Valuing the Invaluable: The Societal Benefits of Rooftop Solar

Reduced Climate Impacts: 3¢/kWh
Cleaner Air: 2¢/kWh
Conserved Water: 1¢/kWh
Preserved Open Space 2¢/kWh
More Resilient Energy System: 2¢/kWh
A Better Future for California...Priceless 

California's official state fruit is the avocado. The state reptile is the desert tortoise; the state gemstone is something called benitoite. I'd like to suggest the next addition to that list: the official state energy source, rooftop solar. What could be more Californian?

In California, we want our scarce water used to grow avocados, not to cool gas plants that emit pollutants fueling climate change and smog. We want to site our power plants on our rooftops, keeping our beloved open spaces free for recreation, agriculture, and desert tortoise habitat. And did I mention that benitoite, like the crystalline silicon in photo voltaic panels, is also a silicate mineral? It's no surprise that according to a recent poll, a whopping 78 percent of Californians support increased incentives for rooftop solar, with majority support from members of both major political parties. 

But California's existing policy for compensating rooftop solar, known as net metering, may be changing. The California Public Utilities Commission (PUC) is required by a recent statute to reevaluate net metering, and ensure that the payments homeowners receive for the energy generated on their rooftops is "approximately equal" to the total benefits their systems provide. (To catch up on the debate at the Commission, check out Greentech Media's recent summary.)

Californians love rooftop solar for all its benefits, including its positive environmental and societal impacts. The Sierra Club believes the PUC needs to consider all of these benefits as it develops the successor to net metering. While many other studies on the costs and benefits of rooftop solar have included societal benefits, none had results specific to California. Sierra Club worked with Berkeley consulting firm Crossborder Energy to quantify six benefits of rooftop solar in a way that could be used in the cost/benefit model the PUC is relying on for its decision, called the "Public Tool." Our analysis concluded that rooftop solar provided about 10 cents of societal and environmental benefits for every kilowatt hour of generation. As we discuss in our white paper Non-Energy Benefits of Distributed Generation (PDF), that ten cents includes the value of each of these benefits:

• Reduced climate impacts: The climate crisis is squarely upon California. The impacts we're already experiencing, including the loss of the Sierra snowpack and extreme wildfires, have already cost the state millions. The EPA's Social Cost of Carbon estimates that each metric ton of carbon dioxide will cost society up to $120 in 2015 -- equivalent to $0.03 per kilowatt hour of rooftop solar generation from avoided carbon emissions.

• Cleaner air: The top five cities in the U.S. with the worst air quality are all in California. We have some of the highest asthma rates in the nation, causing California children to miss an estimated 1.47 million school days a year. By displacing fossil fuel generation, rooftop solar reduces the emission of unhealthy criteria pollutants like particulate matter and nitrous oxides. Less pollution means fewer health costs borne by society in the form of emergency room admissions, lost work days, and premature deaths. The EPA estimates that these costs total $24 for each pound of particulate matter, and $184 for each pound of nitrous oxide, equivalent to $0.02 per kilowatt hour of rooftop solar generation from avoided air pollution.

• Water conservation: Generating electricity from natural gas requires a lot of water. Requiring water for energy consumption both exacerbates the drought and potentially affects grid reliability where water restrictions limit gas plant operations. By reducing the stress on water supplies, rooftop solar makes water available for cities, agriculture, and aquatic habitats. We base our estimate on the value of water on what it would cost to retrofit existing gas plants to convert to cooling technology that uses no water, or to desalinate ocean water. Our estimate comes to about $1,600 for each acre-foot of water saved, adding about $0.01 to the value of each kilowatt hour of renewable generation.

• Open space preservation: When we use the existing built environment for energy production, we protect California's open spaces and priceless natural heritage. As a recent New York Times article points out, avoiding development on open spaces has benefits that transcend purely monetary value, like preserving migratory corridors for wildlife. We base our estimate on the value of agricultural land, leading us to conservative value of $0.02 saved for each kilowatt hour of rooftop solar generation.

• A more resilient power system: Climate change will affect the reliability of the power system (PDF). Higher temperatures decrease the efficiency of fossil fuel plants, requiring more fuel to generate the same amount of power. Rising oceans threaten coastal power plants, while dwindling snowpack makes hydropower reservoirs low. Longer, more virulent forest fire seasons increase the likelihood of fires taking out transmission lines. Rooftop solar insulates against these threats to reliability by siting generation close to load. When paired with storage and smart inverters, it will increasingly be able to provide a host of grid services to help stabilize power flow and keep power on during grid outages. By our estimates, this security is worth $0.02 for each kilowatt hour of rooftop solar generation.

Californians want the future that rooftop solar promises: one where we all breathe clean air, where natural habitat and agricultural land are preserved, and where we are not bound by the shackles of a fossil-based economy. The PUC should consider monetized values for societal benefits in its deliberations on the future of rooftop solar compensation. It would be a small but important step to help realize a better future for California.