California utilities regulators will vote Thursday on a proposal that would lower the amount of credit households receive for exporting excess power to the grid. This is a move solar companies fear could slow down installations, but utility representatives argue it will make rates more affordable for those with low income rates.
Californians who have rooftop solar panels are credited with excess electricity at the same rate or close to it for decades. While supporters say that this incentive is crucial for the state’s fight against climate change, critics claim it unfairly favors those who can afford solar.
California Public Utilities Commission presented the proposal last month. It would alter the policy of “net metering”. Solar owners would be compensated for excess power at a rate lower than the price the utility would spend to purchase clean energy elsewhere.
The new credit would be available to homes that have solar power systems. This would enable them to store excess energy in their reserve and then transfer it to the grid when they are not producing enough. This would stabilize California’s grid and ensure reliability as it makes its long-term transition from fossil fuels.
Because policies in California can often be used as models for states looking to substitute fossil fuels by renewable energy, the nationwide monitoring of this five-member panel’s vote is ongoing.
Advocates for ratepayers and utilities support this proposal. They argue that the current policy shifts the majority of the costs of maintaining the grid onto customers who don’t have panels. These people are typically less wealthy. The solar companies argue that these changes will slow down new installations and harm California’s climate and clean energy goals.
Matt Baker, Director of the Public Advocates Office (an independent advocate for ratepayers at the CPUC), said that “we’ve outgrown the policy” and that it was not sustainable.
Affordable Clean Energy For All (a utility-backed group) has stated that the proposed changes are not sufficient to reduce the burden of high-cost energy for lower-income households.
California’s three investment-owned utilities include Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric.
This policy, which has been in place for many years, is causing national residential installers Sunrun Inc, SunPower Corp, and hundreds of other local businesses to grow and make California the national leader in solar installation.
According to the PUC, solar will still be economically viable after reforms. For example, customers who install solar using a battery would see a $136 per month savings under this plan, as opposed to $100 per month with solar alone.
