Construction crew installing solar panels on a house
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California regulators on Monday proposed significant changes to the state’s solar incentive program in a move vehemently opposed by industry advocates.
The new policy would reduce payments granted to solar customers for the excess power they generate — a policy known as net-energy metering — and also add monthly charges for customers. These changes would apply to new customers as well consumers and businesses who already have rooftop panels.
The California Public Utilities Commission said the proposed changes, in a decision known as NEM 3.0, are meant to encourage consumers to install battery storage systems alongside solar panels, so they can store the excess power generated by solar panels and feed it back to the grid when it’s most needed.
Solar adopters have traditionally been wealthier consumers, given the high up-front cost of installing a solar system, and the state’s utility companies have long argued that other customers are unfairly subsidizing grid costs for these solar customers. In the 204-page document, the regulatory body said that the current net-energy metering policy “disproportionately harms low-income ratepayers.”
The proposed changes would also create a $600 million fund to help low-income customers gain access to distributed clean energy.
Southern California Edison, one of the state’s largest utility companies, said the proposed decision is a “meaningful step toward modernizing California’s rooftop solar program.”
But solar companies and advocacy groups were quick to sound the alarm. California has the highest number of residential solar customers across the U.S. — more than 1.3 million — and the incentive program has been a key driver of that growth.
Solar executives said that the elevated costs under the new proposal will significantly dampen growth since the policies will increase the payback period — that is, how long it takes for a customer to make back their initial investment due to lower electric bills.
Solar systems vary significantly, but the current payback period is between four and five years, according to research firm E3. CPUC said that the new proposal will lead to a 10-year payback period for solar plus storage systems. The Solar Energy Industries Association said it’s working on its own calculation to determine the payback period under the new policy, and argued that the proposal would create the “highest solar tax in the country and tarnish the state’s clean energy legacy.”
“The last thing we need is to go backward on our climate goals,” Abigail Ross Hopper, president and CEO of SEIA, said in a statement. “The only winners today are the utilities, which will make more profits at the expense of their ratepayers,” she added. “California is now on the wrong path.”
The California Solar & Storage Association echoed this statement, saying “CPUC proposed a giveaway to investor-owned utilities that would boost utility profits at the expense of energy consumers, family-supporting jobs, …….