Calif. proposes reducing benefits for rooftop solar
SACRAMENTO, Calif. – California regulators on Monday proposed reducing the discounts people who install home solar panels and storage systems get on their energy bills, meaning it will take a decade to recoup the costs of installation.
California’s wildly successful 26year-old 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.
Current incentives allow residential solar customers to sell whatever energy they don’t use back to power companies at the retail rate for power, usually resulting in a big discount on their energy bills. Power companies say the savings are now so great that solar customers no longer pay their fair share for the operation of the overall energy grid.
Major utilities, the solar industry, consumer advocates and environmental groups submitted their own ideas for potential reforms. The CPUC’S proposal doesn’t gut the financial incentives as much as wanted by the utilities, Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.
The program known as net metering program launched in 1995 with the goal of boosting solar adoption in the famously sunny state. California now has more than 1.3 million residential solar installations, 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.
CPUC Commissioner Martha Guzman Aceves said the reforms announced Monday are aimed at creating fairness while ensuring the financial benefits are still strong enough to encourage people to go solar. The commission’s proposal would lower the amount of money residential solar customers make by selling their excess energy back to the power companies and add a “grid participation charge” of about $40 per month for households.
The changes would apply to new solar customers. People who already have panels on their homes wouldn’t operate under the new system until they’ve had their panels for 15 years.
But state regulators also want to encourage people with solar panels to install storage systems. It costs about $20,000 to $25,000 for people to put solar panels on the rooftop and another $15,000 to install storage systems. Customers who have storage systems – only a fraction of the overall rooftop solar market – can store the extra energy they make during the day for use at night.
The more customers who have solar storage, the fewer people need to rely on the energy grid – and fossil fuels – during the evening. The state has set a goal of generating all retail electricity from renewable or zero-carbon sources by 2045. Under the state’s plan, customers who already have rooftop solar will have access to a $3,200 subsidy to install storage.
Regulators also propose creating a $600 million fund to help low income households afford solar and storage.
A five-member commission will vote on the final PUC reform proposal, likely in January.