But among energy experts, there was considerable skepticism over PG&E officials’ assertion that the utility could sharply expand its renewable energy portfolio without higher costs to customers and without hurting supply reliability. The most striking criticism of PG&E’s plan came from those who said the utility would probably have to increase — not reduce — its use of fossil fuels in coming decades after Diablo Canyon’s two nuclear reactors close in 2024 and 2025.

Writing in Forbes magazine, geochemist James Conca was deeply skeptical of the claim the shuttering of Diablo Canyon wouldn’t cost PG&E customers. He also made the point that given the unreliability and cost of solar and wind power, PG&E would have little choice but to build plants producing natural gas, a fossil fuel, to replace the 11 percent of state electricity now provided by Diablo Canyon.

PG&E’s promise of no cost increase is dropped

Last week, the skeptics were proven right on the cost front. PG&E announced it was seeking a 1.6 percent increase in the average bill of residential customers to generate $1.77 billion over eight years to pay for the cost of closing Diablo Canyon.

This triggered fury among environmental groups. “It’s outrageous and it is totally deceptive what PG&E said before compared with what is actually going to happen,” Michael Shellenberger, the leader of Environmental Progress, a green advocacy group based in Berkeley, told the San Jose Mercury News.

But based on what’s happened after the closing of the Vermont Yankee nuclear plant in New England at the end of 2014, California environmentalists may have plenty more to be upset about in coming years.

Northeast utilities had years to prepare for the shuttering of Vermont Yankee on the Connecticut River in the town of Vernon, Vermont. Though legal fights continued in federal court, the nuclear plant’s closure appeared inevitable after the Vermont Legislature voted in 2010 against allowing it to continue providing one-third of the state’s power and to contribute to the region’s grid. Green groups expressed confidence that renewable energy would come to the fore.

Closing of Vermont nuclear plant leads to natural gas surge

That hasn’t happened. In January, the Independent System Operator for New England issued a report on energy supplies. In 2014, natural gas supplied 43.1 percent of electricity and oil supplied 1.7 percent. In 2015, natural gas supplied 48.5 percent and oil supplied 1.9 percent.

That’s a more than 5 percent jump in natural gas and oil electricity supply, from 44.8 percent to 50.4 percent.

In a March report, ISO New England implied that this was good thing: “Natural gas resources and renewables are displacing less economic and higher-emitting resources in New England. The ability of many natural-gas-fired plants to change output quickly helps to balance an increasing amount of generation from intermittent power resources that rely on the wind and sun.”

Unless wind and solar power technologies become much more efficient and reliable by 2024, the tough choices now facing New England are likely in California as well.

Beginning 13 years ago, CalPERS invested heavily in real estate at the height of the housing bubble. From 2003 to 2006, the pension fund committed $46 billion to real estate investments, including ambitious projects in New York City and Sacramento that eventually went haywire. The result: In the year ending Sept. 30, 2009, CalPERS lost a stunning 49 percent of the value of its real estate portfolio. A November story in the Los Angeles Times depicted the nation’s largest pension system as only now digging its way out its disastrous investment choices in real estate.

Last week, CalPERS announced it would buy up to a 25 percent ownership stake in the 550-megawatt Desert Sunlight solar project near Joshua Tree National Park in eastern Riverside County, which was until recently the world’s largest solar plant.

CalPERS did so despite taking a bath on its clean energy investments in the 2014-15 fiscal year. However, analysts said that year was an outlier because of the abundance of cheap oil distorting energy markets. Meanwhile, there are many reasons investors are attracted to major solar projects, starting with the fact that state laws require utilities to buy steadily more renewable energy and that solar power technology used in large projects steadily grows more advanced.

Utility think tank warns of ‘potential obsolescence’

But the downside is that making such investments amounts to betting that the status quo of electricity distribution won’t change much in coming years. Among those who question that premise are those with the most to lose from a change in the status quo: the nation’s utility companies. As solar power technology steadily grows more advanced on a small-scale as well as an industrial scale, the huge surge in solar panels on homes and businesses has led a think tank financed by energy utilities to question to issue a harsh warning:

If demand for residential solar continues 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’s from a Washington Post story last year headlined “Utilities wage campaign against rooftop solar.”

A September report in Forbes magazine included an interview with John Berger, CEO of Houston-based solar company Sunnova, who said utilities have plenty to worry about. “Residential solar has already become conventional energy,” Berger told Forbes. “The future will be baseload natural gas and residential solar. The coming solar boom will be just as big and important as the shale gas boom.”

Meanwhile, at least eight battery technologies offer the promise of storing solar power by day for use at night — the biggest obstacle to rooftop power largely supplanting the conventional electricity grid.

CalPERS’ investment in the Riverside County project may look safe now. But in coming years, it may look like a “solar bubble” mistake as small-scale solar takes off.

Heated argument

At the regulatory level, Sacramento has made a substantial investment of time and energy in a long-term plan to use California’s southern desert as a hotbed of solar power. Earlier this month, working with state Secretary for Natural Resources John Laird, U.S. Secretary of the Interior Sally Jewel released the Desert Renewable Energy Conservation Plan’s Final Environmental Impact Statement. The document “outlines a 25-year blueprint for the development and management of 10 million acres of federal public lands in the California desert, currently managed by the Bureau of Land Management,” according to CleanTechnica. Envisioned as “part of a much larger and more comprehensive effort to develop a total of 22 million acres in California’s desert,” the site added, advocates claimed the plan could contribute to the production of some 20,000 megawatts of alternative energy, meeting federal and state benchmarks “through to 2040.”

But solar development in desert communities has not met with universal acclaim. “California’s rooftop solar industry is at war with the state’s major utilities over a program known as net metering, which determines how much money solar customers are paid for the electricity they generate,” as the Desert Sun explained. “Utility companies want to slash those payments and charge solar customers special monthly fees, while solar companies want things to stay the way they are, at least for the next few years. The public utilities commission is expected to make a decision next month.”

Pricing problems

The conflict has drawn in consumer groups, which agree with the utilities that solar customers aren’t being charged enough “to keep the electric grid running. As a result, they say, non-solar customers are increasingly shouldering the burden of higher rates. That claim is partly supported by independent research, although most academic experts say many more people need to go solar before the ‘cost shift’ becomes a serious problem,” the Sun noted. Ironically, however, solar industry advocates have insisted that rates should be kept low enough to encourage large numbers of people to consider the switch to solar.

In casting blame, advocates have pointed the finger at Sacramento. “The California Legislature has raised the cap on net metering several times,” said Brad Heavner, policy director at influential solar energy association CALSEIA, in an interview with CleanTechnica. The CPUC, he explained, was recently directed by lawmakers to consider “whether the net metering structure needs to be changed before removing the cap altogether” — set at 5 percent of combined peak demand among customers. “So the timing is somewhat arbitrary and is potentially disastrous because it coincides with the scheduled changes to the federal Investment Tax Credit.” Analysts like Heavner worry that if California solar customers lose tax credits while having their rates raised, the critical mass of users the solar industry needs will swiftly dissipate.

Unintended consequences

In an added twist, the same regulations responsible for utility ratepayers bearing a disproportionate share of costs have excluded solar owners from clean-energy subsidies that utilities and some developers have cashed in on. “If a home or business has a rooftop solar system, most of the wattage isn’t included in the ambitious requirement to generate half of the state’s electricity from renewable sources such as solar and wind by 2030, part of legislation signed in October by Gov. Jerry Brown,” as the Los Angeles Times observed. “That means rooftop solar owners are missing out on a potentially lucrative subsidy that is paid to utilities and developers of big power projects. It also means that utility ratepayers could end up overpaying for clean electricity to meet the state’s benchmark because lawmakers, by excluding rooftop solar, left out the source of more than a third of the state’s solar power.”

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.

Roughly 1,000 miles away in Wyoming, the developers of what would be the nation’s largest on-shore wind farm quickly caught word of the proposal.

 

California has long represented the holy grail for the Power Company of Wyoming, the Anschutz Corp. subsidiary that has proposed building the 3,000 megawatt Chokecherry Sierra Madre wind farm in Carbon County.

 

California [already had] a mandate that requires 33 percent of its power come from renewable sources by 2020. And with almost 39 million residents in need of electricity, that represents a potentially hefty sum of green electrons.

 

The problem for wind developers in Wyoming, is Brown and other California policymakers have insisted the Golden State meet its 33 percent mark with power generated from inside the state. California is projected to reach its 2020 benchmark on time.

 

But Brown’s inaugural address left many wondering if the four-term governor was coming around to the idea of out-of-state renewables.

 

“They’ve always said if they raised their renewable portfolio, Wyoming would have a place in that new demand,” said Loyd Drain, the executive director of the Wyoming Infrastructure Authority.

 

Drain has spent the last five years lobbying California policymakers on the virtues of Wyoming wind.

 

“They’re going to look to us, I do believe,” he said.

Wind patterns in two states are opposite

Wyoming’s interest in supplying California is backed up by a pioneering study that looks at wind patterns, an important factor, given the great concern about renewable energy being erratic and unreliable as a 24/7/365 source of power.

A new University of Wyoming study further demonstrates that combining the strengths of Wyoming wind with California wind and solar will reduce the intermittency of renewable energy and smooth the power supply — leading to benefits for utilities and energy consumers alike.

 

It turns out that Wyoming’s and California’s wind patterns are rather opposite, and that means that they’re complimentary. When one is active, the other isn’t. Based on a yearly average, California wind is strongest at night, while Wyoming wind is strongest during the day and peaks in the afternoon — coincident with the time when the sun is beginning to set while the electric load is still increasing into the evening hours.

 

“Although the benefits of geographic diversity to renewable energy have been suggested for some time, only recently have there been attempts to quantify these benefits,” says the study’s author, Jonathan Naughton, a UW professor of mechanical engineering and director of the Wind Energy Research Center. “The renewable energy quality metrics proposed in this study are a start at being able to characterize different combinations of renewable energy sources. The result of applying these metrics to energy produced from Wyoming wind and California renewables provides a quite compelling case for geographic diversity.”

But whether this intriguing study and Wyoming’s strong interest will translate into the state becoming a California energy supplier is very much up in the air. Solar power is expanding so quickly in California that utilities are making what appear to be barely disguised attempts to make it a less attractive option for homeowners and businesses considering installing solar panels, as the San Francisco Chronicle reported Thursday. If solar panels keep coming down in price, Wyoming officials’ assumption that their wind power supplies would be attractive to California on cost grounds appears shaky.

However, California’s emphasis on switching to renewable power — and the little-known fact that it is home to The Geysers, the world’s largest geothermal power complex, 70 miles north of San Francisco — has officials in Imperial County hopeful that developing their region’s vast geothermal resource can be part of a larger overall plan to rescue the dying Salton Sea and improve the impoverished local economy.

Last year, working with the Imperial Irrigation District, state Sen. Ben Hueso, a Democrat from San Diego whose district includes all of Imperial County, and Assemblyman V. Manuel Pérez, D-Coachella, won Senate passage of SB 1139 before pulling the bill from Assembly consideration in September. This is from the Desert Sun’s account:

SB 1139 … would require utilities to buy 500 megawatts of electricity from new geothermal plants by 2024 … . While the bill wouldn’t have required that any geothermal power come from the Salton Sea specifically, it’s likely that developers would have jumped to take advantage of the sea’s huge untapped energy potential.

 

IID has estimated that geothermal and other green technology development at the Salton Sea could generate more than $4 billion over 30 years, with much of that money going toward restoring the receding body of water. Ramping up geothermal development would also create thousands of jobs in Imperial County, which has a 22 percent unemployment rate — the highest in the state.

 

It’s unclear why [Hueso and Pérez] decided not to bring the bill to a vote in the Assembly, following its 21-11 passage in the Senate earlier this year. Hueso’s office had indicated last month it was only a matter of time before the bill came up for a vote in the Assembly, but it’s possible he simply didn’t have enough votes to secure its passage.

Imperial still committed to grand plans

As saltonseasense.com noted in June, quoting official reports, the Imperial Irrigation District remains committed “to build up to 1,700 MW of geothermal power by the early 2030s at the Salton Sea.”

But it’s no longer clear if there is much legislative support for an SB 1139-type approach mandating geothermal development. Officials with the state’s three giant investor-owned utilities have never been big fans of geothermal as a major source of state power. Energy experts say there’s a reason that there’s no billionaire enthusiast pushing geothermal, as T. Boone Pickens has done with wind power and several tycoons have done with solar power. It’s because a deep dig into the facts — by scientists as well as potential investors — shows it’s not an attractive option.

Tom Murphy, an associate professor of physics at the University of California-San Diego, explains why on his “Do the Math” blog:

The energy derived is mostly useful for heat, being inefficient at producing electricity. It won’t fly our planes or drive our cars. And it’s buried under kilometers of solid rock, making it very difficult to access. Each borehole only makes available the heat in its immediate surroundings — unlike drilling for oil or natural gas, where a single hole may access a large underground deposit.

 

So my guess is that we’ll burn every tree and fossil fuel on the planet before we start drilling through ordinary rock to stay warm. In other words, there is little incentive to dig deep for heat. By the time we run out of the easier resources —having burned every scrap of wood not bolted down — are we going to be left in a state to drill through rock at a massive scale?  ….

 

In short, even though the thermal energy sitting under our feet is enormous in magnitude, it does not strike me as a lucky find. No one is racing to dig in.  Perhaps it is simpler to say that it’s economically excluded, at present.

The 10 small geothermal plants now operating in Imperial County are seen as a promising symbol of what the poor farming region might become. But the reality seems much more likely to be that geothermal energy — on a large scale, at least — never amounts to much in a California that’s now rushing to invent its alternative-energy future.

Instead, those plants could someday be seen as a symbol of the folly of local politicians and bureaucrats talking themselves into believing that they could treat geothermal energy production as if it were a type of pork that could be legislated into existence.

(Photo by Joe Raedle/Getty Images)

A strong majority of Californians say they support tougher limits on greenhouse gas emissions and more ambitious renewable energy goals to combat climate change, according to a statewide poll released late Wednesday.

Meanwhile, nearly two-thirds of those surveyed said global warming is contributing to California’s ongoing drought. About half said global warming is a “very serious” threat to the state’s future, according to the poll, conducted by the Public Policy Institute of California, a San Francisco-based nonpartisan research center.

“At a time when many Californians are making a connection between the current drought and climate change, there is strong support for expanding the state’s efforts to reduce greenhouse gas emissions,” said Mark Baldassare, the institute’s president, in a news release.

Results of the survey — titled Californians & the environment — are based on phone interviews with 1,702 California adult residents from in July.

Of those who took part, 44 percent said they were registered Democrats; 28 percent were Republicans; and 24 percent independents or decline-to-state voters, according to the institute.

Sixty-four percent of respondents said they believe there’s a connection between the drought and global warming, while 28 percent said they saw no link.

Spray irrigation on a field in the Imperial Valley in southern California. This type of irrigation is more efficient than flood irrigation that is popular in this region. Still, in the high temperatures of this desert region a lot of the water evaporates, leaving the salts, that are dissolved in the Colorado River water that is used, on the soil.

The institute has not asked that question in the past, said PPIC spokeswoman Linda Strean.

California is mired in its fourth straight year of severe drought. While not going so far as to say climate change has caused the drought, recent scientific studies have said global warming exacerbates the extreme high pressure systems that block rainfall in the Western United States.

PPIC’s past surveys have found strong support for reducing greenhouse gas emissions, including majorities across party lines a decade ago who favored California’s landmark emissions reduction law, AB32. That law requires the state to cut greenhouse gas emissions to 1990 levels by 2020.

It was signed into law in 2006 by Republican Gov. Arnold Schwarzenegger.

“A strong partisan divide has opened up since then,” the institute observed in its release.

Now, 79 percent of Democrats and 74 percent of independents favor the law compared with 46 percent of Republicans, the institute said.

The poll also found that large majorities of Californians favor new, more aggressive goals for combating climate change.

Eighty-two percent of those polled said they support a proposal to require half of California’s electricity come from renewable sources by 2030. And 73 percent favor cutting petroleum use in vehicles by 50 percent.

Those are key pieces of Senate Bill 350, a bill introduced earlier this year by Senate leader Kevin de Léon.

Other findings from the PPIC survey include:

• 88 percent of adults favor building more solar power stations in California.
• 78 percent want to boost tax credits and other incentives for rooftop solar panels.
• 49 percent favor building the Keystone XL pipeline, while 38 percent are opposed.
• 56 percent oppose increased use of fracking to extract oil and natural gas. It’s the highest level of opposition since PPIC started asking about it in 2013.
• 53 percent approve of Gov. Jerry Brown’s job performance, while 47 percent approve of the way he handles environmental issues.
• 39 percent approve of the California Legislature’s job performance.
• 57 percent approve of President Barack Obama’s job performance.
• 29 percent approve of Congress’ performance.

Contact reporter Chris Nichols at chris@calwatchdog.com or on Twitter @ChrisTheJourno

“Buildings built in California starting in 2016 will have to comply with the nation’s toughest energy conservation standards,” the Central Valley Business Times reported. “The California Energy Commission has unanimously approved building energy efficiency standards that it says will reduce energy costs, save consumers money, and increase comfort in new and upgraded homes and other buildings.”

In single-family homes, that would amount to a drop in energy use by almost a third, relative to 2013 standards, the CVBT noted.

Cost and consequences

The New Residential Zero Net Energy Action Plan, as it has been dubbed, aimed “to establish a robust and self-sustaining market so that all new homes are zero net energy (ZNE) beginning in 2020.” Critics have reiterated longstanding objections to a statewide push of this kind, especially around the prospect of rising energy costs.

“The most complex issue will be valuing the homes, which will cost more upfront,” according to Greentech Media. “Currently, the CPUC is quoting an extra $2 to $8 per square foot after incentives. There will likely need to be incentives or creative utility billing, especially if the homes are providing demand-side services as the CPUC envisions. The CPUC says that the utilities are on board and will have to evaluate locational benefits of having net-zero homes on the system.”

As Greentech Media noted, planners have built in some would-be loopholes designed to make progress on ZNE without imposing the new standards too quickly: “Homes can be ZNE-ready, rather than actually being energy-neutral. That could mean they are solar-ready, for instance, but perhaps don’t have solar panels already installed.”

But even supporters of the plan have cautioned that executing on its goals may be a daunting challenge. At the Huffington Post, one analyst noted, “as California’s clean power goals rise, new capacity could begin to slow.”

“Some planned large projects are now on hold due to financial problems. Others face environmental challenges, such as threats to bird flyways and desert habitats. Large-scale solar plants, particularly those using solar thermal technology, are losing appeal to investors as photovoltaic panel prices plunge. And utilities, having largely reached their current renewable procurement targets, have few new projects in the pipeline. What’s more, the federal solar investment tax credit program for new utility projects drops from 30 percent to 10 percent after 2016, and ends completely for individuals.”

Unifying the grid

Nevertheless, optimism among policymakers and activists has remained high — largely because of the role of technological innovation centered in California. Apple and Google have embarked on so-called “grid-scale” renewable energy projects, while Tesla has pushed into the home energy storage business.

But some experts have implied that the problem of rising energy costs could best be addressed by linking up the net-zero energy industry with the zero-emission automobile industry. “A recent California study estimated that utility companies could earn $2.26 to $8.11 billion in net revenues from large-scale commercialization of EVs,” as reported in Fortune. “This is sufficient to allow utilities to invest both in installing charging infrastructure and return some of the revenues to their customers in the form of lower rates.”

By supplying ubiquitous EV charging stations, observers surmised, utilities could eventually recoup electrical power from cars embedded into the same flexible grid as homes. “The value of having a flexible load on the grid will grow even further with higher amounts of wind and solar,” Fortune continued. “Electric vehicles can be programmed to charge during peak solar or wind generation periods, preventing this valuable electricity from being wasted. In the future, electric vehicles could increase their value by putting electricity back into the grid as well[.]”

Dueling schemes

“Under the current rules, homes served by Southern California Edison pay higher prices for higher electricity use. That would still be true under the new rules, but the pricing differences wouldn’t be nearly as stark, with costs rising for those who use the least and falling for those who use the most,” the Desert Sun reported. “The new rules would also mandate a minimum bill for all residential consumers, set at $5 for some low-income customers and $10 for everyone else.”

The proposed pricing system resulted from a prolonged research effort. Both the PUC and the utilities that would be affected by the change quickly moved to rebut criticism. “Utilities have framed the proposed changes as a matter of fairness, arguing that above-average energy users are currently subsidizing below-average energy users,” the Sun noted. “High-end users, the thinking goes, are paying more than their fair share to maintain the electric grid, while low-end users are paying less than their fair share.”

The PUC will have to keep working if it wishes to reach a unanimous consensus on its own proposal, however. One commissioner, Mike Florio, has put forth a much different plan, backed by the alternate energy and environmental advocacy groups that dismissed the PUC plan.

“I’m concerned the tier flattening of the Proposed Decision shifts too many costs from high-usage to low-usage customers,” Florio said in a statement. “Low-usage customers typically have fewer means of conserving; their consumption is already limited to basic needs.”

Activists were cautiously optimistic that Florio could have an outsized influence, perhaps nudging the PUC to consider making revisions to the dominant plan. As Utility Reform Network staff attorney Matthew Freedman told the Sun earlier this month, “I’d like to say there was an audible gasp from the utilities, but there was not. From our perspective, it’s very encouraging to see that there’s an alternate on the table.”

Golden Staters worried about their fate will be kept in suspense for at least another month. “The California Public Utilities Commission will consider both options and a decision is not expected until the agency’s June 25 meeting at the earliest,” according to the San Gabriel Valley Tribune.

Opening greener markets

The debate has played out over a high-profile spike in energy technology — a marked turnaround from the days of Solyndra’s bad PR and ultimate failure. For that, California has owed Elon Musk, the serial entrepreneur who recently unveiled Tesla’s new “Powerwall” home battery units.

Nevertheless, as the Wall Street Journal observed, the market for home batteries hasn’t expanded quickly. “Even Mr. Musk concedes the battery doesn’t make much economic sense right now for individual homeowners; grid power is still cheaper than solar-battery combinations. But a trend toward sharply higher electricity prices may change that,” the Journal noted. “The cost of traditional grid power is rising, while solar power costs are plunging.”

In his book on successful ventures, Musk’s fellow superstar entrepreneur Peter Thiel has argued that startups should seek monopolies in areas where robust, competitive markets do not yet exist.

Faced with the proposed changes to California electrical rates, environmentalists have claimed that electricity providers are jacking up rates to head off big losses to cheaper solar. “Monopoly utilities nationwide are struggling to respond to competition from solar companies,” argued the Sierra Club’s Evan Gillespie in the Los Angeles Times. “Instead of adapting their business model to the 21st century, utilities have launched a lobbying campaign to convince the public and the PUC alike that these changes are in everyone’s interest.”