2023 Will be a Transition Year for Solar and Storage in California.

By: Barry Cinnamon, CEO of Cinnamon Energy Systems

2023 will be a transition year for solar and storage in California.?

The end of NEM is nigh. Actually, April 14, 2023. Paybacks for rooftop solar will double, cutting the demand for solar in half (or more). Last minute demand for rooftop solar is the highest I have ever experienced.

Batteries will be standard equipment for most new solar systems after net metering ends— as they are in Hawaii. But it’s not an easy transition for a solar installer to start installing batteries. There is much more electrical and system configuration work required for batteries.

The “cost shift” rationale for PG&E ending net metering — low and middle income people cannot afford solar — is patently false. What’s worse is that low and middle income customers will have even a harder time affording solar since they will be required to add a battery.

PG&E electric rates will continue to increase at 10% per year through the end of the decade (rates have gone up 14% in each of the last two years).?Bizarrely, the California government allows utilities to lock in 10-12% profits while at the same time taking away the ability for homes and businesses to achieve a reasonable payback on their solar systems. Not to mention the wildfires and blackouts that result when utilities defer system maintenance so that they earn higher profits.

EVs will steadily replace gas vehicles, but there will be a growing pushback from EV owners due to the high costs of EV charging. Home EV charging is the most affordable. Charging at work is expensive. And public charging stations — which are the only option for travelers and apartment dwellers — are the most expensive. When I charged up my car last week at a Level 3 charging station, it cost $0.54/kwh (charging from home solar is less than $0.10/kwh). That works out to $0.20/mile in my EV. My old car averaged 25 mpg, so at $3.5/gallon of gas, my costs were $0.14/mile.

On a national level, incentives in the Inflation Reduction Act will turbocharge demand for building electrification and EVs. It makes all the sense in the world to substitute clean solar and wind electricity for polluting fossil fuels — as long as the cost for this clean electricity is less than gas and oil. California is doing the right thing with EVs and electrification but absolutely the wrong thing by making solar less affordable.