California's Midday Solar Surplus Should Power Our Manufacturing Future

This isn't from a formal study. It's what I'm seeing as someone watching California's energy policy unfold in real time.

Every spring day between 10 a.m. and 2 p.m., California throws away perfectly good solar electricity. Power that ratepayers funded. Or worse, we pay Arizona to take it.

In 2024, California curtailed (threw away) 3.4 million megawatt hours of solar and wind power. That's a 29% increase from 2023.^[1] It's enough electricity to run more than half a million homes for a year. Energy consultant Ron Miller calculates the retail value exceeds $1 billion annually.^[2]

The state's response to this abundance? Punish the solar investors who created it. NEM 3.0 slashed compensation for rooftop solar by 75%.^[3] Utilities push for super off peak rates during midday. They blame solar owners for high electricity prices.

This has it backwards. California doesn't have a solar problem. California has an imagination problem.

Where Your Electricity Money Goes

Arizona's largest public utility made $69 million last year buying California's surplus power at rock bottom prices. They passed those savings to Arizona ratepayers as bill credits.^[2]

When we can't give power away, we curtail it. Solar accounted for 93% of all energy curtailed in CAISO in 2024.^[1] On some days, more than half the available solar power goes to waste.^[2]

"This is all being underwritten by California ratepayers," energy consultant Gary Ackerman told the Los Angeles Times.^[2]

The Public Advocates Office claims rooftop solar creates an $8.5 billion "cost shift" to non solar ratepayers.^[4] But energy economist Dr. Richard McCann found the opposite. His analysis shows rooftop solar actually saved all ratepayers $1.49 billion in 2024.^[5]

A Simple Idea: Use the Power to Build Things

What if California offered free midday power to companies willing to manufacture batteries and solar panels here?

Why Battery Manufacturing Fits

Not every industry can run on intermittent power. You can't start and stop a steel furnace when clouds roll in.

But battery manufacturing has a process called formation cycling. It's the initial charge and discharge cycles that condition new cells. It accounts for about 17% of factory energy use.^[9] And it's flexible. You're using electricity to charge and discharge batteries repeatedly. Whether you do that at 10 a.m. or 10 p.m. doesn't change the product.

The only continuous requirement is humidity control for dry rooms, which uses about 10% of facility energy.^[10] That's manageable with standard grid power.

Solar panel manufacturing is trickier. Polysilicon production requires furnaces at 1,100 to 1,400 degrees Celsius running continuously.^[8] But downstream operations like module assembly are flexible. Focus on battery factories as the primary absorbers. Add solar module assembly as a complement.

The Math Works

California's industrial electricity rates run 184% higher than the national average.^[11] That's why manufacturers go elsewhere.

But during curtailment periods, wholesale prices drop to negative territory. Spring peaks see median prices of negative $17 per MWh in Southern California. Some localized prices hit negative $150 per MWh.^[12] California experienced 1,180 hours of negative pricing in 2024. That's double the 530 hours in 2023.^[11]

California still can't beat Texas on labor costs. Texas commercial rates average 9 cents per kWh compared to California's rates at roughly double that.^[13] But California gains advantages Texas can't match:

• California is the largest U.S. market for batteries and solar panels. Manufacturing here eliminates shipping costs.
• The Salton Sea lithium projects could supply raw materials nearby.
• "Made in California with 100% solar power" matters to buyers who care about sustainability.

The federal 45X tax credit provides $35 per kWh for battery cells and $10 per kWh for modules.^[14] That applies in any state. Layer free midday power on top and California becomes competitive.

The Policy Tools Already Exist

San Diego Gas & Electric's Economic Development Rate program offers 12% discounts for new loads of 200kW or more.^[15] Southern California Edison offers 12 to 30% discounts.^[15] Expand this for manufacturers who concentrate load during surplus hours.

California's 21 Community Choice Aggregators have secured more than 21 gigawatts of new clean energy through long term contracts.^[16] They could develop industrial surplus programs for qualifying manufacturers.

The California Infrastructure and Economic Development Bank provides loans of $1 to 65 million at 30 year terms for manufacturing.^[17] The Central Valley has 157 Opportunity Zones offering capital gains benefits.^[18]

The Department of Energy now requires Community Benefits Plans for all Infrastructure Law and Inflation Reduction Act projects. These account for 20% of technical merit review.^[19] Local hiring requirements and community allocations are becoming standard.

No new legislation required. Just regulatory will.

The Alternative Is More of the Same

Without change, curtailments keep rising. Wind and solar capacity grew from 9.7 GW in 2014 to 28.2 GW by end of 2024.^[1] The waste grows with it.

Utilities keep pushing to devalue solar. California's electric rates are roughly twice the national average. Rates at Southern California Edison and PG&E increased 51% over three years.^[2] The pressure to blame someone will intensify.

California imports batteries from Georgia and solar panels from Asia. Jobs go elsewhere. Economic value flows out of state.

Residents who invested in rooftop solar watch their investment erode. They did exactly what the state asked. Policy punishes them for the success of the transition they funded.

Put the Sun to Work

California has more solar power than it can use during midday hours. That's not a problem. It's an asset.

Right now we treat it as a liability. We curtail it, export it at a loss, and use its abundance to justify punishing the people who made it happen.

There's a better way. Use that power to build things. Create jobs. Keep the economic value in California. Protect the solar owners who funded this transition.