California pitches cut in solar perks

SACRAMENTO, Calif. — California regulators proposed major changes to the state’s booming residential solar industry Monday, including reducing 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 wildly successful 26-year-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.

Power companies say the savings solar customers get from the current incentives are now so great that they no longer pay their fair share for the operation of the overall energy grid.

The changes proposed Monday would reduce those incentives 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 the power for nighttime use costs about $40,000, according to the solar industry.

The utilities commission said the changes 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 started the program in 1995 with the goal of encouraging more homes to go solar. It worked. 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.

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.

A five-member commission panel will vote on the final PUC reform proposal, likely in January.