National

Earlier this month, the California Energy Commission mandated that all newly constructed low-rise residential buildings must include solar power. 

Why it matters: While California prides itself on its leadership on climate change and innovative energy technology adoption, this decision is likely to misfire. Forcing people to install solar panels may actually exacerbate grid problems, creating negative secondary impacts without meaningfully greening the electricity system.

Most experts agree that the electricity grid will become more decentralized, with generation coming increasingly from customer-sited equipment. But even Elon Musk, a vocal proponent of solar roofs, believes that ultimately the grid will still get two-thirds of its supply from large, central generating plants, in part because electricity is much cheaper to produce at scale. Rooftop solar, given its cost disadvantages and small market share, is not the most cost-effective avenue to greening our electricity supply.  

In fact, in California, there is a mounting problem of too much solar during the sunniest parts of the day, which cannot then meet the system's demands when the sun goes down, barring expensive storage solutions. This means that the value of solar energy produced by these panels will actually decline as more are installed. 

Some experts also warn that the mandate will increase housing costs at a time when prices are beyond the reach of many lower-income people. It would be cheaper for homeowners, and more cost-effective overall, to focus on solutions to current problems, including well-placed storage that addresses the challenge of after-dusk solar supply.

The bottom line: The California Energy Commission has made a mistake. It makes sense to require new homes to be energy efficient and solar-ready, but California's climate goals would have been better served in this case by more informed regulation.

Ron Dizy is managing director of the Advanced Energy Centre at MaRS.

How California's residential solar mandate could misfire

Rooftop solar is likely not the best way to green the electricity supply.

Workers install solar panels on the roofs of homes under construction south of Corona Thursday morning May 3, 2018. 

Workers install solar panels on homes in Corona, California. Photo: Will Lester/Inland Valley Daily Bulletin via Getty Images

Energy

California

Expert Voices

Politics

Earlier this month, the California Energy Commission mandated that all newly constructed low-rise residential buildings <a class="gtmContentClick" data-vars-link-text="must include solar power" data-vars-click-url="https://www.nytimes.com/2018/05/09/business/energy-environment/california-solar-power.html" data-vars-content-id="8157871b-e5da-4d8c-8e71-e9bdfc6c3ddf" data-vars-headline="How California&#x27;s residential solar mandate could misfire" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.nytimes.com/2018/05/09/business/energy-environment/california-solar-power.html" target="_blank">must include solar power</a>. Why it matters: While California prides itself on its leadership on climate change and innovative energy technology adoption, this decision is likely to misfire. Forcing people to install solar panels may actually exacerbate grid problems, creating negative secondary impacts without meaningfully greening the electricity system.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

Last month, Governor Jerry Brown flew to Toronto to bolster support for the 2017 California–Canada cap-and-trade alliance. At home, though, Brown has faced  criticism for pursuing market-based policies to reduce fossil-fuel consumption, rather than calling for a state-wide freeze on new drilling.

Why it matters: The California debate illustrates a larger conflict within the environmental movement: Many insist upon the most aggressive climate change policies, but for both electoral and economic reasons, climate change can't be addressed solely by government fiat. To drive change at scale, the government must also engage market forces to create better and cheaper alternative energy sources, cars, homes, buildings and transportation systems.

Regionally banning a globally traded product like fossil fuel is not good political strategy or economics: Consumers would simply buy fuel from outside the state, effectively penalizing California businesses without reducing greenhouse gas emissions.

Markets can often guide climate-friendly solutions, especially when business incentives align with environmental ones. For example, coal-generated electricity is declining precipitously in the U.S. — not because of a ban, but because it’s become more expensive than other energy sources. Likewise, the city of Shenzhen, China, recently converted all of its 16,000 buses to electric power, which reduces both air pollution and operating costs.

The bottom line: Using carbon cap-and-trade revenue to support green technology innovation and pilots and removing legal and structural barriers to clean-technology adoption are both strong pro-climate alternatives to fossil fuel bans. Jurisdictions that instate such policies would be rewarded with jobs and economic development as well.

California cap-and-trade shows the value of diverse climate solutions

It's a market-friendly approach that scales well.

US Governor of California, Jerry Brown speaks at the launch event at the US climate action center on November 11, 2017 during the COP23 United Nations Climate Change Conference.

Governor of California Jerry Brown speaks during the COP23 UN Climate Change Conference in Germany on November 11, 2017. Photo: Patrik Stollarz/AFP via Getty Images

Climate change policy

Climate change

Last month, Governor Jerry Brown flew to Toronto to bolster support for the 2017 California–Canada cap-and-trade <a class="gtmContentClick" data-vars-link-text="alliance" data-vars-click-url="https://www.arb.ca.gov/cc/capandtrade/linkage/2017_linkage_agreement_ca-qc-on.pdf" data-vars-content-id="9ee3b7a8-028a-4cd7-983f-4cb89fe37e23" data-vars-headline="California cap-and-trade shows the value of diverse climate solutions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.arb.ca.gov/cc/capandtrade/linkage/2017_linkage_agreement_ca-qc-on.pdf" target="_blank">alliance</a>. At home, though, Brown has <a class="gtmContentClick" data-vars-link-text="faced criticism" data-vars-click-url="https://www.vcstar.com/story/news/2018/04/14/activists-call-jerry-brown-halt-california-drilling/509801002/" data-vars-content-id="9ee3b7a8-028a-4cd7-983f-4cb89fe37e23" data-vars-headline="California cap-and-trade shows the value of diverse climate solutions" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.vcstar.com/story/news/2018/04/14/activists-call-jerry-brown-halt-california-drilling/509801002/" target="_blank">faced criticism</a> for pursuing market-based policies to reduce fossil-fuel consumption, rather than calling for a state-wide freeze on new drilling.Why it matters: The California debate illustrates a larger conflict within the environmental movement: Many insist upon the most aggressive climate change policies, but for both electoral and economic reasons, climate change can&#x27;t be addressed solely by government fiat. To drive change at scale, the government must also engage market forces to create better and cheaper alternative energy sources, cars, homes, buildings and transportation systems.

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Ron Dizy

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How California's residential solar mandate could misfire

California cap-and-trade shows the value of diverse climate solutions