Solar Rooftops Can Save Californian Grid & Residents $1.4 Billion Annually

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Solar rooftops could go a long way to strengthening California’s aging power grid, and save its residents more than $1.4 billion annually.

These are the conclusions from a new white paper published by SolarCity’s Grid Engineering team, which describes in detail how distributed energy resources such as rooftop solar, batteries, and advanced inverters, could offer “a superior economic alternative to today’s centralized grid design.” The white paper, A Pathway to the Distributed Grid (PDF), aims to evaluate “the economics of distributed energy resources” and outline “a pathway to capturing their potential value.”

Credit: SunPowerAs the authors of the report note, “Designing the electric grid for the 21st century is one of today’s most important and exciting challenges,” with challenges including the need to evaluate “ways to both modernize the aging grid and decarbonize our electricity supply, while also enabling customer choice, increasing resiliency and reliability, and improving public safety, all at an affordable cost.”

In other words, there’s a lot to do.

Part of the solution, therefore, could be, and maybe should be increasing our reliance upon existing technologies like the aforementioned solar and batteries. The authors of the report calculated that if California and its utility sector was to switch to distributed resources like rooftop solar, the state would see net societal benefits in excess of $1.4 billion annually — and that’s for solar customers and non-solar users alike. Some of those $1.4 billion worth of benefits include improved flexibility in grid planning and operations, increased affordability and consumer choice, and improved grid reliability and efficiency.

In addition to continuing to decrease dependency on fossil fuels.

Over $1.4 Billion per Year in Net Societal Benefits from DERs by 2020


Unsurprisingly, however, the existing regulatory landscape is not conducive to a pathway that involves transitioning to distributed energy resources. Currently, there is no incentive for utilities to make a shift away from their current financially beneficial methods. For rooftop solar to begin affecting the industry for the better, regulators must provide utilities with the incentives to see why transitioning to distributed energy resources could be a better method for everyone involved — especially the consumer.

The authors of the white paper recommended several “next steps” for industry stakeholders to help modernize the grid:

  1. Future regulatory proceedings and policy venues related to capturing the benefits of DERs should incorporate the expanded benefit and cost categories identified in this paper.
  2. Regulators should look for near-term opportunities to modernize the utility incentive model, either for all utility earnings or at a minimum for demonstration projects, to eliminate the bias toward utility-owned investments.
  3. Regulators should require utilities to modernize their planning processes to integrate and leverage distributed energy resources, utilizing the integrated distribution planning process identified in this paper.
  4. Regulators should require utilities to categorize all planned distribution investments in terms of the underlying grid need. Utilities should make data available electronically to industry, ideally in a machine-readable format.

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Joshua S Hill

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6 thoughts on “Solar Rooftops Can Save Californian Grid & Residents $1.4 Billion Annually

  • Tax rebates and state subsidies for batteries should instantly drop the price by 50%. Now you are making some sense in California with those high time of use kwh. If storage can hit 5cents kwh as an addition to your PV at 10 cents kwh then who can complain at 15 cents kwh combined. Especially against rates of 40cents kwh for peak times in some areas.

    • Are you talking about some existing rebate/subsidy and rates (if so, some references would be welcome), or are you again just day-dreaming?

  • The claims are quite plausible, but SolarCity is an interested party. What do independent experts think?

  • I have said it often, and I will keep repeating it because it is such an important message*. The only sure way for utilities to stop sabotaging distributed power and renewable power that they do not own is to split the utilities up. Only the grid should remain in the hands of the utility. Production and retail should be left to the free market, but of course with strict limits on polluting emissions and a carbon tax.

    *It worked for Cato** the Elder, so what the heck.
    **Not to be confused with the evil Cato institute

    • Absolutely. Monopolies only where necessary.

  • If rooftop solar would save $1.4B, then how much more would solar farms – which cost a lot less per output watt, save Californians?

    Funny how it’s the people who make money selling rooftop PV who keep telling us (out of their advertising budgets) how much money it can save us , but who speaks for larger-scale projects?

    Why do rooftop PV ad pitches remind me so much of car dealerships touting a “low LOW LOWER monthly payment !! “?

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