Are Poor Customers Subsidizing Solar Panels For Wealthier Ones?

Lucrative for homeowners and industrial customers who can afford them, solar panels are not without their own issues. The equity issue - whereby the claim is made that poorer customers subsidize the utility costs of wealthier ones, is investigated.

2 minute read

June 7, 2012, 10:00 AM PDT

By Irvin Dawid


Giving utility users credit for the electricity their solar panels produce, a program known as "net metering", is critical for expansion of the solar industry, especially solar panel installers. Diane Cardwell interviews delighted homeowners and school district officials who are seeing their investments pay off, and unhappy utility officials who claim that their costs are increasing as more customers turn toward solar.

As more customers install solar panels and have their electricity bills reduced by the power the utilities are required to purchase, "the utilities not only lose valuable customers that help support the costs of the power grid but also have to pay them for the power they generate. Ultimately, the utilities say, the combination will lead to higher rate increases for everyone left on the traditional electric system."

"Low-income customers can't put on solar panels - let's be blunt," said David K. Owens, executive vice president of the Edison Electric Institute, which represents utilities. "So why should a low-income customer have their rates go up for the benefit of someone who puts on a solar panel and wants to be credited the retail rate?"

The equity issue became more important after the "CA Public Utilities Commission decided last month to effectively double the amount of solar power capacity eligible for net metering."

Representing residential utility consumers, a lawyer for the Utility Reform Network suggested a position that could please both utilities and solar power advocates.

"The goal of net metering should not be to give the shortest possible payback period; we're not trying to shower people with free money," said Matthew Freedman. "We want to make it a reasonable investment while protecting the interests of all the other customers on the system who have to pay for it."

Tuesday, June 5, 2012 in The New York Times - Business Day

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Close-up of "Apartment for rent" sign in red text on black background in front of blurred building

Trump Administration Could Effectively End Housing Voucher Program

Federal officials are eyeing major cuts to the Section 8 program that helps millions of low-income households pay rent.

April 21, 2025 - Housing Wire

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

April 30, 2025 - Diana Ionescu

Close-up on Canadian flag with Canada Parliament building blurred in background.

Canada vs. Kamala: Whose Liberal Housing Platform Comes Out on Top?

As Canada votes for a new Prime Minister, what can America learn from the leading liberal candidate of its neighbor to the north?

April 28, 2025 - Benjamin Schneider

Washington

Washington State’s Parking Reform Law Could Unlock ‘Countless’ Acres for New Housing

A law that limits how much parking cities can require for residential amd commercial developments could lead to a construction boom.

7 hours ago - Streetsblog USA

Bluebird sitting on branch of green bush.

Wildlife Rebounds After the Eaton Fire

Following the devastation of the Eaton Fire, the return of wildlife and the regrowth of native plants are offering powerful signs of resilience and renewal.

May 1 - AP News

1984 Olympics

LA to Replace Inglewood Light Rail Project With Bus Shuttles

LA Metro says the change is in response to community engagement and that the new design will be ready before the 2028 Olympic Games.

May 1 - Newsweek

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.