Falling solar prices spurred the author of “California’s Solar Rooftop Experience: An Update” to revisit an earlier economic review on the merits of implementing residential rooftop solar systems in California. As before, his analysis includes not only the costs and benefits for the solar adopters but also for the electricity providers, the government, and the environment.
The author finds that the environmental gains from rooftop solar are now much closer to passing a cost-benefit test than they were when he did a similar analysis based on 2010 prices, and makes the case that current solar panel prices make solar subsidies no longer necessary. He also argues that the hidden costs solar adopters impose on electricity providers need to be addressed and proposes that regulators should restructure electricity pricing by splitting it into two components—an access fee and a usage fee.
The Takeaway is a publication of the Mosbacher Institute for Trade, Economics, and Public Policy at the Bush School of Government & Public Service at Texas A&M University.