Today, Explained - When solar power leaves you feeling burned

Episode Date: January 2, 2024

The potential of rooftop solar is being squandered. Time’s economic correspondent Alana Semuels reports a cautionary tale, and writer Andrew Moseman explains why the country isn’t ready for a solar revolution. This episode was produced by Hady Mawajdeh, edited by Amina Al-Sadi, fact-checked by Laura Bullard, engineered by Patrick Boyd, and hosted by Noel King. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

It's Today Explained. New year, new you, new me. Resolutions? Become a gym rat? Finally finish the power broker? Get solar panels? That one should be easy, right? This is a whole thing.

There are these door-to-door salesmen that go around knocking on doors all over the country. Fantastic, super easy, and no downside. A lot of them overpromise what the panels are going to do, and the panels then underdeliver. They sign people up for these loans that are not really great deals or that people can't necessarily afford. And they say to people, oh, you're not going to have an energy bill. Or the government is going to give you money to put solar on your roof. None of which are true. They didn't necessarily understand exactly what they were getting into.

We do want to understand what we're getting into. So coming up, a new homeowner, a scam, a grid under pressure, and a whole lot of renewable energy going to waste. BetMGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with a sportsbook born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love about BetMGM.

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My husband and I bought a house in Beacon, New York, and moved in in July. We were told that there was a leased solar system on the roof, which we were excited about. And we had called the company beforehand, and they told us, here's how you find out how much the panels were producing. We logged onto the site. It said they were producing a decent amount. And then we got a high energy bill. And it didn't seem quite right to me since we had solar panels on the roof. So I called the solar panel company, which did not respond. I called them again, and the person on the other line told me that they had actually been disconnected some time ago and were not even hooked up. So it was a solar lease, which is something that was really popular, you know, in the last 10 years. Over the past few years, the cost of solar panels have fallen by 60%. Solar installations have fallen by 60 percent.

Solar installations have increased by 500 percent. Every four minutes, another American home or business goes solar. It was basically the people had agreed to lease these solar panels for 20 years. And they had only done this like eight years ago or so. So when they sold us the house, they said, hey, can you take over this lease? We looked at it and said, this doesn't look like the greatest deal. How about we split it? So we each paid about $6,000 to split the remaining cost of the lease.

And the reason we did that is so that the company that owned the panels could keep maintaining them and make sure everything was fine. We just didn't really want to have to deal with that. The company that sold it to the previous homeowner went out of business and this is pretty common that the company that sold the solar panels initially goes out of business. A solar company has gone bankrupt leaving some customers here in West Michigan with systems that don't work. The solar panels are on the roof, but they aren't producing any energy at this home in Compton. Thomas Yagi of Kailua said he noticed one of his panels was not working, but the company he used is no longer in business. This system cost about $82,000, and right now it's not producing any usable energy.

Our lease had been taken over by this company called Spruce Power, and it's actually the largest privately held owner and operator of residential solar in America. Basically buying up all these leases across the country and collecting money from people and supposedly maintaining the panels. Hmm. But yours were not maintained. They were not maintained. It's still a little unclear what happened. They say that the previous owners had stopped paying the bills, and so they disconnected them. But they also sent a third-party repair technician to come, and he said he thought it was that squirrels had chewed on our wires. So something happened that made the panels not work anymore. I'm still a little

unclear on what it was. You write that one of the problems here was that the company that originally leased the panels to the other homeowner had gone out of business. How big of an issue is that? A lot of installers have either gone out of business or just kind of dabbled in installing for a little bit and then decided to do something else. I didn't know people would do you like this. There was one study from the National Renewable Energy Laboratory that estimated that about 8,700 different companies installed at least one residential solar system between 2000 and 2016, and only about 2,900 were still active by 2016, and that number is probably even a little bit smaller now.

I don't expect it's fair for me to pay a company that didn't finish the job. So you had thousands, literally thousands of companies that did this, maybe on one roof, maybe on 100 roofs, and then stopped doing it or went out of business. There's the cost of the financial pieces of it, but then just the stress of all the rest of it, too. It's been a lot. Eventually, I would imagine Spruce Power fixed your solar panels. You had, in fact, paid for them, right? So you've given them the money. What are they giving you?

Right. We've given them the money for the next 12 years, supposedly. They basically ignored me at first until I said I was a reporter. Ha! Nice trick. Yeah, I wish everyone could use that trick. After letting Spruce know he was talking with the I-team, Phelps says a crew came out and fixed his blacked-out panel. Then they sent the repair company. The repair guy came, climbed up on the roof, said, I can't fix everything. I'm going to have to come back. Then another repair guy came back at 6 in the morning and still couldn't fix it. So most of them are working now. And Spruce gave me some money back for the months that they didn't work.

To my knowledge, they have not given any money back to the previous homeowner. So what you and your husband experienced in Beacon was terrible. Let's pull back from the terrible to talk about how common this is in the United States broadly. How many people in the U.S. have these rooftop solar panels on their homes? So around 4 million U.S. homes have rooftop solar. That's up from about 300,000 a decade ago. So I started looking up some of these solar companies, including Spruce, and was really surprised to find that they, a lot of them have Fs from the Better Business Bureau. Harness Power has a slew of negative reviews on Yelp after customers claimed they were left with inoperable solar systems. This review says they took my down payment

seven days before they closed their doors. And if you go online, you find these threads on Reddit and these groups on Facebook of people who are just really upset about their experience having solar panels installed on their roof. And one common thread, the inability to get in touch with Spruce. The complaints say things like awful to work with, cannot get a live body on the phone.

And since the Spruce company took over, it has been a nightmare. Lots of different companies, lots of people from all over the country. And I was just really shocked at how many people were having this problem. And some of the stories were just even worse than mine. The FTC has this database where you can complain about what you think is fraud or, you know, shady business. And there were 5,000, more than 5,000 complaints containing the words solar panels submitted on reportfraud.ftc.gov in just the first nine or so months of 2023. And that's up 31 percent from 2022 and 746 percent since 2018. And that's just people who complain to the government. You know, there are people that maybe did not go through that step but are still having problems.

Why do so many people have solar panels and why are so many people having problems with their solar panels? So there's the appeal of going green, but I think more so there are some decent financial incentives to do this. We're telling the tax credits to do it. That's what they do. You can afford to do this? We can give tax credits to do it. That's what they do. You can afford to do it. The Inflation Reduction Act, for instance, extended a 30% tax credit, basically, so you could deduct 30% of the cost of the panels from your taxes. It'll bring down the cost of installation by about $7,500.

And when you get to keep savings money on your electric bills for the remainder of the years, about $300 a500. And when you get to keep savings money on your electric bills for the remainder of the year, it's about $300 a year on average. And so that really cut down on the costs and made people think this is a good deal at the same time that electricity and power prices were really soaring, but also just because the grid is old and utilities have to spend a lot of money upgrading it, and power just gets more expensive every year. Are there cases, Alana, in which it is a good idea to put solar panels on your roof? I mean, everything you've told us makes it sound like it's simply a bad idea.

You've got shady salespeople. You've got companies that go out of business. You've got other companies buying up the leases that don't actually want to do the work. What is the argument for doing this? I don't want to sound like I'm anti-solar because I think it's really important, and there are people who have solar on their roofs that are very happy with it. You know, go with a company that someone else that you know has gone with and been happy with. Don't buy anything from someone who knocks on your door or calls your phone randomly that you didn't know. But, you know, I had a neighbor actually in Beacon who got rooftop solar installed on his house.

And he said they were going to pay themselves off in about seven years. And from then on, he was basically just going to get free electricity. And I think people are very happy with them if they kind of made this decision on their own, did a lot of research and figured out whether this was a good deal for them or not. The people that kind of maybe decided at a whim or were told something that was not true are a little less happy. Alana Samuels, she's a senior economics correspondent at Time magazine. Coming up with the caveat that Today Explained loves the renewable energy revolution. There's been an unexpected consequence, too much energy. You have to hear it to believe it. So stay tuned. Thank you. unlimited photos and videos directly from your phone to the frame. When you give an AuraFrame as a gift, you can personalize it, you can preload it with a thoughtful message, maybe your favorite

photos. Our colleague Andrew tried an AuraFrame for himself. So setup was super simple. In my case, we were celebrating my grandmother's birthday and she's very fortunate. She's got 10 grandkids and so we wanted to surprise her with the AuraFrame. And because she's a little bit older, it was just easier for us to source all the images together and have them uploaded to the frame itself. And because we're all connected over text message, it was just so easy to send a link to everybody. You can save on the perfect gift by visiting AuraFrames.com to get $35 off Aura's best-selling Carvermat frames with promo code EXPLAINED at checkout.

That's A-U-R-A-Frames.com, promo code EXPLAINED. This deal is exclusive to listeners and available just in time for the holidays. Terms and conditions do apply. Support for this show comes from the ACLU.

The ACLU knows exactly what threats a second Donald Trump term presents. And they are ready with a battle-tested playbook. The ACLU took legal action against the first Trump administration 434 times. And they will do it again to protect immigrants' rights, defend reproductive freedom, fight discrimination, and fight for all of our fundamental rights and freedoms. This Giving Tuesday, you can support the ACLU. With your help, they can stop the extreme Project 2025 agenda. Join the ACLU at aclu.org today. Today Explained, we're back. I'm Noelle King. Andrew Mosman is an editor at Caltech. He recently wrote a piece for The Atlantic about the problem of renewable energy. The problem that I became interested in is the idea that we're trying to do this big buildup of renewable energy, especially solar, to reduce the amount of fossil fuels that we're using.

But a lot of what we're already making is going to waste. This is kind of happening at two different levels. There's sort of the big power company utility level. Think about a big solar farm out in the desert like we have here in California. At certain times of the day, we're already making so much solar energy that we can't even use it all. And so some of those solar panels are simply turned off. We can't get it to other places where it might be used. And it means the potential of a lot of the solar infrastructure we already have is simply going to waste.

And then on the flip side, there's also the scale of an individual home with solar panels. What's happening is you're starting to see a pushback against some of the incentives, economic incentives that allow people to do that in the first place. This generally happens through an effect that's called net metering. And what that means is if you've got a big setup of solar panels on your home that allow people to do that in the first place. This generally happens through an effect that's called net metering. And what that means is if you've got a big setup of solar panels on your home and it's sunny out, you're not using a ton of energy at your house, you might be able to make more solar energy than you're consuming. At which point, if you're connected to the grid,

you can just sell that back to the grid. The way that that's typically worked is you make back the exact amount you would have paid per kilowatt hour for energy. Now that more and more people are getting solar on their rooftops in more and more states, you're starting to see governments and power companies push back against that, trying to reduce the amount of money that people get paid for selling their own solar back to the grid. Because there's too much. Is that right? Well, that's part of it. It's a complicated issue.

There's technical infrastructure issues, yes. When you can sort of have a grassroots distributed energy system of all of us making our own energy, it does get more and more complex to figure this all out. And so until we overcome the problem of permitting reform, of building transmission lines, allowing new power plants of any kind to be built, we're not going to get to that promised land of having a clean energy superpower. We're going to be stuck really with the kind of assets we have now. There's also a flip side, which is sort of a political argument. And what you'll normally hear in this case is basically an argument of fairness, which

is if you have solar panels, you're not only not paying the power company for energy, you're not paying for the upkeep of power lines, the grid infrastructure, basically all the maintenance fees that's built into the power bill that the rest infrastructure, basically all the maintenance fees that's built into the power bill that the rest of us pay at the end of the month. Those poor people struggling, some of them in subsidized housing, trying to put food on the table and still pay the light bill, they don't need to subsidize solar panels for those who can afford to have them. And therefore, as more and more people get solar, more and more of the burden is going to be placed on everybody who doesn't have it.

Gosh, that's really interesting. So when I get my power bill in the mail, this had never occurred to me. I'm not just paying for the electricity that I use. I'm paying also to support the electrical grid, to improve the electrical grid, to keep it working. Okay, so California, the state from which you wrote this piece, the state that you were focused on, it has two problems. There's too much solar power, and the people who are getting solar power and selling it back to the grid, they aren't kicking in their quote-unquote fair share. How is the state of California responding to those two problems?

Well, we'll start with the latter because that's sort of the most pressing one right now, which is despite having been one of the leaders in the rooftop home solar industry, California is really putting on the brakes right now. A decision by the California Public Utilities Commission will make it much more expensive to get rooftop solar starting on April 15th. The new rules that the Public Utility Commission put out slash the amount of money that people can get paid for net metering by about 75 percent. Under the new plan just approved, homeowners who install solar can expect to save $100 a month on their electricity bill, paired with battery storage, $136 a month. So everybody else who, you know,

has already had them for years, has grandfathered in, they, you know, in perpetuity probably are going to be making that sort of retail rate of electricity. Current solar panel owners pay or save based on the power they generate. And in many cases,

they don't have to pay anything because their solar panels absorb enough sunlight to cover their entire bill. And owners even get paid by the utility companies if they generate excess power. But now, if you go and put solar panels on your house, you're getting paid a fraction of that, a quarter of that, if these new rules go into effect.

Because of this, you've already seen a huge slowdown in the number of new homes getting panels because without net metering or with a much lower rate of net metering, it's just going to take you much, much longer to recoup the major investment of putting that in. The market in real time under the new net metering is 80% below where it was last summer. So California is a sunny state. It creates a lot of power through solar sources. Too much of it, in fact, as you've laid out. Why can't it send it over to, I don't know, Washington State, famously rainy? What's preventing California from sending its excess electricity there? Well, Washington state doesn't necessarily need it because they have a ton of hydropower. So they're actually doing okay on renewables. They have one of the greenest grids, actually. But your point stands. So basically what stands in the way of doing this is that it's insanely

hard to build power infrastructure. Building something across such a vast distance requires too many stakeholders to be in line. Landowners, governments, power utilities. When you cross state borders, you're dealing with a new power bureaucracy. That's just where we are. The Biden clean energy build-out is putting out funds for and calling for more transmission lines to be able to do this, to get renewable energy where it needs to go so it's not wasted. It's just an insanely difficult thing to do politically. I want to join my other colleagues talking about bipartisan permitting reform. It's something we have to do in order to achieve whatever the future looks like in terms of green energy, it's going to require building things. We have to talk about permitting reform in a reasonable period of time to get

things done. Is California the only state having this problem? We have too much solar energy? No. I don't know the stats on some of the other states, but Texas has the exact same problem, but primarily with wind. The reason is obvious if you start to think about it. You know, the place you'd build big wind farms to take advantage of the breeze on the high Texas plains is way out west where there's not a lot of people and there is a lot of land. But that means that you've got to get all that energy

across the state to, you know, San Antonio, Austin, Houston, Dallas, where all, you know, the majority of the people are, the majority of the energy is going to be used. And so at varying points, Texas has had this exact same problem. They had it 20 years ago when they first made a big push into wind. And the legislature actually did manage to sort of come together and create these special zones for new lines to be built. And they managed to sort of solve the problem then. But those lines they built then can't handle the amount that they've got now. And so they're coming back around at the same problem. Washington state is good. It has the hydropower. California has too much solar. Texas has too much wind power.

Did we just move too quickly on the clean energy transition without first asking, what are we going to do with all of this clean energy? I wouldn't say that, no. There is something to that, obviously, since we're talking about having built out more capacity than we can use. But I wouldn't say that. For one thing, it's not all of the time. Summertime here in California, because of the energy demand for AC and stuff like that, you're not seeing that same effect where 10% or more of the solar energy is getting wasted because we just need it. And at the end of the day, I think it's sort of a cart before the horse question. It's like, yeah, we need all this extra renewable energy capacity to fix our energy sector and move it to renewables. And in order to take advantage of that stuff, we also need to build out

our grid infrastructure and really get more sophisticated in the way that we do it. I don't see the argument that we should sit around and wait for the ladder, for the grid to get fixed first, because that's so insanely difficult. I think it makes sense for us to just to push, to build the solar and the wind capacity that we need. And then if we get to that point where, you know, like we're talking about here, we're like, oh, my God, we're doing this. But some of it's going to waste. a lot of it's going to waste. Well, then maybe that's the motivation to actually do the big, hard, expensive problem of fixing our power grid. That was Andrew Mosman of Caltech and The Atlantic. Today's show was produced by amateur ceramicist Hadi Mouagdi, whose resolution is to sell some of his work this year.

It was edited by Amin El-Sadi, who has resolved to read 24 books. It was engineered by Patrick Boyd, who, like me, is resolving to Jim Ratt in 2024. Laura Bullard, fact checker, angel, neither has nor needs any resolutions. The rest of our team includes Halima Shah, Miles Bryan, Avishai Artsy, and Victoria Chamberlain. My co-host is Sean Ramosfirm. Our managing editor is Matthew Collette, who's resolving to spend more time on Twitter. Our executive producer is Miranda Kennedy. We use music by Breakmaster Cylinder and Noam Hassenfeld, and we're distributed to public radio stations across these United States in partnership with WNYC in New York. I'm Noelle King. Today

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