Shift Key with Robinson Meyer Shift Key Classic: California’s Rooftop Solar Question
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Dec 31, 2025 Severin Borenstein, an economist and director at UC Berkeley's Energy Institute, delves into the high costs of rooftop solar in America and its impact on low- and middle-income Californians. He reveals how net metering shifts nearly $4 billion onto non-solar households, challenging the fairness of electricity pricing. The discussion also touches on equity issues related to electrification, the historical shift in energy pricing, and the potential benefits of public ownership in utilities. It's a deep dive into the complex landscape of energy economics.
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Marginal Cost Of Electricity Is Much Lower
- The true incremental cost of an extra kilowatt-hour is roughly 5–10 cents, far below many retail prices.
- Much of what customers pay is fixed system or public-policy costs that do not drop when households self-generate.
High Rates Undermine Electrification
- Overpriced electricity discourages electrification of cars and heating, undermining decarbonization goals.
- Simultaneously, fossil fuels like gasoline remain underpriced, further biasing choices away from electrification.
Use Income-Based Fixed Charges Carefully
- Replace volumetric taxes with progressive fixed charges or income‑based contributions to avoid penalizing electrification.
- Design fixed charges carefully to protect low-income households and avoid regressive outcomes.