by Save A Lot Solar contractors install LG Electronics solar panels on a home in Hayward, California, U.S. on Tuesday, February 8, 2022.
David Paul Morris | Bloomberg | Getty Images
The California Public Utilities Commission on Thursday approved a proposal that will reduce the compensation provided to households for the excess electricity their rooftop solar panels contribute to the power grid.
Public services and consumer groups have argued that stimulus payments have unfairly favored wealthier consumers and hurt poor and low-income households. But solar companies and renewable energy advocates said lowering the offset would slow solar installations and hinder the state’s goals to address climate change.
The proposal, which California’s utility regulators unveiled last month, will change a net metering policy by paying solar owners for extra energy at a lower rate, which is determined by the cost the utility would have to spend to buy clean energy from an alternative source. The solar industry said the plan would equate to a 75% reduction in average payment rates to customers.
Today’s unanimous vote by the five-member commission was monitored 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 the state and have implications for the solar industry nationwide, especially residential solar businesses such as Sunrun, Solar power, SunnovaAnd Tesla.
More than 1.5 million homes, businesses and other utility customers in California have solar panels on their roofs. The public utilities commission estimates that these plants can collectively produce 12 gigawatts of electricity.
The proposal would have no impact on existing rooftop solar customers and would maintain their current compensation rates and also encourage consumers to install batteries with their solar panels, the commission said.
Affordable Clean Energy For All, a non-profit organization funded by California utilities, argued that the rooftop solar program is outdated and utilities need to pass on subsidy costs, creating higher utility bills for millions of customers than they do. install solar power, including those least able to pay the electricity costs.
However, solar companies have argued that the current in-place metering system is needed to inspire people to choose rooftop solar.
Changes to the state’s solar subsidy 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 poor decision, which underestimates the many benefits of solar for all Californians, will dim the lights on solar growth in the Golden State,” said Laura Deehan, California state environmental director, after the vote.
Roger Lin, an advocate for the Center for Biological Diversity’s energy justice program, said in a statement that the commission “has stepped back widening the gap between those who can afford solar and those who can’t.”
“It’s an affront to low-income communities who are hit first and worst by the climate crisis, and we will do everything we can to get the commission to fix the deep flaws in its proposal,” Lin said.
California, which is grappling with wildfires and droughts fueled by climate change, has a goal of moving to 100% renewable energy by 2045.
