Demand for rooftop solar systems dries up in California after subsidies drop. 100 contractors go out of business. Fancy that.

California Home-Solar Boom Collapses

The Wall Street Journal reports The Home-Solar Boom Gets a ‘Gut Punch’

The amount of solar power U.S. homeowners install could shrink 13% this year, as forecast by the trade group Solar Energy Industries Association and consulting firm Wood Mackenzie. More than a hundred solar contractors have already gone out of business during the past year as demand dried up, according to data tracked by Solar Insure, a company that monitors residential solar installations and helps fix problems.

The state has installed so many panels that it has a glut of solar power during the day. Last year, California implemented new rules that cut the amount of compensation most rooftop solar owners get for the electricity they send to the grid by 75% or more to manage the oversupply and soaring costs for upgrading the grid. 

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“It was like getting a gut punch,” says Carlos Beccar, marketing director of Fresno-based Energy Concepts, a solar installer that had to lay off more than half its 75 employees after sales plummeted as much as 90% following the new rules.

California’s solar growth is outpacing the ability of its grid to handle it. The state already supplies more than a third of its power with renewables, and it plans to raise that ratio to 60% by 2030. But because the state’s grid can’t absorb all the solar power generated during the day, it ends up throwing increasing amounts of it away or curtailing it.

Quote of the Day

When David Phippen, a third-generation almond grower in central California, first installed solar panels in 2009 to help power equipment on his farm, he recalls thinking it was “the best thing since canned beer.”

Under the old solar-compensation rules, the economics worked out. But now that those payments will be slashed, adding more solar no longer makes sense, says Phippen—even though he has more equipment and bigger electricity needs.

“We’re done with our green march,” he says.

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Rooftop Solar Synopsis

California created a boom by offering homeowners a chance to sell energy back to the grid at unsustainable rates.

This year utility companies then slashed what they pay to customers by 75 percent or more.

The payback time for these systems no longer makes any sense. More accurately, if you have to subsidize something, it is not economically feasible in the first place; it just looks like it.

The boom then imploded.

Electricity Rates

Chart courtesy of EnergyBot.

It’s going to be interesting to see what California does at night and what electricity costs when the state achieves its 60 percent solar power goal.

It’s possible that electricity prices rise so much that residents will be forced to put in their own systems and buy an expensive battery storage system on top of it to escape the PG&E power costs.

How the Inflation Reduction Act Failed to Reduced Electricity Costs in Pictures

Let’s check in on the not exactly impressive energy and inflation results of Biden’s Inflation Reduction Act (IRA).

In case you missed it, please consider How the Inflation Reduction Act Failed to Reduced Electricity Costs in Pictures

Biden’s energy policy has been an inflationary disaster. And make no mistake, the IRA was nothing but energy policy, more precisely, climate policy.

Biden Promotes Climate Change at the Expense of More Global Poverty

Internationally, please note Biden Promotes Climate Change at the Expense of More Global Poverty

The mad rush to deal with climate change, even if it works (it won’t), has a nasty tradeoff (more global poverty).

And returning to la-la land, please note California Restaurants Cut Jobs as Fast-Food Wages Set to Rise