Commentary on Energy Institute Blog Post
By: Jenny Folkesson, Phd, Data Scientist
This article offers commentary on Severin Borenstein’s blog post titled “Guess What Didn’t Kill Rooftop Solar”.
Borenstein is a leading voice in the cost-shift debate, which claims that customers with rooftop solar are shifting costs onto other customers, and admits that other parties such as CPUC commissioners and Cal Advocates (the consumer protection group within the CPUC) reach similar conclusions by extension. Although Borenstein has admitted that he thinks “... the CPUC is massively understaffed and undercompensated, and they are just overwhelmed with the many things that they are required to do with limited staff.” which the independent, nonprofit newsroom Canary Media reported.
The California Solar & Storage Association ("CALSSA") is offering a counter argument to the cost shift theory in their report “Rooftop Solar Reduces Costs for All Ratepayers”, in which they point out several important factors which were not included in the cost shift analysis, including that while California’s demand for electricity has grown, that growth has been offset by rooftop solar, which in turn has avoided costly grid expansion projects.
The peddlers of the cost shift theory have in the past been quick to point out inequity in rooftop solar (see Rooftop Solar Inequity). That argument was not mentioned in Borenstein’s most recent blog post, perhaps because the latest report from Berkeley Lab shows that solar-adopter incomes include many low-and-moderate income households and that “solar adoption continues to slowly shift toward less affluent households over time”.
Borenstein goes on to state that the California solar industry is quite healthy. To back this statement he quotes the CEO of Sunrun from a February 2024 earnings call saying “In fact, California is growing faster now than the rest of the country for us.”
The main idea behind Sunrun's business is to provide residential solar through a subscription-based model which allows property owners to install solar at no upfront cost, but without the benefits of ownership. Since NBT has made solar ownership more costly, it’s no surprise that Sunrun’s share of the residential solar market has increased (see Figure 1).
Figure 1. Sunrun’s share of the California residential solar market in percent, calculated using system size capacity (AC) added from Sunrun residential applications divided by system size capacity added from all residential applications. Data from California DG Stats with applications approved up until March 31, 2025.
Borenstein acknowledges the crash after the NBT deadline in April 2023, but he claims that “... market demand actually didn’t miss a beat. New system applications in the first seven months of 2024 were just 7% lower than in the same time period in 2019.”
With the cost of solar panels decreasing by about 20% for each doubling of cumulative capacity, leading to a price drop of about 90% in the last decade (see Our World in Data analysis), and with the growth of renewable energy being necessary for California to meet its climate goals, it can hardly be seen as a success that solar installations are back to levels well below where they were over 5 years ago.
The blog post then goes on to present a figure that displays bars aggregating the number of applications for three time intervals before and after the NBT decision of December 2022, with the claim that “the only downturn in sales that the industry saw after the CPUC policy change was due to sales pulled forward by customers looking to beat the implementation of the new policy.”
It is unclear why Borenstein uses “the vibrant days of 2019” as a benchmark - why ignore the year 2020 to the end of 2022 (prior to the NBT decision) where residential solar is showing linear growth by far surpassing 2019? Claiming that the market during the 2020-22 time period was boosted due to rising electricity rates and fear of shutoffs are not grounds for removal of this period of growth from further analysis. Those are just two common sense reasons for why you’d want to install solar panels on your roof.
In Figure 2 below, the number of residential applications by month are displayed, with the time interval from the NBT decision of December 2022 to the NBT implementation of April 2023 highlighted in green. It is clear from the figure that if you include the highlighted area in your “After” bar as Borenstein does, the number of sales will seem to be doing great in the aftermath of NBT, but it’s a dishonest way of displaying the data. As can be seen in Figure 2, the number of residential applications have yet to recover to this day.
Figure 2. The number of residential applications with applications under NEM in yellow and under NBT in orange. The time interval between the NBT decision in December 2022 and the NBT deadline in April 2023 is highlighted in green. Data from California DG Stats with applications approved up until March 31, 2025.
If you’re truly concerned about sales being pulled forward by customers looking to beat the NBT deadline, a more honest way of displaying that would be to compare sales 6-12 months before the NBT decision to sales 6-12 months after the NBT implementation. This would completely exclude the highlighted area in Figure 2 as well as the 6 months before and after. These sales are shown in Figure 3 below.
Figure 3. The number of residential applications before and after NBT. ‘Before’ in the figure is the time interval 6-12 months before the NBT decision (Dec 2021 - June 2022). ‘After’ is the time interval 6-12 months after the NBT deadline (mid-Oct 2023 - mid-Apr 2024). It is clear that sales did not rebound after the NBT implementation.
Borenstein concludes his blog post by stating that we should concern ourselves less with net metering and focus on bigger issues, like global carbon emissions and making energy more affordable in California. Although lowering carbon emissions in developing countries is a worthy goal, it cannot distract from California’s commitment to achieve 100 percent clean energy by 2045. I think all Californians agree that utility bills are out of control, but reducing costs to consumers is a priority then why are utility companies allowed to make record profits over the past two years, and why did CPUC allow 6 rate hikes in 2024? [Canary Media article]
Instead of blaming solar incentives for the utility rate hikes, it’s time to look at how the utilities conduct their business.
