In this podcast episode, EWG President and co-Founder Ken Cook looks at solar power, in particular the industry’s big success in California – until the utilities decimated it.
Ken speaks with Bernadette Del Chiaro, executive director of the California Solar & Storage Association, who was instrumental in passing the Million Solar Roofs Initiative into law with then-Gov. Arnold Schwarzenegger in 2006. The law provided a huge boost to the state’s push for cleaner, cheaper energy, with more than 2 million solar rooftops installed.
The demand for solar also created over 70,000 jobs. But the industry’s growth drew the ire of the monopoly utilities like Pacific Gas & Electric Company, Sempra and Southern Company. They worked with Gov. Gavin Newsom’s handpicked utility regulators to dismantle the solar industry, the only real threat to their bottom line. The utilities used misinformation and deceptive tactics against solar to protect their profits, as Cook and Del Chiaro discuss.
Disclaimer: This transcript was compiled using software and may include typographical errors.
Ken: Hi, it's Ken Cook. I'm having another episode. This is a mixed one. Lots of joy because of my guest and lots of anxiety, which often triggers my episodes because of the state of the world on the topic we're going to consider today. My guest is Bernadette Del Chiaro, who heads the California Solar and Storage Association and for many reasons is one of my real heroes in the environmental movement.
When I first came to California and I was so excited to see the manifestation of what I didn't know at the time was her work. Solar panels everywhere. Schools, private homes, parking lots, warehouses, everywhere. When I saw that, I was reminded of what a friend of mine said when I moved to California.
She said, Kenny, every time I go to California, I feel like I've visited the future. And those solar panels on rooftops, parking lots, farms all over the state, here's a photo of my guest today, Bernadette, right next to Arnold Schwarzenegger, and he's signing Senate Bill one into law. It was the bill that started the solar rooftop revolution here in California, and Bernadette, she was the one who was pushing Schwarzenegger to do this.
He did it. It was one of the signature accomplishments of his administration as governor in California. That put California in the leadership, not just nationally, but globally made us the envy of the world. But Bernadette, thank you for joining. You've become a friend and an ally and take us back to that day.
Bernadette: Well, hi, Ken. It's really great to be here. It was an amazing experience to be there because so often in the legislative process, things get really watered down. You get a lot of politicians wanting to pat themselves on the back for, you know, getting only part of the way there. And this was one of those rare situations where we had bipartisan support for a policy that ended up staying just as strong as its original vision, which was to build a million solar roofs in California as a way to not only build a lot of clean energy, but more importantly, really to jumpstart a revolution, a transformational form of how we generate energy and move it about. A
And I look back on it also and, and just marvel at what we were able to accomplish there, you know, up on stage, we had Republicans and Democrats from all over the state, along with a Republican governor, and then, you know, the environmental community and, and clean energy businesses.
And we had a very good 10 year honeymoon after that with the governor Schwarzenegger kind of ushering the implementation of that bill through. And then governor Jerry Brown following up and keeping that vision up and saying, we should have more than a million, you know, we should keep going on distributed rooftop solar.
So California had a really good, we did, we had a really good run.
Ken: And where are we now in California?
Bernadette: It's amazing. We, uh, now have 2 million solar roofs and, and to this idea of a transformational initiative, it took us 10 years roughly to build the first million solar roofs, and then it took us five years to build the second million, and if we had been allowed to keep growing at our current rate, but we have 2 million solar roofs.
And to give you a sense of the size of that. Each individual roof may seem small, you know, although you mentioned there's big giant warehouses with tons of solar panels on the top. So you get some big systems out there, but all added together, it comes to 16 gigawatts to put that into perspective, that's about 8 nuclear power plants worth of clean energy in which no land had to be developed.
It's all on our roofs all over parking lots on already disturbed land and even equally important. It's super efficient, right? Delivers the energy exactly where we're going to use it. So it's phenomenal.
Ken: Yeah, we're not building transmission lines. What the hell is going on in California, and why is Gavin Newsom, the governor, leading the charge to help tear down the solar industry?
And we'll get into the arguments that are being made, but the fact of the matter is, your industry and the trade association that you've helped build, these are people who are standing up to Sacramento and its tens of thousands of very good paying jobs that we promised as environmentalists way back when, not knowing if it would happen.
Right?
Bernadette: Yeah. We had a, if you build it, they will come approach. If we create the demand, if we create the opportunity, the industry and the innovators will step forward and we'll deliver. And it worked. I mean, we, uh, at one point had 60,000 people working in just the California rooftop solar industry. And thousands of companies, most of whom are local mom and pop family run businesses who got into this industry because like you and I, they believe passionately in clean energy in alternatives to the way we're doing things today in solving climate change in tangible, meaningful ways.
This is their life's mission, just like it is for those of us in the environmental movement. And now the state of California is saying, please go home. We don't need you anymore.
Ken: Yeah. You've overdone it. Yeah. You've been too successful. Exactly. It's really astonishing. I've met a lot of these great people.
They are deeply committed and they love the idea of giving people not just clean energy, but a measure of independence from these monopoly utilities who've been granted complete control over powering our lives until now, until rooftop solar came along. That's the first competition these utilities have experienced in over a hundred years.
So it's not a power plant far away. It's on a rooftop nearby and it's distributed because it's not concentrated. It's not the old model of, hey, let's put a nuclear plant right along the coast. Always a smart idea. Or let's build massive solar panels in the desert and then run transmission lines through beautiful valleys, because we got to do that.
And we all thought we were building something together, the kind of thing we always hear from politicians. They want environmentalists to build, right? That we're going to work with the private sector. We're going to come together. We're going to compromise. We're going to focus on creating economic opportunity and jobs to a scale that at a pace that was completely unexpected, broke through all the expectations.
Now we have to sit down with somebody and they're telling you they're laying people off.
Bernadette: Yeah. Yeah.
Ken: Because of the government.
Bernadette: Yeah. Yes. Yes. Not because, I mean, that's actually such a good point. We just laid off 17,000 jobs, full time jobs, primarily installation jobs. So these are the hardworking men and women that climb up on ladders and do the hard labor that's involved in actually building our clean energy future in very real tangible ways. 17,000 jobs.
These were jobs that on average pay about 75,000 a year with full benefits. These are good jobs and you can work your way up from there. And we promise these workers, come on over, come learn how to do solar, it's a craft, it's a specialty craft, come learn this, and you're going to have a great job, and it's meaningful, and we're having to let these people go, it's heartbreaking.
Many of my members, um, full grown men, not to get cheesy, but are in tears.
Ken: That is the thing as an environmentalist that upsets me the most, that this opportunity has been taken away. Now we're going to talk, now we're going to talk about why. We are facing this serious headwind because the utilities attacked.
Now they were probably attacking way back when, when you started the solar rooftop initiative, a million solar rooftops.
Bernadette: What's so interesting, Ken, is, um, this is going back to when we first introduced the first iteration of the million solar roofs bill, uh, was in 2003 and we fought in 2003, 2004, 2005. All three years, big, huge bills, front page, newspaper stories, because this idea was radical and it caught the attention of everybody.
And, you know, even, um, nationally syndicated radio show, making fun of our legislation here in California. And when he made fun of it, he made fun of my name and my job title and the bill. But what was so interesting is at the end, as he was just sort of shooting, you know, spouting off, he was like, actually, rooftop solar kind of makes sense. You know, it actually kind of makes sense, but maybe not yet. Maybe not yet. Maybe we need to wait for the prices to come down, but even Rush Limbaugh couldn't really find anything wrong with it, but what was keeping it at bay from being passed in the legislature?
And this was a democratically controlled legislature, although Republicans had way more seats than they do today, was the three investor owned utilities, PG and E. Southern California Edison and SEMPRA, which is a gas company that owns San Diego Gas and Electric.
So those three big utilities were the number one opponents, and in addition, behind them, they had sort of their same surrogates they have today, which is their union, which is affiliated with the utilities and has agreements to pay for You know, protect the utility from the competition.
And then we had, you know, a hand, one environmental group, one consumer group, and a, uh, a professor from UC Berkeley, the same exact cast of characters that are still very much opposed. But the story that I remember is so illustrative of, of the power that the utilities had, because they're really there.
It's like they create the gravitational pull.
Ken: It’s unbelievable.
Bernadette: Right? These little voices rotate around them.
Ken: And I'll just interrupt to say. We've gone up against big ag, we've gone up against big chemical companies, oil companies, natural gas companies, big food. We've gone up against all of them.
I have never gone up against an industry that has such a tendency. Stranglehold grip and control on politics and regulatory agencies, as is the case with regulated utilities here in California. They have incredible power and their power is fueled by our money.
Bernadette: That’s right. Their number one argument was solar was unreliable.
Uh, that was their number one, go to argument is we cannot rely on these solar panels because what if there was a cloud crossed over?
Ken: Yeah. I hadn't thought of that. The light would go off. I hadn't thought of that.
Bernadette: The grid would blow up. So that was the number one. Yeah. Clouds.
Ken: Okay. The cloud, the cloud argument.
Bernadette: And then number two was, this is just too expensive. You know? Yeah. These, these, these rooftop solar panels are really costly. We can do it more cheaply. You know, don't, don't do this. This is not a good idea. And they blocked the policy three years in a row and I'll never forget. But we had gotten pretty far one year and we were in.
The assembly, uh, utilities committee and the chair of the committee were at this like heated moment and the chair of the committee was sitting up at the dais and somebody had just proposed an amendment. One of the other legislators up at the dais had a proposed a poison pill amendment to the bill and the chair.
Just right there in front of everybody goes, well, let me check in with the utilities and they were sitting all in the front row of the committee hearing room. Set it out loud. Literally from the dais. I need to dig this video up. She's like PGD. What do you say? What do you think about this amendment?
You're okay with it. Okay. Edison. What do you think? Sempra. What do you think? You guys are all good with this amendment. All right, let's do it. Boom. And that was it. Like literally asked them from the dice and it was a poison pill. We, the public interest solar community, we're all opposed to it. And that's the kind of power that they wield.
I mean, they literally own these chairs and the agencies that are supposed to be regulating them.
Ken: So now they've moved on from the cloud argument and also worth noting, there was this convergence with technological advancements where, wow, the price of electricity generated from a solar panel dropped so dramatically, right?
Bernadette: Yeah, we saw the price drop 80% and as continued, it's, it's now plateauing and going up a little bit because of all the bad regulations, but yeah, we saw the price absolutely plummet to the point where solar today, and we can get at this, but it is the middle and working classes, favorite home improvement project.
It can pay for itself with the right policies very quickly and can cut your utility bill by 50 percent or more. It's the most effective way to save money and just make California. Not only a greener and healthier place, but actually a more affordable place to live and it's all because of those cost reductions.
And that was the vision, right? That if we build the demand industry manufacturing, in particular, will be able to lower the cost because of economies of scale and to your earlier point, California really did truly have an impact on the global solar energy market because our market really is huge.
And when we put our mind to it and we create the demand, the manufacturers all around the globe and solar panels are primarily made of sand, glass, and aluminum. It's a, it's not the hard to come by resources. They were able to scale up production and bring prices really, really low. And this is like a huge success story, but of course we got to keep people having access to it.
Uh, we'll get to that, but yeah, the price plummeted as a result of directly, of these programs and policies.
Ken: And all of the, as I recall, all of the government agencies were wrong when they predicted what the cost of solar would be going forward, they all, they underestimated how quickly the prices would fall and how quickly adoption would rise.
Uniformly, right? Got that completely wrong.
Bernadette: Yeah, I think that's right. I think they often get consumer behavior wrong. I think a lot of times regulators forget how hungry I think Americans, I think Californians in particular, but Americans are just, we, we love, we love solutions. We love technological solutions in particular, but we are a very open and willing group of people and we will embrace new like it's nobody's business.
And so, yeah, we always defy gravity because of that. And that's, that was why I was so interested in rooftop solar to begin with as opposed to other forms of energy because it captured that. It captured the, the power of the public and the public's desire for, for positive change.
Ken: I have to say as an environmentalist, to be able to be for something, pretty damn exciting, right? Right, especially something that solves so many problems at once, creates economic opportunity, makes the cost of living lower, all the things that we sometimes say environmentalism will lead to and sometimes it does, but sometimes we don't get there. But in the case of solar, we were, we were really getting there and we, we still can, we can regain it.
But now we have to talk about the arguments. that the industry brought to bear that began to take hold and ultimately did take hold with policymakers and at the California Public Utility Commission, the regulating body that makes decisions that affected profoundly the future of, of rooftop solar. Do you remember when you started hating poor people, Bernadette, you and the other solar installers, when you started feeling like it was time we, we put them at a greater disadvantage?
Because that's kind of the argument that's being made, right? They're picking up an unfair share burden. The cost burden is shifting to them and utility executives wake up every morning worried about poor people.
Bernadette: Right. And they are the saviors. Everybody knows that. Right.
Ken: Yeah, so where does the argument first start coming onto the scene that rooftop solar is an affliction upon the masses?
Bernadette: I mean, here's a jaw dropping fact that most consumers have no idea. In your monthly bills, you pay to the utility. A portion of that money goes directly into advocacy that then undercuts what you want as a, as a consumer. So the utilities collect money, they are legally allowed in the state, not all states, but in California to spend a portion of that money on Organizations like the Edison Electric Institute, called EEI, it's well known in the nonprofit community as, uh, sort of the evil think tank, uh, the entity that literally sits around and schemes up how do we slow down this transition to clean energy.
Because it's really important for people to understand. Even though these utilities have public in their, you know, their names, they are the fossil fuel industry. P, G, and E. G stands for gas. These is a company that is heavily invested in fracking, heavily invested in the natural gas industry. You know, these are not, you know, the people that are really sitting around thinking about how do we accelerate clean energy.
It's quite the opposite. So they've got an EEI that is also the coal industry and everybody else in this sort of old legacy fossil fuel sector. And they started to get really scared around 2013 because California had Arnold Schwarzenegger and then Jerry Brown, our prices were plummeting to your point beyond expectations, demand was on the rise.
We were seeing low and middle income people embrace a rooftop solar, like never before. It was becoming a mainstream thing and batteries were kind of on the horizon. They were there off on the end. They were like, Oh man, and that's a game changer. We got to nip this thing in the bud.
Ken: Yeah.
Bernadette: So they, um, had tried this idea of the death spirals. First, they said it won't be reliable because of cloud cover. Then they got disproven. Then they said it's too expensive. Then they got disproven. Then they said, oh, we're going to be out of a business because nobody's going to buy our product. And then we started to see electrification, right?
Promises of EVs, um, and other things. And so, oh, that's not going to work. So they cooked up this idea of a cost shift. And here's how the cost shift basically plays out and works. This is the argument. They say, To run the grid, which is a public surface, right. That we've been, you know, asked to do.
Ken: Right. I know, I know.
Thank you very much. Thank you. Thank you. Yeah. Yeah. No, no. And I'm, if I tear up at the public service part, right. We'll probably edit that out.
Bernadette: Altruism just makes you a clamp. So, so the, the cost of running the grid is fixed in their world, in their worldview. There's a set amount of costs and those are fixed every single year.
You can't get out of those costs. And so if we have 11 million rate payers, which is what we have roughly in California as investor and utility territories, and everybody is paying an equal amount, put aside subsidies for low income, et cetera, but pretty much just imagine that pie that is set in stone and the utility world, right?
Divvied up among 11 million people. Everybody's going to pay a tiny bit. So slice of the pie is very small, but according to this cost shift mythology, if those solar users. Go and they leave the system, basically, and they start generating their own power. Well, that leaves this fixed pie has to be divvied up among fewer and fewer people.
That means everybody else is going to have to eat a bigger slice of the pie. And this is not the kind of pie you want to eat. That is the essence of the cost shift idea that these costs are fixed and we need everybody. At the trough, the utility trough in order to bear those costs evenly across society.
And then they added a little zinger, and this is sort of at the end of the teens in 2018, 2019, they came up with this one, which is, and by the way, those people with solar that are taking their toys and playing in a different sandbox, they're all white, wealthy coastal dwellers. And everybody bought both ideas.
We've had complete intellectual capture among our regulators and among certain people in Sacramento, the governor's office, they all believe this myth that costs are fixed and that all the people who are going solar are wealthy white people. So not only are the solar people not paying their fair share of this grid, but they're putting the costs onto poor people.
So that's the cost shift. In a nutshell
Ken: What is wrong with that because I guess technically Anytime I was using less energy, like if I buy an energy efficient dryer, if I insulate my water heater or my walls or my roof, I've done all that, I guess I'm shifting costs too, right? Aren't I using less energy and somebody else has to make up the difference?
Bernadette: Yeah, right there. I, I'm now part of the cost shift because I just turned off my light. That is basically the idea. You know, uh, we have an economist who crunched the numbers using the. Crazy cost shift calculations that are coming out of our public utilities commission right now. And he applied those numbers to energy efficiency programs and he concluded, by their math, we'd have a $17 billion cost shift, all due to energy efficiency. We should stop being more efficient, apparently.
Ken: And wealthy white people love nothing more than to impose those costs on poor people.
Bernadette: It's a big, big fat lie. Number one, just to start with, and this is the one that usually has people's jaws down of our 2,000,000 solar roofs on single family homes alone, and I'll get to multifamily 60 percent are low, working and middle class families, 60 percent of our market has been embraced and invested in by the hard working middle class, working class, low income.
That's the demographic that comes straight from Lawrence Berkeley National Labs analysis of our data. It's all public data and that is who has embraced solar.
So 60 percent that number actually is even higher. If we could get Lawrence Berkeley National Labs to add in multifamily housing. So we have built thousands of apartments with rooftop solar. Providing cheaper energy bills, more affordable bills, bills that are reduced by 80 percent because of the rooftop solar.
For 60, 000 low income families that are renters. And then we have thousands of these projects in the pipeline funded through greenhouse gas emission funds to get another 100, 000 families in rental units. Benefiting directly from rooftop solar or parking lot solar that's an addition to the 60 percent on single family.
So rooftop solar is not only not just for the rich, but it is actually the polar opposite. Oh, and I should mention 53 percent of our 2 million single family solar users are families of color. According to the U. S. Census. So these are people that reflect the diversity of California that are going solar.
One of my other favorite facts. There are five times more families with solar in Fresno than San Francisco with the exact same population. Now, when I say that sometimes to skeptics, they just go, they scoff and they go, well, yeah, because it's hotter there. To which I say, yeah, they have higher electric bills and they need that relief more than people in San Francisco.
That's the whole point. You know, in deep red Trump country, we have more people embracing rooftop solar than in deep blue country. Right. If you want to think about it that way. And that's not to say that people don't love it in the Bay area. It's just, it's way more popular even in our inland areas. And it just, these facts kind of blow the stereotype out of the water, they start to unravel the cost shift myth because that really is a powerful fuel. It makes a lot of people feel guilty and bad about themselves when they shouldn't be. So, so that's number one. The second critical factoid that debunks this cost shift idea is that a costs are not fixed.
They are not fixed. They are not immutable. They are absolutely the opposite. The utility, in fact, has increased their spending on all their grid by 300 percent in the past 20 years. So if costs were fixed, they would be pretty much the pie would stay the same. But instead that pie has grown 300 percent in 20 years.
And despite the fact, and this is where the scandal comes in, where our regulators are so asleep at the wheel. This is despite the fact that California is electricity consumption, including our peak electricity consumption has stayed absolutely flat over 20 years. Increased population, increased economic activity, increased plug load with all those devices.
Think about how much we have electrified already devices in our homes and our buildings, increased temperatures and, you know, a growth in electrification of, of our cars and our buildings. Despite all of that, we have kept electricity running. Demand on the grid flat overall plug load has increased, but we've met that increase with rooftop solar that should have allowed the utilities.
To not only keep their spending flat, you know, maybe increase with inflation only, but actually they should have been able to reduce spending because there's nothing that they're really spending that much money on. That's different. What
Ken: are they, what do they spend it on mostly?
Bernadette: Well, they claim that they're spending on wildfires.
Ken: Including the ones they start.
Bernadette: Yeah, yeah, yeah, yeah, we dug in, we hired this economist to dig into every rate filing of the three investor owned utilities going back to 2014. And if you analyze that data, only 12 percent of the investor owned utilities spending is on dealing with wildfires. So what are they spending that money on?
Here's the other big jaw dropping fact. Nobody really knows. They go to the PUC and they say, safety and reliability. We want to be safe. We want to be reliable. The governor wants us to be safe and reliable so he can keep his job.
Ken: Want to keep the lights on. We want to. We want to cut way back on the felony homicides.
Yes.
Bernadette: Yeah. We don't want to do that. We're good. Yeah. Yeah. We know that was bad. Yeah. And this is the thing. They're spending increased 300 percent during that time period of all those wildfires. And it comes to light that they were not making the safety improvements in the grid.
That's why they were found to be grossly negligent and liable for those deaths. That's why they weren't actually, and here's the thing, Ken, these regulators do not check receipts. If I adopt a budget for a year, And I say, I need to spend X amount on paperclips and postage stamps. I have receipts to show for it.
I actually have books that I keep. Nobody does that at the public utilities commission. There is no, you know, this substation, did this substation get upgraded the way you said you were going to, did you tighten up the transmission lines and make them more secure the way you said you were going to?
Ken: Cut down the trees that are near the transmission lines?
Bernadette: Do any of that? They don't check it. They don't check it. And so. What the utilities do is they say, we need all this money for all of these poles and wires and substations and everything, and we need it for safety and reliability. You better give it to us. The PUC basically goes, um, shave off that tiny, I don't think you need that box of paper clips over there.
And then you're good. And they rubber stamp 99 percent of what the utilities asked for. And then they turn around and give them that guaranteed profit based on all of that spending. They are one of the most profitable corporations in California, which is why they are the number one campaign contributor to Sacramento politicians. They are the number one.
Ken: If you know all three of them together, all three of them together.
Bernadette: They all act in unison on these things. If you add them all three, they beat every other oil industry, the plastics industry that, you know, everybody else, these guys, when you add their money together, and then when you add in there, Affiliated labor union it's, you know, games over for Sacramento politics, really, because they have so much power and that is all coming from us. It's all coming from this regulator that is rubber stamping their spending increases. And then they have the audacity to blame the one thing that has a chance at actually cutting at that spending, which is distributed generation, generation that doesn't require all that spending.
In fact, private people are investing their own money in their own generation. But here's the beautiful thing about it. They get to basically create a scapegoat. So all of these regulators have been talking about solar as the problem, as if rooftop solar is why they've increased spending 300 percent in the past 20 years.
So they get this scapegoat over here. And in the meantime, the scapegoat is their number one competition. So they get to knock out the competition and have something else to talk about. And they get to keep spending and spending and spending and profiting and profiting and profiting. And it's just, it is time.
It has reached a place of crisis. And it's really important that people stop and, and pay attention to this problem. And we get some real accountability in California.
Ken: Yeah. Patty Poppe, I think, what was her compensation in recent years? Over 50 million. The head of PG&E.
Bernadette: Yeah.
Ken: Over 50 million.
Bernadette: That was just the bonus.
Ken: That was right. Yeah. I guess if you, if she was shooting three pointers like Steph Curry, we'd all look the other way, but come on. Yeah. That's part of the understanding the power of these utilities is knowing how much they spend on campaign contributions. When did it start to gel into a, a meaningful policy attack to make it less attractive for people to put solar panels on the roof.
How did that unfold? Bernadette?
Bernadette: Well, the, the books were cooked from the beginning with this particular administration. And it's important for everybody to understand that the public utilities commission is governed by five individuals and the five individuals are all appointed by the governor. So what the governor wants is acted out, is realized through these five commissioners.
Yeah. Yeah. Incredibly influenced. And. Under previous governors, Schwarzenegger and Brown, who actually really believed in rooftop solar and championed it as a cornerstone of how we are going to get rid of fossil fuels, the PUC was, you know, they weren't The most radical organization in the world, but they certainly weren't coming after rooftop solar.
And, you know, we had a good run starting with the Newsom administration. This agency, uh, just decided that it was going to come after rooftop solar. They hired a consulting firm that exclusively works for utilities. So, you know, who you hire and who breads your butter is. Who you are going to bow down to.
So unsurprisingly, this consulting firm did a study on the cost shift. It was the first kind of real official unveiling of this mythology. And they of course, minimize the value of rooftop solar and maximize the costs and how they did their cooking their books and came out with a big cost shift, uh, between rich and poor.
Of course, they did not do good studies of how many working class and middle class people have solar. Totally cooked books, bad study, bad methodology. But it told the utility story and the PUC published it. And that became the foundation upon which this agency then proposed six months later, a tax on all solar panels previously installed and to be installed in the future specifically to put money back into the pockets of PG&E and the other utilities.
And then on top of that. A slashing of the value of energy, you know, when you have solar on your roof during the day, usually it's size, the system is big enough that it's generating a little bit more than you're using at that exact moment and that generates a credit, that credit blows that in the energy itself flows to your neighbor and your neighbor's home becomes effectively way more energy efficient from a grid perspective and that credit is valued at retail rate.
And that goes against your energy that you use at nighttime, where it's actually pretty abundant and cheap, by the way, that's net metering, what the Utilities Commission proposed six months after this cost shift study came out.
Ken: And what year was that?
Bernadette: This would be 2022.
Ken: Yep.
Bernadette: 2022. They proposed a solar tax and they propose slashing the value of those credits 80 percent and they had it all of that retroactive.
So, if you were part of the, at that point, 1. 5Million people that had gone solar responded to California's clarion call to be part of this clean energy movement. Shame on you. We're going to claw back your savings. We're going to call them back and we're going to put that money into the pockets of these utilities because you're not paying your fair share of the grid.
That was the initial proposal. And you know, from there we were on the defense and all we could do was just try to get rid of that tax. We saw that tax as the most deadly weapon against us because if you tax the solar panels, forget about the batteries, forget about the future of this industry, taxes go nowhere but up. They are a tool to get people to reduce their behavior, right?
Taxes are things you put on things you want to see less of, right? So we, we put everything and it took all we could do to stop the solar tax. And as a result, we then had to live with this 80 percent reduction, which we can get to what that has meant.
But that was all played out in 2002. We made such a stink that the governor had to go, Oh, maybe I'm not for taxing solar panels. Uh, and we kind of did this cat and mouse game for the next 12 months until they came out with the final decision that didn't have a tax in it, but did have that 80 percent overnight drop off.
It's been devastating.
Ken: There is no company more despised in the state of California than PG&E, the giant utility that dominates Northern California. They've killed people. They lied about maintaining their power grid. They spent the money on dividends to shareholders instead of keeping people safe and communities were wiped out and people died.
So people hate these companies. So how is it that in Sacramento, so many politicians for so long have been spineless in standing up to these utilities and raising questions about their practices, the way they have with the regulators. I've had a hard time understanding the grip that these utilities have and that I think Governor Newsom has.
When their constituents are outraged by what's happening with energy prices, didn't they just get a billion dollars so that they could move their headquarters?
Bernadette: Yes, they did. To Oakland? Yeah.
Ken: It's just gotten so crazy. Help me understand that.
Bernadette: Yeah. Yeah. Just as a little sidebar, you know, this industry that I work for rooftop solar would not exist if the public demand for this technology wasn't there.
So of course we're just like an iteration essentially of the public's will. So just to say that we're like the same pub, you know, same type of special interest as utilities is ridiculous because the public wants these and isn't, it's in demand.
Ken: We want more of it. We want more of it.
Bernadette: We want more.
Absolutely. And we want it. We want it in our home. Right. We don't want them to pull the ladder up just when we were about to afford it. You know, that's, that's the tragedy here, but there are rank and file legislators, right? There are 120 legislators in California. And there's 1 governor, and then there's 5 commissioners at the CPUC.
That's basically the universe of the people that have control over the utilities. And the rank and file legislators have actually always been on our side. Always have been on our side and that flows from the polling of their constituents that have always been on the side of rooftop solar is a no brainer left and right pulls out of this world better than any other energy resource.
But the thing you got to know about Sacramento is it's actually really easy to control the legislature by controlling leadership. If you can get control of the governor's office, if you can get control of the speaker and the Senate pro tem, and if you can get control of the two chairs of the energy committee, it's five people.
You've basically got it made because the rank and file can't get past those barriers. They're in control of the rules. I'll give you 1 example. In 2005, we had passed the 1,000 000 solar roofs initiative, passed all of the committees in the Senate, all of the committees in the assembly. Our author was Kevin Murray, a very powerful Senator from Los Angeles.
He was the black man standing on the other side of Arnold in that photo you showed, incredibly powerful, incredibly savvy. He was the chair of the appropriations committee, which is second, most powerful position in the legislature. And we had gotten through both houses and it was 11. Clock at night on the last day of session, and we were in the assembly and the bill was ready to go.
We had all the votes. We had done our vote count. We had more than enough votes to put that bill on Governor Schwarzenegger's desk, and we all know he was behind it. So he wanted it and the speaker. Basically held the bill and didn't bring it up for a vote. Just didn't bring it up for a vote.
Ken: That brings back so many moments I've lived through on so many issues.
I know what that's like.
Bernadette: That's all it takes. That's all it takes. And of course the media was going crazy. This was front page headline news issue. We had everything we needed to get over the utility opposition. And yet, At the end of the day, nobody's not going to lose their job over this. This is part of how broken our system is because for a variety of things we could talk about another podcast on, but how did we ultimately pass the million solar roofs?
Arnold Schwarzenegger governor at the time basically said, all right, screw it. I'm going around the legislature. We've tried three times now. This is our third time. We had gotten the majority of everybody on board, right? We did the right thing democratically. I'm just going to get the PUC to create the pot of money because the million solar roofs initiative was net metering.
It was upfront rebates and it was a mandate for new construction. Those were the three elements.
Ken: And net metering is where you get money back for the energy credit. Don't use because your solar panels are making more than you need. Yeah.
Bernadette: And so the governor said, I'm going to go get 3 billion of the incentive money to put that, to drive down that upfront cost.
I'm going to go get it from the PUC. They don't need the legislature to authorize spending by the utilities on clean energy. So, I'm going to just go around the legislature. So, he did. And January, this was in, you know, September was the end of session. January, the PUC unveiled a Massive, you know, 3 billion incentive program.
What that then did is it forced the Democrats and the utilities in the legislature to go, Oh, well, I guess they've now basically did it. So we should maybe cap it. So that they can't spend more money. So it actually flipped the script. We went back to the legislature in 2006. We got net metering. We got extended.
We got, um, what was then pitched as a cap on the 3 billion spending program. And we got the mandate to start incorporating solar into new construction and revolutionize how California builds its homes and buildings. And at this point, there was nothing left to really stop because we had kind of changed the playing field.
Uh, and so we got our votes and we got our bill and the point here is we've always had that support. We've always had that support from our democratically elected people. And I think it's important for us all to understand that because you can get so, you know, depressed about the state of the world and, and then politics in particular.
And, and that makes you just kind of want to check out. And we can't check out. We have to believe in this system.
Ken: That's what the utilities want you to do. They want you to unplug from the politics.
Bernadette: That's right. And become cynical and skeptical and check out. And, and we can't afford to do that. So we have to stay engaged and our, our leaders will listen, but it takes a lot and it takes, ultimately it takes leadership in Sacramento that likes that we haven't really seen in a long time.
Right now, the kind of key leaders really have drunk the Kool Aid on this cost shift idea. And we need to debunk that, deprogram that and get everybody back to being intellectually honest about what's really going on with utilities in the state. And we haven't even gotten to this, but putting costs aside, we absolutely are not going to be able to decarbonize and reach our clean energy goals.
If we continue down this path of decimating rooftop solar, we will fail.
Ken: Yeah. I've, and I've seen some of the analyses that you and your colleagues have put together and. The California Energy Commission and the governor's office are not being straight with people about the fact that we're not going to get close to the finish line if we continue to strangle rooftop solar and take this opportunity away from all these little companies and all these individual Californians who want to participate, including renters.
So they slashed by 70 plus percent. The amount of money that you get, if you have rooftop panels and send excess clean electrons to the grid, also an attack on solar in schools and farms and elsewhere, say a little bit about that.
Bernadette: Yeah. So the, the net effect of this very sudden and dramatic change and an incentive program for consumers to invest in rooftop solar is we saw the market completely crash overnight.
Drop down 80 percent from where it was before the, before the rush, right? So a lot of people, they kind of rushed to get in. We were given three months before the new rules went into effect. So a lot of people rush to get their solar system before the new rules. But if you measure before that rush, you just go where it's, this is where we were in 2022, which is a healthy growing market, but wasn't crazy boom.
And we, our market after the rules went into effect dropped down 80 percent from the healthy pre, pre surge. It did not recover fully and has still not recovered fully. Today, we're about 60 percent below where we were before the surge. To give it, uh, you a sense of how it set us back, our market is back basically 10 years is the size of our market.
It's what we were doing Circa 2014, 2015, and as a result of that loss of You know, sales, of course, companies have to let people go, uh, or they just go out of business or they move to other states. And so there has just been this massive kind of tidal wave toppling people. Some have bandaged to stand back up.
They're still around, uh, and struggling about 81 percent of my members are reporting a concern about their ability to stay in business. in the state of California, 81. And these are the best, you know, the people that join trade associations are like, the best in the business. They know what they're doing.
They're not easily toppled over and they are concerned. And this is in a state that purports to be a leader in clean energy. It's really quite tragic. One other thing is the commission, uh, sort of lies and hides behind this idea of we were going to incentivize batteries with this initiative.
Ken: That was what they're giving when they took away, this is, we're all about the batteries now, right?
Bernadette: Yeah. I mean, I think it's really important to understand what's going on there. So the commission made it. Standalone solar, just what was predominant and common as a solar system tied to the grid, they made it twice as expensive overnight and so demand fell off.
They also made it to where it was a little more economical if you added a battery, that part isn't bad incentivizing batteries along with solar is what we've been asking the news administration to do for for many years, they did it at a great cost and as a result of that, we are actually installing today, less energy storage, so fewer you know, megawatts of storage capacity than we were under the previous policy, because of the previous policy, our market was huge and growing and we were increasingly in getting consumers to adopt batteries.
Of course, we could have done more if they had provided incentives for people to adopt batteries, but we released growing and now we have a higher sort of attachment rate.
So more people are buying a battery with their solar system because it's a better investment. It's a percentage of a much reduced market. And as a result, we're not getting more storage. So we're getting less solar. and less storage, less clean energy. It's the wrong direction for California to be going.
Ken: Yeah. You've been so generous with your time and you are such a hero to me, Bernadette. I learn every time I get to spend some time with you and I'm lucky I get to, but where do we go from here?
Bernadette: Well, first, Mutual Appreciation Society here, Ken, I am so admire you and thank you for having me on the show. I know all of your listeners will be nodding their heads.
You have a way of articulating the truth and, uh, stating things so clearly and plainly and unpacking stuff. And it's a pleasure to be on here and have you be a leader in our movement. So thank you. Let me start with the vision of what's possible. You know, California needs, according to, uh, the Energy Commission and the Air Resources Board, we need, and I'm going to throw a couple numbers, but bear with me.
We need 160 gigawatts of solar and battery capacity. We need to build a lot of clean energy. In order to decarbonize our economy, right?
Ken: To get out of fossil fuels.
Bernadette: Get out of fossil fuels, keep the lights on, grow our economy, still have cleaner air and all these great jobs, all of this stuff. We need 160.
We've put a number on it, 160 gigawatts, and that comes down to 10 gigawatts a year. Okay. 10 gigawatts a year. In order to decarbonize at the speed and scale that world's leading scientists say is needed to stop climate change and have California truly be a leader in this whole idea of, of clean energy and climate change solutions.
So we need 10 gigawatts. We have never built that much. And in fact, we've only built 16 of that 160. So we have a long way to go. So that's number one. We're going to need all the rooftop solar we can get. And back in 2016, the National Renewable Energy Lab did a GIS study and they looked at how much rooftop solar could we build in California.
They concluded we could build 70 just on small buildings alone. So that means we could probably build 100, 120 if we covered every parking lot, every warehouse and all of our single family homes and apartment buildings. You get the idea. And then batteries on top of that. So we could basically meet all of this demand almost entirely.
With distributed generation now, speed requires us to do, I think, some additional resources. So we're going to have to swallow hard on some of the utility industrialized projects, but we don't need to do it all out in the desert and we should be going double speed. At building our clean energy in where we live, work and play it.
There's potential is humongous. Don't believe when people say we can't do it all on roofs. That's technically not true. But from a speed perspective, we probably need to walk and chew gum at the same time. So that's the vision is, is solar panels on every roof. Over shading, providing shading over parking lots battery in every garage.
The largest battery today is in California garages all around the state. We have 170, almost 200, 000 batteries. We have this potential that's huge and we can solve these problems and then so doing we can lower those costs of that grid that pie will still always exist. We'll have to pay a little bit to be part of this grid of sharing energy amongst ourselves.
But we don't have to oversize and supersize the grid. We can shrink it down and keep the lights on, stop sparking wildfires,
Ken: And maybe not pay 10 percent that's right to the utilities and these outlandish schemes.
Bernadette: Exactly. Yeah, we could actually profit ourselves and profit in our, inside our communities from a clean energy transformation.
So the potential is there. It's a beautiful vision. We'll have electric cars charged by solar panels right over their heads, no wires needed, right? The vision is clear. It's there. And California, unlike any other place in the world, could do it. We have the most adopting, positive, you know, culture.
Ken: They want to be part of it.
Bernadette: Yes.
Ken: They want to do the positive things and be for something and put their money behind it. And I'm telling you what, solar panels on a rooftop. Makes people fucking smile.
Bernadette: Right? Yeah. And everybody's getting in on the game. It is already equitable, right? Again, all those numbers, it is already something that everybody is getting in on.
Everybody is getting in on it. So that's the vision is we have just started. We have only begun to build out this clean energy solution, shut down those dozens and dozens of businesses. Dirty fossil fuel power plants still spewing air pollution in California. It's still 60
Ken: percent of our power, right? In California.
Bernadette: And, and the, these happen to be actually some of the poorest, most polluted already communities. So if you really want to be radical, Put solar on your roof, install a battery that allows us to shut those plants down.
Ken: Drives me crazy. It drives you crazy. Every time I land at an airport. That's right. And I see the rooftop view of every major city.
It drives me crazy that there aren't solar panels on all of them.
Bernadette: We can be powering all of the neighborhoods near those warehouses, the communities near. We could power the future. You know, AI tech industries, that load is going to be huge, but our own uses as we electrify is going to be huge. And we could power all of this with solar built in our built environment.
If we put the policies in place to make that happen with every, all the rhetoric about how we want to be climate change leaders, and then just unleash the power of the public and our ability as Californians to embrace solutions and innovation. That's the vision. And, um, we can get there.
Ken: I love the vision and it's real.
And that's what's so scary to these utilities is that it's actually real. This could happen and they're not having it. They don't want that competition. They're not listening to their angry consumers and the politicians in Sacramento aren't listening enough yet. either. I think that's going to change.
Your vision is what's inspired me and EWG to get in and stay in this fight here in California. We're going to stay in the fight. Um, I know you can't leave the fight. Thanks for coming on the show. I, of course, I enjoy all our conversations, but you lifted me up. I think we've gotten to the point where we need to say to our public servants serve the public, put the public back in public utility.
I see solar panels and I see the future. That's California for me. And as California goes, so goes the nation on these matters. And the utilities have had a pretty good run recently flattening out that future. We've got to renew our efforts to loosen their grip on the politics, loosen their grip on our personal home economies, loosen the grip on our communities.
And leaders like you have shown us the way, Bernadette, so let's keep this fight going.
Bernadette: Onward and upward. Thank you, Ken.
