California is making rooftop solar panels compulsory on new homes from 2020. But some economists are sceptical

A solar panel being fitted on a San Francisco rooftop. Image: Getty.

More California rooftops will soon sport solar panels, partly due to a new state mandate requiring them for all new houses and low-rise residential buildings by 2020.

This rule immediately sparked lively debates. Even experts who generally advocate for solar energy expressed skepticism that it was actually a good idea.

As an environmental economist who studies the design of environmental policies, I believe that doing something about climate change is important, but I don’t consider this new solar mandate to be the best way to achieve that goal. I’m also concerned that it could exacerbate problems with California’s housing market.

More than two sides

You might expect the debate over this policy, which became official when the California Energy Commission unanimously voted in favor of it on May, to pit two well-defined camps against each other.

Environmentalists who prize fighting climate change might love it due to a presumption that increasing the share of power California derives from solar panels will reduce greenhouse gas emissions by cutting demand for natural gas and coal.

On the other hand, those who question whether the costs of addressing climate change are worth it might hate the solar mandate, since they either see no benefits or think the benefits aren’t worth the costs.

But there are more than two sides.


Environmental economics 101

Many renewable energy experts, including economists like me, want governments to do something to address climate change but question the mandate.

University of California, Berkeley economist Severin Borenstein summed up this take in his open letter to the California Energy Commission opposing the rule. University of California, Davis economist James Bushnell also opposes the mandate for similar reasons.

Above all, what we economists call “command-and-control policies” like this mandate – inflexible requirements that apply to everyone – often don’t make sense. For example, going solar is less economical in some cases. Even in sunny California, builders can construct housing in shady areas, and not all homeowners use enough electricity for the investment to pay off before they move away.

The mandate does have some exemptions tied to shade and available roof space, but there could property owners subjected to the requirement to own or lease solar panels who might consider it unreasonable.

We tend to think that “market-based policies” would work better. By relying on incentives instead of requirements, people get to decide for themselves what to do.

Good examples of these policies include a tax on pollution, like British Columbia’s carbon tax, or a cap-and-trade market, like the European Union’s Emissions Trading System. Instead of restricting the right to pollute, these approaches make people and businesses pay to pollute, either through taxation or by buying mandatory permits.

The flexibility of market-based policies can make meeting pollution reduction goals cost-effective. When people – or businesses – have to factor the costs of pollution into their decision-making, they have a financial incentive to pollute less and will find ways to do so. By reducing pollution as cheaply as possible, more money is left over to spend on other pressing needs like housing, health care and education.

This advantage is not merely theoretical. By many accounts, market-based policies have successfully worked according to theory, including the U.S. sulfur dioxide trading program and the EU’s carbon trading program.

California itself has a cap-and-trade market. I believe that expanding and improving it would cut carbon emissions more cost-effectively than the solar mandate would.

Many economists also fear that the mandate will worsen California’s housing unaffordability. This crisis has many causes, such as restrictive zoning regulations that curtail construction. But the solar-panel requirement, which could increase the cost of a new home by more than $10,000, probably won’t help, even though supporters of the policy argue that the solar panels will pay for themselves in terms of lower monthly electricity costs.

The solar mandate’s fans

The solar mandate’s defenders, including Goernor. Jerry Brown and Sierra Club leader Rachel Golden, make several arguments – two of which I find credible.

The first is what I’d call the “Panglossian” argument, after the character in “Candide,” Voltaire’s 18th-century classic satire. In what Voltaire would call “the best of all possible worlds,” taxing carbon would make perfect sense.

But this is a world riddled with political obstacles that make enacting almost any climate policy next to impossible. If a big American state can enact an imperfect law like this mandate that might do some good, then it should go for it.

The other argument I find reasonable is that by drumming up more demand, the solar mandate will expand the solar panel market – thereby driving solar costs down, perhaps more quickly than a carbon tax would. There’s some evidence supporting the theory that these mandates can spur innovation in renewable electricity technologies.

If the mandate works out, it might address two issues at once: shrinking California’s carbon footprint and bolstering technological progress in the solar industry.

To be sure, the cost of residential solar panels has plummeted in recent years, although generating solar energy through rooftop panels remains less cost-effective than power from utility-scale solar farms.

A practical policy

After mulling all the various arguments made by these different camps, I don’t think that whether California’s rooftop solar mandate is the perfect policy for the climate or the state’s homebuyers is the question.

The answer to that question is a resounding no – but that is beside the point because no policy is perfect. The key question is whether this policy – given its imperfections and given the difficulty in passing more cost-effective policies – is a winner overall. That question is harder to answer.

The ConversationUltimately, I believe the mandate will yield some environmental benefits, though they could be more cost-effectively achieved through other means.

Garth Heutel, Associate Professor of Economics, Georgia State University.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Covid-19 is highlighting cities' unequal access to green space

In the UK, Londoners are most likely to rely on their local park for green space, and have the best access to parks. (Leon Neal/Getty Images)

As coronavirus lockdowns ease, people are flooding back to parks – but not everyone has easy access to green space in their city.

Statistics from Google show that park attendance in countries across the globe has shot up as people have been allowed to move around their cities again.

This is especially true in urban areas, where densely populated neighbourhoods limit the size of private green space – meaning residents have to go to the park to get in touch with nature. Readers from England can use our interactive tool below to find out how much green space people have access to in their area, and how it compares to the rest of the country.

 

Prime Minister Boris Johnson’s announcement Monday that people are allowed to mingle in parks and gardens with groups of up to six people was partially following what people were doing already.

Data from mobile phones show people have been returning to parks across the UK, and also across Europe, as weather improves and lockdown eases.

People have been returning to parks across the world

Stay-at-home requirements were eased in Italy on 4 May, which led to a flood of people returning to parks.

France eased restrictions on 1 May, and the UK eased up slightly on 13 May, allowing people to sit down in public places so long as they remain socially distanced.

Other countries have seen park attendance rise without major easing of lockdown – including Canada, Spain, and the US (although states there have individual rules and some have eased restrictions).

In some countries, people never really stopped going to parks.

Authorities in the Netherlands and Germany were not as strict as other countries about their citizens visiting local parks during lockdown, while Sweden has famously been avoiding placing many restrictions on people’s daily lives.


There is a growing body of evidence to suggest that access to green space has major benefits for public health.

A recent study by researchers at the University of Exeter found that spending time in the garden is linked to similar benefits for health and wellbeing as living in wealthy areas.

People with access to a private garden also had higher psychological wellbeing, and those with an outdoor space such as a yard were more likely to meet physical activity guidelines than those without access to outdoor space. 

Separate UK research has found that living with a regular view of a green space provides health benefits worth £300 per person per year.

Access is not shared equally, however, which has important implications for equality under lockdown, and the spread of disease.

Statistics from the UK show that one in eight households has no garden, making access to parks more important.

There is a geographic inequality here. Londoners, who have the least access to private gardens, are most likely to rely on their local park for green space, and have the best access to parks. 

However the high population in the capital means that on the whole, green space per person is lower – an issue for people living in densely populated cities everywhere.

There is also an occupational inequality.

Those on low pay – including in what are statistically classed as “semi-skilled” and “unskilled” manual occupations, casual workers and those who are unemployed – are almost three times as likely as those in managerial, administrative, professional occupations to be without a garden, meaning they rely more heavily on their local park.

Britain’s parks and fields are also at significant risk of development, according to new research by the Fields in Trust charity, which shows the number of people living further than a 10-minute walk from a public park rising by 5% over the next five years. That loss of green spaces is likely to impact disadvantaged communities the most, the researchers say.

This is borne out by looking at the parts of the country that have private gardens.

The least deprived areas have the largest gardens

Though the relationship is not crystal clear, it shows at the top end: Those living in the least deprived areas have the largest private green space.

Although the risk of catching coronavirus is lower outdoors, spending time in parks among other people is undoubtedly more risky when it comes to transmitting or catching the virus than spending time in your own outdoor space. 

Access to green space is therefore another example – along with the ability to work from home and death rates – of how the burden of the pandemic has not been equally shouldered by all.

Michael Goodier is a data reporter at New Statesman Media Group, and Josh Rayman is a graphics and data visualisation developer at New Statesman Media Group.