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After Incentives End, California Rooftop Solar Power Installations Drop 85%

After Incentives End, California Rooftop Solar Power Installations Drop 85%

The forecast for California’s solar power expansion is cloudy, with a good chance of pain.

Late in 2022, I reported that California utility regulators made significant changes to rules applied to the state’s rooftop solar market, saying that the moves will ensure solar-powered homes contribute their “fair share” to maintain the power grid. Basically, the California Public Utilities Commission ended the power buy-back scheme that was a big selling point for homeowners to purchase and maintain solar panels.

How incentivizing was that incentive? Quite…as rooftop solar power installations have dropped over 80 percent, and companies are fleeing the state.

Thousands of companies — including installers, manufacturers and distributors — are reeling from the new policy, which took effect in April and greatly reduced incentives that had encouraged homeowners to install solar panels. Since the change, sales of rooftop solar installations in California dropped as much as 85 percent in some months of 2023 from a year earlier, according to a report by Ohm Analytics, a research firm that tracks the solar marketplace. Industry groups project that installations in the state will drop more than 40 percent this year and continue to decline through 2028.

“The solar installations are off a ton,” said Michael Wara, a senior research scholar at Stanford Woods Institute for the Environment. “What’s happening right now is a painful adjustment process.”

Construct Sun, a solar installation company that is based in Reno, Nev., stopped doing business in California after its sales dried up four months after the policy began; executives said the company was now focusing its efforts on Florida, North Carolina and Ohio.

“I had a very dismal pipeline and had to make the decision to shut down in California,” Thomas Devine, executive vice president of operations for Construct Sun, said. He added that the state’s rooftop policies undercut its goal to effectively eliminate greenhouse gas emissions by 2045. “These competing policies are crazy,” he said.

The forecast for California’s solar power expansion is cloudy, with a good chance of pain. Over 17,000 solar jobs have been lost in 2023, which accounted for 22% of all solar jobs in the industry.

Based on interviews of residential solar installers across the state, CALSSA found that 59% of installers expect more layoffs ahead, and 63% expect to have cash flow issues over the next three quarters. About 70% expressed concern about their business outlook, while 43%, or about 300 businesses, said it will be difficult to remain in business.

To meet its clean energy goals, California needs to install 3.5 times as much solar and seven times as much energy storage as what is cumulatively installed today. With minimal demand, layoffs and business closures, it will be very difficult to meet these requirements.

Laughably, David Lappen (an electrical engineer who serves on a subcommittee of the Santa Monica Commission on Sustainability, Environmental Justice and the Environment), proposes that California taxpayers continue to foot the bill for incentives as a solution to this quite foreseeable collapse.

…Without incentives, though, it doesn’t make financial sense for most Californians to install rooftop solar, meaning we all get less of this badly needed common good. Instead of forcing private utilities to shoulder the costs of incentives, which they then pass through to rich and poor ratepayers alike, California itself should accept the responsibility of supporting rooftop solar.

I can almost hear the screams about high taxes, but hear me out. If we shift support for rooftop solar from utility bills to the tax base, Californians can save on their utility bills by as much as the state pays in incentives.

…In California, our state income tax is progressive: Those who earn more pay a higher percentage of their income for the public benefit. Electric utility bills, by contrast, are regressive: Those who can’t afford rooftop solar pay a larger share of their income for their basic necessities. We need to restore financial support for rooftop solar — but let’s do so equitably, through our progressive tax code, and redistribute the costs of clean energy away from California’s most vulnerable residents.

Proposing that the state shoulder another financial commitment will be a tough sell, particularly in a year of big deficits. But the world is running out of time to address climate change, and more rooftop solar will decarbonize our grid faster.

Such a solution will inevitably lead to more Californians leaving the state for another region that allows the free market to flourish and doesn’t base its policies on pseudoscience or “justice” narratives.

The population of California posted a decline of tens of thousands in 2023. Among them are some of the wealthiest Californians, who account for a sizable portion of the state’s tax base.

The state’s population dropped by about 75,400 over 12 months, bringing it to over 38.96 million as of July 1, the U.S. Census Bureau estimated Tuesday.


Donations tax deductible
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How does that work in sierra with back to back blizzards raging. Asking for the donner party.

The Gentle Grizzly | January 15, 2024 at 10:40 am

Imagine my shock and surprise.

“I’m shocked, shocked, to find subsidies going on here.”

Every time cuts for the subsidies for bird-choppers are proposed the AWEA shrieks that every single wind-power project will stop…and they are correct, since they are completely un-economical without the initial and on-going subsidies.

So are the solar panels which, despite improvements in efficiency, are still not economical ways to produce power. With a negative ROI no rational person would purchase them without the subsidies. Nor would any rationally-run power company.

No person is serious about “green” energy unless nuclear power is included as the primary source.

Economics 102: If government legalizes throwing bricks through windows there will be a surge in glass making and repair businesses.

Lower left corner of photo has tiny windmill. lol

Also what should not be forgotten is that home insurance companies are raising rates, or in some cases cancelling policies, for homes with solar panels.

The biggest take on this has to be “is there or has there ever been a market which has been made better with government intervention and control?”

    JohnSmith100 in reply to gitarcarver. | January 15, 2024 at 4:54 pm

    Assuming someone has space, it is better to do ground mounting. Thye should be washed twice a year that and other maintenance is far easier with the lower. My array is only 8′ high and the bottom of the panels are 3′. Panels are set at 45 degrees, so snow slides off. Those who get deeper snow should raise the height of the array.

Morning Sunshine | January 15, 2024 at 11:35 am

the solar company in my area (yes, one!) seems to have as their business model, as we have dealt with solar companies before, to jack up their PROFIT margin the amount of the subsidies.
so, say their cost is $500, and they charge $750 for installation. Then the .gov comes in and says that they will give a $250 subsidy. Well, suddenly, the cost of the installation is $1000. But then company says if you do so much, we can knock the price down do it equals $800 installation. So they look like good guys giving further discounts.

We would do solar again, if only for our own peace of mind….

    JohnSmith100 in reply to Morning Sunshine. | January 15, 2024 at 12:28 pm

    Same for me, but I have no interest in selling to power companies. They are all scams. Power companies want peoples peak power out for 8-12 cents an hour, them the sell it for 0.50 to 1.00.

    Better to store energy in LiFePo4 batteries, and to freeze ice, or maybe a brine for AC (chilled water) for off peak use and the same for heat storage.

      IndianaGuy in reply to JohnSmith100. | January 16, 2024 at 8:08 am

      This was forced on the power companies, don’t blame them. It’s a big chore to account for all the roof-top solar in the Grid Model.

    Dolce Far Niente in reply to Morning Sunshine. | January 15, 2024 at 12:47 pm

    So, is your system grid-tied or do you have a battery bank and inverter so you can actually use the power your roof generates?

    If the former, you are doing nothing more than renting your roof to the power company.

    We have two companies in my area that do solar installations. One is super flashy, does a ton of advertising and drives all EVs. The other is a company that’s been here for decades and pioneered the growth of solar in my state. The flashy company gets all the government contracts. When I bought my off grid house, I got a quote from both. The company with the government contracts quoted me twice the price. I laughed at them and went with the older company. They’d gotten so fat and stupid off government contracts, they assumed they could get away with price gouging ordinary homeowners.

      JohnSmith100 in reply to Sanddog. | January 15, 2024 at 5:01 pm

      I designed my system using hybrid inventers, they operate off or on grid. I bought them so that I can create an island private grid to accommodate more than one building and array.

Nothing says middle class ghetto as effectively as vinyl siding paired with solar panels.

surfcitylawyer | January 15, 2024 at 12:23 pm

We have a Tesla solar roof and are very happy with it. I only wish I had put in 2 Tesla battery packs.
First reason: When we moved in, the transformer that supplied power to our tract was unreliable. We lost power a number of times. One was when our younger son had a birthday party sleepover.
Second reason. A number of times, vehicles have taken out power poles that carry the electricity to our tract.
Third reason. Southern California Edison keeps raising the cost of power.
The tax credit just made the decision easier.

I thought they were mandatory on new construction.

I live in California and did the math.

Even WITH the subsidies, it wasn’t economical. Even if you PRETEND that the panels will produce the amount that they claim (most places you only get ~40%), and even if you PRETEND that they will maintain that level through their lifetime (they don’t, the amount they generate goes down significantly after just a couple years even if you clean and take care of them), then you never save enough to cover the cost of the panels before the expected end of their life and you have to pay FULL PRICE to replace them.

And that’s in Southern California, land of sunshine.

Rooftop Solar is the green virtue signaling of a few years ago. You’ll notice the far left has shut up about them recently, they’ve moved on to the electric car boondoggle.

    Olinser in reply to Olinser. | January 15, 2024 at 1:14 pm

    Oh, and it hasn’t been well publicized, but you’re going to start seeing more.

    If you go and try to sell a house with old solar panels, they are going to be part of the home inspection.

    So you are NOT GOING TO BE ABLE TO SELL YOUR HOUSE without paying full price to replace them (or pay to remove them, which is honestly almost as much).

    JohnSmith100 in reply to Olinser. | January 15, 2024 at 5:24 pm

    Hiring contractors make a solar system uneconomical. You can buy 5 year old panels that are pulled from power company upgrades for 25 cents a watt. Racking is way over priced, use UniStrut or SuperStrut, they are interchangeable. Ridged galvanized conduit is also useful for the superstructure 1.5-2-2.5-3″ and larger

If it were a good idea in the first place, they’d never have had to “incentivize” it.

All good grifts must come to an end.

I’m not in California, but Texas, and I don’t have solar panels but our friends on our street do, and I have watched their ‘pilgrim’s progress’ with fascination for several years now.

Their original installation cost somewhere around $20,000 as I recall. Let’s say that they got $7,000 in rebates between the state and the feds, so $13,000 net. My electric bill is roughly $100 a month on average so let’s say that they’re saving that $1200 per year. However, a 20 year loan at 2% costs that same $1,200. So: a wash.

However… a couple years ago we had a famous week-long grid outage. Their solar system helped not at all because they had no battery pack. So… they bought one and put it in their garage – those roughly cost $15,000 including installation. Now they’re behind just buying from the grid by roughly $1,000 a year.

BUT WAIT! There’s more! Because we live in Texas, our summer temperatures can be… ridiculous… Last summer during August, I saw 98 degrees inside my garage and so did our neighbors. Apparently battery banks cannot tolerate extended exposure to high temps …. so he had to install air conditioning in his garage. – roughly $10,000 and another $4,000 for installation.

In conclusion it’s actually costing him a couple of grand a year to go solar.

    smooth in reply to Hodge. | January 15, 2024 at 2:26 pm

    It takes 10 years to break even on install cost of system, which is about the time the warranty expires and things start to go wrong.

      ThePrimordialOrderedPair in reply to smooth. | January 15, 2024 at 7:17 pm

      There is no “break even” on solar electricity. The cost of solar (the actual whole installation) is more than the cost of utility electricity. Period.

      That is the price of a good amount of energy independence, though. If you have the money it’s well worth it, but solar is not something that one does for economic reasons. One only does solar (real solar) for independence. Solar COSTS money. For the government to try to give the opposite illusion is a Big Lie.

    JohnSmith100 in reply to Hodge. | January 15, 2024 at 5:31 pm

    Again, involving a contractor doubles or more the cost.

Subotai Bahadur | January 15, 2024 at 3:28 pm

I am amused and happy about this. If you own a home, it means that you have a certain amount of capital and the life habits to accumulate such. If you end up fleeing California for America, it means that you will bring some of that capital and those habits. You are likely to be a net positive for your destination.

California will be left with more and more of what they really want; hostile foreign invaders, criminals, druggies, and bums. Win-win for both sides.

Subotai Bahadur

ThePrimordialOrderedPair | January 15, 2024 at 4:47 pm

Since the change, sales of rooftop solar installations in California dropped as much as 85 percent in some months of 2023 from a year earlier, according to a report by Ohm Analytics,

The power buy-back scheme (it was criminal, really) allowed people to have pretend solar installations. They only needed to put the panels up. The local utilities were forced to buy the electricity during the day – when no one really needed it and, generally, the homeowners weren’t really home – and for the homeowners to pretend they were “solar”, when the fact is that a real solar installation requires a huge battery pack to store the electricity that is being harvested when no one needs it and then used later – when everyone is home from work and school and does need it. Of course, the batteries are some of the biggest expenses in solar installations – and some of the biggest hassles. With the buy back scheme the state allowed people to virtue signal solar on their roofs while not really having to fully invest in an actual solar installation. It made the cost of solar electricity seem to be a quarter of the cost it really is to the homeowner.

Now, solar electricity costs more but it has benefits. For those who have the money it is a worthy expenditure and really gives them a lot of freedom. But it is expensive (like running your own generator all day, every day) and the state has no business trying to fool people into thinking it’s cheaper than it is by saddling the local utilities with the unfunded mandate of serving as the solar installation’s “batteries” for the homeowner.

    The buy back scheme had been in place for decades. It just wasn’t a big deal for the electic companies to deal with since the lost cost of grid maintenance was almost zero. Now, it has become a big deal and the number of free riders on the system affects the bottom line and the grid.

    IIRC back during some of the huricanes it was a huge safety issue as people’s panels were still pumping out power on the the lines, while crews were trying to repair them.

I recall an entire subdivision built in CA with rooftop solar water heating- manufactured in Australia. And the instructions said quite clearly- take the latitude of the installation and tilt the panels that many degrees north. All the panels were installed to the provided installation instruction- facing North so they would do no good whatsoever.

But hey- all of them, every last on of them, was subsidized by the state before anyone with any actual knowledge of how solar worked caught the error.

And there was no one to fall back on to hold responsible. No one to be sued. Code enforcement officers approved all the installs.

    ThePrimordialOrderedPair in reply to gospace. | January 15, 2024 at 6:19 pm


    That’s awesome!

    rhhardin in reply to gospace. | January 15, 2024 at 6:36 pm

    Maybe they knew the geometric fact that the sun rises at the same place on the horizon in Australia as it does in the US. Only it travels northwards instead of southwards, is the only difference.

      ThePrimordialOrderedPair in reply to rhhardin. | January 15, 2024 at 7:10 pm

      The sun doesn’t really travel northwards or southwards. That’s the whole point of the definition of “latitude”. The sun is “in the south” in the northern hemisphere moving from south east to south west, and vice versa in the southern hemisphere.

      On top of that, CA and Australia each cover a lot of latitudes, so the amount of southern and northern angle the sun is at any site in either place can vary widely, so even that doesn’t really make sense. But you would hope that a solar installation “expert” would, at the very least, know which general direction in the sky to look towards if he wants to find the sun. You would think that your average man on the street should know that. Even moss know that!

    smooth in reply to gospace. | January 16, 2024 at 7:07 am

    CA building permit department, lifetime employment cant be fired, with kangaroos for diversity hires.

Industries which are only sustained by taxpayer subsidies do not deserve to exist in a democratic capitalist country.

Taxpayers should rejoice. Another useless project they don’t have to pay for but surely the californicators will come up with another scam.

I think solar panels and roofs are a great idea for grid failures and such. If you live far from power they make financial sense vs string poles to you. Otherwise, not so much.

    G. de La Hoya in reply to diver64. | January 16, 2024 at 5:59 pm

    30 years ago I heard and interview with someone that had interviewed elderly people about what they believed to be the greatest technology to come about in their lifetime. Expecting to hear things like ‘man on the moon’ type answers, the majority of the elderly answered “indoor plumbing and rural electricity”. 🙂

Incentives? Ya mean our tax dollars to subsidize, don’t ya?