If renewable energy is so great, why does California pay so much for its electricity?
This is the question you need to ask – the one that reveals America’s most uncomfortable energy truth. California people pay 35 cents per kW-hour For electricity, while Iowans, despite generating almost twice as a great part of renewable energy, enjoy 14 cents,
This contradiction suggests that the energy crisis of California stems not from clean power, but from the terrible policy options, regulatory captures and the brutal economics of being first.
The number destroys traditional knowledge. Eight states generate more renewable electricity than 38 percent of California, and all of them maintain rates below. National average 17.47 centsIowa goes with 65 percent renewal at the cost of less than half of California. The South Dakota receives 62 percent renewable generation and its rates pay just 14.34 cents. The state of Washington is capable of keeping rates at 13.67 cents, with 78 percent renewable power from heritage hydroelectric dams.
What does this contradiction explain? Start with California’s initial-adopter penalty. When the state made renewable adoption mandatory in the 2000s, the cost of solar panels Ten times their current pricesThe state essentially bought energy equal to $ 4,000 flat-screen television that now sells in $ 400.
Power procurement agreements signed between 2007-2010 have shut down rateds in up-market prices for decades-the cost that today manufactures renewable, just just just survives. The cost of solar infrastructure has increased to 82 percent since 2010But California is shaking the prices of yesterday.
The policy reduces the design loss. California made specific techniques compulsory through solar carvings and roof requirements instead of finding solar carved electrons. While the wind turbines of Iowa receive 40 to 45 percent capacity factorCalifornia doubled on solar panels working on 20 to 25 percent efficiency, required 13.4 Battery Gigawatt To keep the lights after sunset.
The three investor-owned utilities of the state-PG & E, SCE, and SDG & E-are 70 to 85 percent increased since 2019Yes, $ 27 billion in wildfire mitigation cost There is also injury, but it is only part of the story. These utilities earned a guarantee of 8 to 12 percent on capital investment, giving the grid incentive for gold-plates. Meanwhile, the rural electric cooperative societies of Iowa work without profit margin, saving members directly.
The regulator of Sacramento makes the labyrinth case worse. California Public Utilities Commission oversees the investor -owned utilities while 25 community option aggters work under various rules. This creates a balconyized system where the cost is a change between customer classes. Rooftop Solar Owner – Mainly Rich House Owners – Avoid paying for grid maintenance, while residents of apartments subsidize their green properties. A California legislative analyst report It was found that this cost shift adds $ 200-400 per annum bills to non-lore customers.
The political establishment in California chose the most expensive path for clean energy. Instead of learning from the market-based perspective of Texas, the MLAs of California created a more renewable capacity at a low cost. They require utilities to purchase specific technologies, to meet the time limit and satisfy many stakeholder interests. Each requirement added the cost without adding value.
The expansion of leadership failures is beyond the policy design. When the rates exploded, politicians blamed the utilities, ignoring their role in creating a regulatory structure. The administration of the Governor Newsom approved the utility rate, while making the electrification of heating and transport simultaneously – forcing consumers to buy rapidly expensive products.
The tragedy is that the experience of California discredits renewable energy when real criminal implementation is done.
Nevada produces almost identical percentage, but rather than expensive roof installations focuses on the solar fields on utility-focus and keeps rates at 13.32 cents.
Oklahoma balances 42 percent wind production with natural gas backup, which attains 12.94-per cent rates through market competition rather than mandate.
The California crisis provides three important lessons for federal policy makers. First, time matters a lot. Early adopted innovations pay the premium while late adopters take advantage. Solar is now 56 percent lower than fossil options on utility-mammanaBut California remains closed in contracts signed when solar coal was seven times as expensive.
Second, technology-plate policies defeated the policies that choose the winners. The states that succeed with renewal allowed economics to determine the mixture – air in iowa, hydro in Washington, utility solar in Nevada. The solar mandate of California ignored its wind resources and forced expensive storage solutions.
Third, the market structure matters more than renewable percent. Regardless of the mixture of generation in public power and cooperative utilities, consistent rates are consistently distributed compared to investor -owned utilities. The federal policy should not only address the sources of generation, but to address utility benefits.
California Demand for 76 percent more electricity projects by 2045Nevertheless, current rates already discourage electrification. The state is showing how to implement the clean energy policy. Renewable energy is not about contradiction technology; It is about giving profits from politics, time and infection.
President Trump and Congress should pay attention: The time of renewable energy has come. Now we have renewable energy and energy storage options, similarly our televisions are better today and spent a fraction of what they did a decade ago.
Dr. Mark Macnis Jim Moran, Florida State University, is the director of social and permanent enterprises at the College of Entrepreneurship and the author of “” “”.CEO’s mentality reset,
