I see at least two flaws (I suspect more but will hold off on speaking about them until I know more about how this is being rolled out) in this approach.
The Carbon API goes by generation on the grid...
so that will take into account solar, nuclear, wind, etc. as well as if the demand is high and they need to fire up peakers to hit more demand. Peakers of different types have different carbon intensity scores - so they weight it depending on what's running at the time to satisfy the demand (Coal would add much more than natural gas, for instance, and there's some amount of battery capacity out there as well). It doesn't really look at demand side - as they are making the assumption that the coordinators will fire enough generation to satisfy the demand.
Thank you California Grid for making me know all of this ><
So yeah, you are right, if everyone in the world shifts to just doing updates in the middle of the day, the coordinators would need to fire up more generation to account for that, but the carbon intensity would adjust based on the new running assets and some other time of day would now potentially have a lower carbon intensity so the API would reflect that and the updates would track and shift that way, ideally it all kind of settles out.
I'd also point out - for most areas, especially Texas - retail Wind generation greatly outpaces solar generation, close to 3:1, and in the US overall hydro is still huge (around twice as much hydro retail generation as solar). Wind generally runs late night and peaks very early AM time period (and tends to wane just before solar starts to ramp up), so it doesn't really overlap with solar too much. And nuclear isn't insignificant: it still provides close to 20% of our national power. So there are a lot of carbon-neutral generation sources other than just solar out there; solar is just the one most residential folks are familiar with.
The thing I worry most about: for those of us with crappy Time-of-Use rates, what if the lowest carbon intensity starts to track to the most expensive electrical rate?