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Save A Lot Solar contractors install LG Electronics solar panels in Hayward, California, U.S., Tuesday, Feb. 8, 2022.

David Paul Morris |: Bloomberg |: Getty Images:

California’s Public Utilities Commission on Thursday approved a proposal that would reduce reimbursements to households for excess electricity their rooftop solar panels contribute to the electric grid.

Utilities and consumer groups argue that the incentive payments have unfairly favored wealthier consumers and hurt poor and low-income households. But solar companies and renewable energy advocates say lowering the offset would slow solar installations and hinder the state’s climate change goals.

The proposal, which California utility regulators released last month, would change net metering policies by paying solar owners for additional energy at a lower rate determined by the cost the utility would have to spend to buy clean energy from an alternative source. The solar industry has announced that the program will result in a 75% reduction in average billing rates for customers.

Today’s unanimous vote by the five-member panel has been watched across the country as California is widely seen as a leader in building renewable energy. The impact of today’s decision will likely extend beyond state lines and impact the solar industry across the country, particularly for companies in the residential solar space such as; Sunrun:, SunPower:, Sunovaand: Tesla.

More than 1.5 million homes, businesses and other utility customers in California have rooftop solar panels. The Public Utilities Commission has estimated that these facilities could together produce 12 gigawatts of electricity.

The proposal would have no impact on rooftop solar customers and would maintain their current reimbursement rates and encourage consumers to install batteries with their solar panels, the commission said.

Affordable Clean Energy For All, a nonprofit funded by California utilities, argues that the rooftop solar program is outdated and that utilities should pass on the cost of the subsidies, creating higher bills for millions of customers who don’t install solar. energy including them. the minimum can pay electricity costs.

However, solar companies argue that the existing net metering system is necessary to incentivize people to opt for rooftop solar.

Changes to the state’s solar incentive program could cut California’s solar market in half by 2024, according to a report released earlier this year by energy research firm Wood Mackenzie.

“This ill-advised decision, which undermines the many benefits of solar for all Californians, will dim the light of solar growth in the Golden State,” Laura Deehan, California’s state director of environmental affairs, said after the vote.

Roger Lynn, an attorney with the Center for Biological Diversity’s Energy Justice Program, said in a statement that the commission has “taken a step backwards by widening the gap between those who can afford solar and those who cannot.”

“It’s an affront to the low-income communities most affected by the climate crisis, and we will do everything we can to convince the commission to fix the deep flaws in its proposal,” Lynn said.

California, which is struggling with wildfires and drought caused by climate change, aims to switch to 100% renewable energy by 2045.

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