“Germany’s dilemma is how to keep industry’s energy prices low enough to remain competitive and meet ambitious (green) targets while also maintaining a balanced budget,” said Will Pearson, head of global energy at the Eurasia Group in London. “Addressing these will pose a political challenge.”

So attractive are the incentives, or feed-in tariffs, that the rapid expansion of renewable power has driven up the surcharges which fund them and are paid for by consumers. The charge rose by 47 percent this year alone.

Both households and industry are feeling the pain and exporters complain that the energy shift has driven up power prices so much that their competitiveness is being eroded.

This may portend what awaits California in coming years as environmentalists ramp up their push for renewable energy. If the effort leads to broadly higher prices, a reprise of 2010’s Proposition 23 fight is likely. That ballot measure attempted to suspend AB32 until state unemployment was at 5.5 percent of below for 12 consecutive months. It lost 61.5 percent to 38.5 percent after being depicted as an attack on air pollution laws.

The odds of a successor measure passing would seem likely to be much higher if California residents and businesses faced a Germany-sized green-energy price shock. Supporters of the 2010 initiative didn’t only include oil companies and voters who thought California shouldn’t go it alone in trying to reduce the emissions believed to cause global warming. The State Building & Construction Trades Council backed Prop. 23 on the grounds that AB32 would be harmful to the state’s economy.

So they oppose anti-union Walmart, even though the Obama White House’s top economist says Walmart’s low prices make it a progressive godsend for poor people.

So they back high taxes and heavy regulation, which prevents job growth and leaves California with the nation’s highest effective poverty rate.

So they back a public education status quo in which the interests of veteran, tenured teachers top the interests of every other “stakeholder” combined. If you think that’s exaggerated, remember that we have a 1971 state law requiring that student performance be a part of teacher evaluations. Not only is the state law ignored, insanely enough, a stage agency — the California Public Employment Relations Board — seriously argues that the law should be subject to retroactive collective bargaining.

Now comes another Dem-sanctioned pounding of the poor

But what’s not yet widely appreciated is how California’s greens’ energy policies, starting with AB 32, will hammer the less fortunate. Five years ago, air board documents forecast an increase of as much as 60 percent in retail energy costs after AB 32 took full effect in 2020. Who is least able to deal with such a rate shock? Duh. Poor people.

We’re getting a sneak peek at what the future holds from Maryland. This is from National Review:

“Governor Martin O’Malley’s aggressive green agenda has favored expensive renewable-energy sources, driving up the cost of electricity. The 784,000 Marylanders who are living in poverty, and many more on the brink of it, have been particularly hard hit, even though sometimes the cost is offset by subsidies.

“Since O’Malley assumed office in January 2007, residents’ electricity rates have increased by 43 percent, according to estimates from Change Maryland, a group chaired by Larry Hogan, a Republican who intends to run for governor. …

“By 2020, O’Malley wants 18 percent of the state’s energy to be supplied from green sources, even though natural gas is at least 37 percent cheaper an energy source than onshore wind, and solar energy is at least 98 percent more expensive than conventional coal. Working toward this goal, the governor has backed several green policies, despite their impact on electricity prices. …”

Higher cost a feature, not a glitch

“The increased cost of energy isn’t just a side effect of Maryland’s environmental agenda; for radical green policymakers, it’s the point, explains Myron Ebell, the director of energy and global-warming policy at the Competitive Enterprise Institute. Already, consumption has decreased by 9.4 percent under O’Malley’s tenure, according to the Maryland Energy Administration.

‘The purpose of [such green policies] is to make people poorer so they can’t use as much energy,’ Ebell says. ‘They are making life very difficult for the lower-middle-class and working-class people and creating a greater divide between rich and poor, and despite the rhetoric that we need to reduce inequality, it’s really designed to do the opposite.'”

“Maryland’s poorest families could breathe easier if they were allowed to use cheaper energy sources.

“The Maryland Budget & Tax Policy Institute has highlighted a ‘home energy affordability gap,’ noting that energy is considered affordable when it costs less than 7 percent of household income. But in Maryland, people at 50 percent of the federal poverty level or below devote about 40 percent of their income to energy consumption, says Richard Doran, program director of the Fuel Fund of Maryland. …

“Right now, Doran says, at least 500,000 state residents are struggling to pay their utility bills. And Children’s HealthWatch, which provides nonpartisan policy analysis, reported in 2011 that 15 percent of Baltimore residents had been threatened with a shutoff and that an additional 18 percent were heating their homes with a cooking stove, had experienced a shutoff, or lived in an unheated home.”

This is the coming reality, California: already-impoverished people being further impoverished by AB 32.

The party of the poor isn’t really about the poor. It’s about the needs and whims of its slice of the middle class, in this case the green religionists.

Shiroma, a Democrat, was an outspoken opponent of 2010’s Proposition 23, which would have suspended AB 32, California’s Global Warming Solutions Act of 2006, until unemployment in the state dropped to 5.5 percent. Shiroma was also Board Chairwoman of the Sacramento Municipal Utilities District.

A 2009 study of AB 32, “Cost of AB 32 on California Small Businesses,” was by two Cal State Sacramento economists, Sanjay B. Varshney and Dennis H. Tootelian. It found that AB 32 would kill 1 million jobs by 2020.

On farming specifically, the study found that small farm businesses would be hit with $498 million in additional costs for AB 32 compliance due to increased prices for fuel, machinery, fertilizer, etc. Farm income would decline by $195 million. Farm workers would lose $101 million in income. And 3,671 jobs at small farms would be killed.

Despite such warnings, Prop. 23 was opposed by then-Gov. Arnold Schwarzenegger, then-gubernatorial candidate Jerry Brown and most of the state’s political establishment.

In her comments at a 2010 Sacramento event, Genevieve Shiroma, also president of the board of directors for the Sacramento Municipal Utilities District, said the utility helps to advance economic development and create jobs through its environmental programs, the Sacramento Press reported in 2010, in “Johnson, SMUD official protest Prop. 23.”

Mayor Kevin Johnson, Shiroma, and other representatives from public agencies and businesses receiving green subsidies said that Prop. 23 would harm the environment, green businesses and air quality.

“AB 32 has provided the vital regulatory certainty needed for venture capital investment, entrepreneurial innovation and market development to prosper in California,” Shiroma said while President of the Board of Directors for SMUD.

If Shirmoa had taken a different position on Prop. 23, it’s doubtful Brown would have re-appointed her as board chair.

After a highly funded demonization campaign, voters roundly rejected AB 23, 62 percent to 38 percent.

Part 1 of the ARLB series, What is the Agricultural Labor Relations Board, can be found here.

Part 2 of the series is background on Shiroma, and can be found here.

Now that the $2.167 billion California Solar Initiative is winding down, electricity ratepayers might ask: What was it and what did it accomplish? Was it:

1.) A cutting edge solar energy project to bring about a “self-sustaining” solar power industry, as touted by the California Public Utilities Commission (CPUC) and state legislators?

The answer is mostly no based on post-project evaluations done by academic experts.

2.) A program to replace very expensive conventional peak time power plants with equally expensive but clean rooftop solar electricity that is generated at the time of day when it is hottest?

The answer is no. Contending that rooftop solar power replaces conventional peak time power is bogus. This is because electricity rates are tiered depending on usage and climate zone and the fact that ultra peak power rates during heat waves and cold snaps only last maybe as much as four weeks out of 52 weeks in a year.

3.) An expensive, artificial green energy and jobs program that is now being wound down, as there is a recovery in the jobs market?

The answer is yes. Since California’s Solar Initiative did not produce a self-sustaining rooftop solar power market (Question No. 1) and cannot be justified as a replacement for expensive peak time electricity, this leaves us with one conclusion: It was mainly a jobs stimulus program that ended up adding about a $200 tax to 10.8 million utility customers’ electric bills.

Public Utilities Commission fudges the numbers

Here’s the background for these conclusions:

In 2001, the CPUC came out with a report, “California Solar Initiative Cost-Effectiveness Evaluation.” The report said that the CSI was a success because it reduced the subsidy for installing solar panels on a house from $2.50 to $0.20 per kilowatt installed. Success was measured by how losses were reduced, not by the actual market price of solar power without subsidies.

The CPUC website fails to clarify that cost of $6.16 per kilowatt is the cost installed, not the regulated price that consumers pay for electricity. What is called “net or reverse metering” — selling excess solar power back into the electricity grid — means that most customers have low electricity bills.

Dr. Severin Borenstein of the UC Berkeley Energy Institute reports that a rooftop solar power lifetime installation costs $86,000 to $91,000, but the value of the power produced over its lifetime is only $19,000 to $51,000.

What Californians actually pay for electricity rates is highly manipulated by what tier of energy use a customer falls into. Rates range from $0.13 to $0.34 per kilowatt-hour depending on usage and what climate zone a customer lives in. The California Public Utilities Commission failed to report what the retail price of rooftop solar power was both with and without subsidies. Presumably, if the retail price was lower than conventional “dirty” power sources the CPUC would have reported that, but it didn’t.

But has weaning electricity customers off large solar power subsidies worked? Did the Solar Initiative create a growing market for solar energy?

Millions of utility customers subsidize solar installations

Of course, the CPUC omitted disclosing that the $6.16 per kilowatt cost of installing rooftop solar power came by adding $2.167 billion to the electricity bills of other California electricity ratepayers. To provide subsidies to the 118,303 recipients of residential, commercial and governmental rooftop solar power installations the electricity bills had to be raised for 10.8 million customers of Southern California Edison, Pacific Gas and Electric (PG&E) and San Diego Gas and Electric (SDG&E) through its subsidiary the California Center for Sustainable Energy (CCSE).

In other words, the Solar Initiative mandated on average about 91 other electricity customers to subsidize the rooftop solar installations of each rooftop solar power installation. Spread over 10.8 million customers, that equates to about a $200 tax per California electricity customer. The California Solar Initiative is another socialized system like Social Security that is based on a larger base of utility ratepayers paying for a smaller number of recipients. It is a program based on privatizing profits and socializing losses.

Thus, the $6.16 per kilowatt cost installed and 43,000 solar-energy-related jobs created by the California Solar Initiative are artificial and not market-based. The program could never have become self-sustaining in the first place.

What has the Solar Initiative accomplished?

In his report “The California Solar Initiative is Ending, What Did It Leave Behind?” Borenstein (right) offers several conclusions:

“So, as the CSI fades away, is residential solar PV (photovoltaic) on stable footing going forward? Probably not. The tax credits are under constant pressure in Washington. The very-steep increasing-block rates seem unlikely to continue, primarily because the tiers don’t reflect real cost differences of supplying power. The power purchase agreements don’t lower the basic costs of residential solar, though they do reduce the customer’s risk from poor PV system performance or a utility rate spike.”

Borenstein says the only benefit gained from California’s Solar Initiative is that the cost of manufacturing solar panels has dropped substantially. But how long will that last without a constant flow of subsidies to retain trained installation crews?

Did the Solar Initiative grow the rooftop solar power market? Borenstein’s answer:

“Unlikely. The entire capacity installed under the CSI is less than 2% of the worldwide PV panel installations since 2007.”

In a previous paper written in 2008, Borenstein also studied whether rooftop solar installations were clustered in areas that would have reduced transmission congestion and the need for investments in new transmission infrastructure?  Borenstein found that rooftop solar was not clustered in the most valuable locations.

The rooftop solar installations completed under the Solar Initiative were not prioritized by geography to reduce grid congestion or eliminate the need for existing transmission lines. Solar-powered houses still need redundant conventional power hookups because sometimes solar panels are in the shade due to cloud cover, windstorms or smog.

But doesn’t rooftop solar replace pricey peak power?

But does rooftop solar power replace expensive and polluting conventional peak power plants (coal, natural gas, oil)? Does it replace expensive but non-polluting industrial solar farms that blight California’s natural deserts?

Peak power is high-priced power resulting from spikes in demand for electricity due to a heat wave, cold snap, power outage from a blackout due to system failure, or from regulations that create a “pricing fever” such as occurred during the California energy crisis of 2001.

Peak power can be contrasted with “base load power,” which is the power needed to meet the energy demands on typical days.

The average price of peak power in California on July 4, 2013 according to “Energy News Data” website ranged from about $7.10 to $49.70 per megawatt hour (or $0.07 to $0.49 per kilowatt hour). The average retail price for non-peak electricity in California is $0.15 per kilowatt-hour as of April 2013. Some of California’s peak power is imported from the Columbia River, the Klamath River, and coal power plants in Arizona, Nevada and Utah.

Peak prices can spike to $250 per megawatt hour (or about $25 per kilowatt hour) during the hot July and August months in California. So heavily subsidized rooftop solar power may look like a real deal. But such peak prices typically only last for one to two weeks or so during the year.

And when the sun doesn’t shine or rain or dust storms reduce solar power output, redundant gas-fired power plants have to be available at an instant to back-up roof top solar power. Back up power — also called “spinning reserves” — doesn’t come cheap because it has to be on stand-by 24/7/365 but can recover its costs only over a very short period of high demand. And back-up power availability means that California rooftop solar power is not actually reducing air pollution. California solar power is merely exporting its pollution by stealth to nearby states just as it does with conventional power.

The dirty secret of all green power is that it does not eliminate backup power plants having to stay on standby and emitting air pollution in the process. So rooftop solar power does not appear to be justifiable or self-sustainable on the basis that it is a cheaper or cleaner source of peak-time power.

Solar advocates have new scheme for post-subsidy sales

Now that subsidies for rooftop solar power are being phased out, the solar energy industry is trying to push subprime energy home loans on unsuspecting homeowners. Has California learned nothing from its catastrophe with subprime residential housing loans?

The solar industry asserts that the bulk of California rooftop solar panels were installed in middle-class ZIP codes and were not just for wealthy homeowners. But the top 20 ZIP codes for residential rooftop solar installations subsidized by the Solar Initiative all were in wealthy ZIP codes and represented 10.3 percent of all the 118,303 installations under the program (see table below). Of a total of 2,591 ZIP codes in California, 20 wealthy ZIP codes ended up with a disproportionately high proportion of rooftop solar installations (data excerpted from interactive website of California Solar Initiative by author). This phenomenon of green-energy subsidies helping the wealthy should be familiar to CalWatchdog readers.

This is why the Little Hoover Commission is calling for a “time out” for all green power in California. The California Solar Initiative was an expensive, artificial jobs and clean-energy program that needs to be seen for what it really was. The California Solar Initiative should be left in the shade where it belongs.

By Chris Reed

A visit to the California Sierra Club’s priorities page illustrates one of the funniest and most ironic public-policy developments of our time. The club’s top three priorities are getting California “Beyond Coal,” “Beyond Oil” and “Beyond Natural Gas.” All fossil fuels are evil, you see.

But it is the gigantic boom in natural gas — not the subsidized, largely failed green energy revolution — that has helped the U.S. lead the world in reduction of the emissions believed to contribute to global warming. This reduction has come almost entirely because U.S. utilities have shifted from dirty coal to relatively clean natural gas, which is newly abundant because of hydraulic fracturing, which uses underground water cannons to free up energy supplies. The process has been around nearly 70 years but has become vastly more efficient in recent times because it has been enhanced by information technology that allows for much more precision in aiming of the water cannons. (This has also made the process much cleaner.)

Green think tank makes heretical case to green movement

Now an environmental group, the Breakthrough Institute, has broken through green dogma and put out a report making the case that it’s good to have abundant natural gas, even if it is an allegedly evil fossil fuel.

By Chris Reed

The latest Californa-based green energy fiasco took center stage in the House Committee on Oversight & Government Reform on Wednesday. It is Anaheim-based Fisker Automotive. This is from the Washington Post’s Wonkblog:

“It’s time for another round of scrutiny over the Obama administration’s clean-energy programs. On Wednesday, House lawmakers held a fractious hearing over federal loans that had been made to struggling electric-car manufacturer Fisker Automotive.

“There’s no doubt that Fisker is in serious trouble. The Anaheim-based company hasn’t built a vehicle since last summer after running into battery-supply issues and other problems. To date, the company has sold just 2,000 Karmas worldwide — a plug-in hybrid sports sedan that retails for $100,000. The Karma never really found a mass audience beyond Justin Bieber, Leonardo DiCaprio, and a handful of other A-list drivers.

“The Department of Energy finally halted all further loans to the company in June 2011 after having disbursed $192 million of a planned $529 million. (Since then, the government has seized some $21 million from Fisker’s accounts.)”

I love this part. As the kids say, epic fail:

“In the spring of 2012, Consumer Reports gave the Karma a failing grade after it died on the track. ‘This is the first time in memory that we have had a car that is undriveable before it has finished our check-in process,’ said Tom Mutchler.”

A fiasco for venture capital investors as well

An article on the Gigaom tech news site makes another interesting point. This wasn’t just a debacle for the Obama administration. It was a debacle for Silicon Valley venture capital investors who put tens of millions into Fisker:

“The heart of Fisker’s business model was in that early deal with Quantum. The idea was to design a gorgeous car, and have suppliers like Quantum provide the technology because off-the-shelf parts from suppliers would help keep costs down.

“But there were problems with this strategy: Sometimes, those parts had to be custom-made to fit the design vision, which resulted in higher prices for Fisker. Other times, parts were delivered late or, worse, faulty, but Fisker was locked in to those supplier relationships. Sources close to Fisker have also said that many of the parts were owned by the suppliers themselves, so Fisker didn’t own a lot of the internal technology. …

“Indeed, Fisker’s business model wasn’t the type that funders in the Valley typically like — it’s the polar opposite of the ‘Intel inside’ approach. That so many investors were so eager to back the company has left many in the electric car and tech industries scratching their heads over the years. ‘It would have only taken a couple a phone calls to industry veterans to have prevented all of this,’ says electric car advocate Chelsea Sexton, adding ‘there’s no excuse for not doing homework. It appears none was done.’”

But at least the venture capital investors lost their own money — not taxpayers’.