Calif. mulls putting a damper on residential solar industry
SACRAMENTO, Calif. — California regulators have proposed big changes to the state’s booming residential solar industry, including cutting the discounts homeowners with rooftop solar and storage systems get on their electric bills when they sell extra energy back to the power companies.
California’s successful program to get more people to put solar panels on their homes has been at the center of a fierce debate between the state’s major utilities and the solar industry, and the California Public Utilities Commission’s proposed reforms have been highly anticipated.
The state’s three major utilities — Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison — say the savings solar customers get now are so great that those customers no longer pay their fair share for the operation of the entire grid.
The proposal this week by CPUC would reduce the incentives for going solar and roughly double, to 10 years, how long it takes Californians to make back what they paid to install the systems. Buying rooftop solar panels and a system to store extra power costs about $40,000, according to the solar industry.
The CPUC said the reforms are designed to make the program, known as “net energy metering,” more cost effective and to ensure energy grid operation costs are shared fairly. But the solar industry and its allies warned the changes will make it harder for the state to achieve its clean energy targets, including generating 100% of retail electricity from renewable or zero-carbon sources by 2045.
California launched the program in 1995. California now has 1.3 million solar systems on homes, far more than any other state, according to the solar industry. That number will only grow because since 2020 all newly constructed homes in California must have solar panels.
But as solar panels proliferated, and the cost of installing them went down, criticism grew. The three major utilities say the current setup allows solar customers to sell their energy back into the grid for more than it’s worth.
They say more needs to be done to make sure solar customers — most of whom still rely on power from utilities once the sun goes down — are paying for all the parts of the energy grid they use.
Power rates include many costs unrelated to energy generation, like transmission, distribution and even wildfire prevention work. When solar households pay significantly lower electricity bills — or no bills at all — they’re contributing less to those things.
That means more of the cost is shouldered by other customers, often households and renters without the financial means to install solar.
The utilities and the state peg that cost at $3 billion. The solar industry disputes that number, saying it doesn’t take into effect the savings for everyone when the utilities need to build fewer power plants and transmission lines due to more residential solar.