PG&E and Solar

Understanding how (and why) PG&E Quietly Subsidizes Solar

PG&E and Solar

Understanding How (and Why) PG&E Quietly Subsidizes Solar

Most everyone considering solar understands that the Federal Tax Credit is a compelling reason to install solar; it’s like getting an additional 30% off of whatever final price you’ve negotiated for your installation. But there are other subsidies here in PG&E territory that can be just as important when deciding whether to go solar. This site will examine these subsidies.

Why does PG&E want customers to add solar?

PG&E is a business, but it’s an unusual one. Beginning in 1982, the California Public Utilities Commission — the agency responsible for looking out for customers’ best interests — eliminated PG&E’s right to make profit on electricity sales. Instead, profit could only be made on agreed-upon investments, and accomplishments.

This is a radical concept. Gone are the days when PG&E might give away space heaters to drum-up electrical consumption. Instead, four years ago PG&E was incentivized to give away one million compact fluorescent bulbs — to reduce energy consumption.

Right now PG&E is in the middle of a multi-year program to convince homeowners to add solar panels to their homes. If PG&E succeeds, the utility will be rewarded by being allowed to raise rates on its remaining customers, thereby increasing profits for its shareholders.

Incentivizing customers not to consume might sound like a program destined to fail, but
California’s effort is a great success story. While U.S. per-capita electrical consumption is up about 50% over the past 40 years, California’s per-capita consumption has been flat.

Use the links to the right to learn more — viewing them sequentially will make the most sense.

Contact me at, to ask questions, or to share your own thoughts.


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