California reduces incentives for rooftop solar owners

California’s Public Utilities Commission unanimously passed a policy Dec. 15 that reduces excess electricity credit for the state’s rooftop solar owners and changes tariffs in favor of those who buy home energy storage systems.

Storage allows solar users to use stored energy at night or feed it back to the grid.

“For the rooftop solar industry to remain sustainable, we need to put more emphasis on exports during the really fossil-heavy time of day,” Supply Commissioner John Reynolds said during the meeting. “In short, we are making this change because of our commitment to combating climate change.”

Solar panels can generate 12,000 megawatts of electricity, nearly six times more than the state’s last nuclear plant, according to the commission. Without storage systems, fossil fuels take over maintaining the electricity grid when the sun goes down, increasing tariffs for non-solar customers.

Since 2020, new homes in California must have solar power, but without the need for storage.

The battle over solar changes has dragged on for almost two years. The lower interest yield will only affect future solar owners who receive power from Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric. Nothing will change for current roof solar owners.

Affordable Clean Energy — a utility-backed coalition — estimates $4 billion in costs will be shifted from solar to non-solar customers. Solar customers also draw electricity from the grid in the evening hours without being produced in return.

Because the tariff change will not apply to existing rooftop solar customers, the shift in costs will further increase energy bills for non-solar users, the coalition argued.

“Numerous independent studies and statements from various parties make it clear that the current solar subsidy program is forcing low-income families, renters, seniors and those who do not have rooftop solar to fund the solar systems of wealthier Californians. Today’s vote ensures this unsustainable shift in costs will continue indefinitely,” Kathy Fairbanks, a spokeswoman for the coalition, said in a statement.

With rooftop solar systems declining in value, solar companies fear fewer people will participate in the program. The policy change for prospective solar customers means they receive a net billing credit for their excess energy, which is significantly less than the previous net metering system.

“The solar and storage industry remains concerned that the transition from net metering to the new net billing structure is too abrupt and threatens to slow deployment of rooftop solar in California,” Sean Gallagher, vice president of state and regulatory affairs for Solar Energy Industry Association said in a statement.

A transition period provides incentives for those who install panels and storage systems within five years. Residents of tribal communities, disadvantaged neighborhoods and those on low incomes are eligible for dual credit with one installation. Despite this, some solar advocates said the price will still be too expensive for these groups.

According to Bernadette Del Chiaro, executive director of the California Solar & Storage Association, the average solar and storage system can cost around $26,000 after a 30 percent deduction from federal tax credits.

According to consumer advocacy group Public Advocates Office, the proposed change will save residential solar customers an average of $100 per month, or $136 for those with storage systems.

“Clean energy use during the day must be extended into the evening. Solar with batteries does exactly that. It’s the next step toward a clean energy future that will improve the air we breathe, the communities we live in and our overall quality of life,” said the office’s director, Matt Baker , in a statement.

According to the Supply Commission, it would take no longer than nine years for the costs of installing a solar and battery system to be amortized with the new remuneration structure.

The Associated Press contributed to this report.

Rudy Block

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