A high-stakes battle is under way over the future of rooftop solar energy in California. On one side: Current and future rooftop solar consumers in the nation’s leading solar state. On the other, the state’s big three investor-owned utilities — PG&E, Southern California Edison and San Diego Gas & Electric.
The utilities have petitioned the state Public Utilities Commission to slash by more than half the credit they must pay customers for excess energy generated by rooftop solar panels. They also want to charge new rooftop solar customers nearly $70 a month just to hook up to the grid.
The PUC will hold hearings on this petition beginning July 26. The final decision, due by the end of the year, could cost solar ratepayers millions, essentially destroying the rooftop solar market in California.
Some of the slowdown in smaller-scale rooftop solar has come in maturing markets in states like California, where rooftop solar companies are having trouble expanding their customer base beyond early adopters.
Over the past six years, rooftop solar panel installations have seen explosive growth — as much as 900 percent by one estimate.
That growth has come to a shuddering stop this year, with a projected decline in new installations of 2 percent, according to projections from Bloomberg New Energy Finance.
A number of factors are driving the reversal, from saturation in markets like California to financial woes at several top solar panel makers.
But the decline has also coincided with a concerted and well-funded lobbying campaign by traditional utilities, which have been working in state capitals across the country to reverse incentives for homeowners to install solar panels.
Utilities argue that rules allowing private solar customers to sell excess power back to the grid at the retail price — a practice known as net metering — can be unfair to homeowners who do not want or cannot afford their own solar installations.
Geoffrey Smith, CENTER FOR CLIMATE PROTECTION
The fate of rooftop solar has been a cliffhanger for the last few months.
On January 28, the California Public Utilities Commission (CPUC) voted on the future of Net Energy Metering (NEM) and its impacts on rooftop solar in California.
The consequences of a ‘bad’ CPUC decision are proven. We need only look at rate decisions recently made in Nevada and Hawaii, which devastated the rooftop solar industry. Would California go the way of Nevada? Thankfully, that was not the outcome.
In a 3-2 vote, the CPUC helped secure a future of growth for rooftop solar by adopting a NEM successor tariff largely resembling the original tariff (or “rate structure”), that governs how rooftop solar generators are compensated for the energy they produce.
What does this mean for you, the rooftop solar generator? First and foremost, it means you will continue to be paid full retail rate (rather than a lower wholesale rate proposed by the utilities) for all of the power you produce and send to the grid. Additionally, no monthly fixed or transmission access charges were imposed, and only a ‘reasonable’ one-time fee will be charged for connection to the grid. Overall, the outcome was a big win for rooftop solar.
The Center for Climate Protection attended the CPUC session to show our support and bring to you a report of the day’s events.
Despite months – years, in fact – of aggressive lobbying and grassroots organizing from the solar industry and climate activists, the prevailing sentiment on January 28 was one of tension and uncertainty.
More than twenty audience members presented public comments from a variety of perspectives, almost all supporting strong NEM rules favoring rooftop solar. Only one spoke against such rule-making: The California Chamber of Commerce.
At the close of the public comment period, CPUC President Michael Picker opened the discussion among the commissioners. He noted that the proposed decision (PD) from December to extend NEM would give customers more choice as well as responsibility, and that the PD was moving in the right direction. He voted YES (1-0).
Commissioner Liane Randolph also spoke in defense of NEM, saying that the PD strikes the right balance in a complicated process. She voted YES (2-0).
Commissioner Catherine Sandoval had enthusiastically supported the PD leading up to the previous day’s amended proposal in which transmission access charges were removed. She said she could not support the proposal without those charges in place. She voted NO (2-1).
Commissioner Michael Florio largely echoed Sandoval’s comments, and voted NO (2-2). The tension in the room escalated as the 2-2 vote and ultimate decision moved to the last commissioner. ‘What if’ scenarios were playing out in everyone’s minds.
Commissioner Carla Peterman opened her remarks by acknowledging the wide range of views on the matter and endorsed the PD as moving in the right direction. She said she looked forward to working on the future of NEM, which the CPUC takes up again in 2019. And then she cast a YES vote for the 3-2 final vote in favor of NEM.
Rooftop solar lives to power our communities for another day! The mood in the room as the (mostly) rooftop solar supporters stood to leave the chamber was one of relief. This was a hard-fought battle over a complex set of issues governing an individual’s right to choose how they power their lives. But the real winner was the climate. With new certainty now established around rooftop solar rates, greenhouse gas reductions will accelerate. Go solar!
Alison Seel, SIERRA CLUB
January 28. Today, the California Public Utilities Commission adopted its final, hotly anticipated decision on the future of rooftop solar compensation in California. The Commission voted to keep net metering, allowing new rooftop solar owners to receive compensation for every kilowatt hour of energy they export to the grid at their retail rate.
The big change is that new solar customers will soon be required to be on a time-of-use rate, where electricity is more expensive to buy (and extra solar energy is more valuable to sell), at times of high electricity demand. New net metering customers will be required to start signing up under time-of-use rates as soon as the current net metering program is filled to capacity (expected to happen in six months to a year, depending on the utility).
Time-of-use-based net metering is a wise first step in the evolution of rooftop solar policy. As California takes bold and necessary steps toward a fully decarbonized power system, we’ll need to create a more dynamic relationship between electricity supply and demand. Today’s decision helps us achieve this goal: the simplicity and familiarity of net metering will keep rooftop solar expanding, while time-of-use rates incentivize net metering customers to save solar power for later in the day through adaptations both cutting-edge (battery storage and smart thermostats) and mundane (west-facing panels). This shift can reduce our evening reliance on gas-fired generation, decrease air pollution, and position rooftop solar as a tool to address, not exacerbate, the much-ballyhooed duck curve.
But this isn’t the end of the road. The Commission only narrowly approved the decision, with two Commissioners feeling it didn’t reduce solar compensation enough. The discussion made it clear that rooftop solar policy can and should evolve further, as we’re better able to quantify the locational value of power exports, and as we begin to harness the features of (soon-to-be-required) smart inverters. The Commission will reconsider the issue in 2019, with Commissioners suggesting they’d favor a shift to a model based on a set price for power exports.
Overall, it’s refreshing to see a time- and resource-intensive, high stakes debate result in a balanced outcome (we’re looking at you, Nevada). This decision models how states with high levels of rooftop solar penetration can begin aligning solar compensation with its value in a measured way. Tens of thousands of people weighed in, and in the end, rooftop solar in California is positioned to keep growing, bringing cleaner air, more jobs, and a more resilient power system to California.
Derek Moore, THE PRESS DEMOCRAT
As Petaluma veterinarian Matthew Carter’s electricity bills reflect, caring for animals in a comfortable clinic setting is not cheap.
Carter, who co-owns Central Animal Hospital on D Street with his wife, is having solar panels installed on the roof of the business this week. He hopes to slash the clinic’s energy bills, which average about $800 a month, by about 80 percent.
And, economics aside, solar power, Carter said, “is good for the environment.”
Legions of Californians have turned to solar energy for similar reasons. But under proposals by the state’s three utility giants, rooftop solar power may become less of a good deal. The companies, including PG&E, are seeking to lower compensation rates to solar customers who supply excess power to the grid, and to also implement new “demand charges” for those customers.
The changes would cut the amount solar customers save on utility bills by an average of about $20 per month.
PG&E, which has connected more rooftop solar than any utility in America, argues the changes are needed to create a more equitable and sustainable framework for maintaining the electricity grid.
“We need to make sure the grid is robust and that it can accommodate that two-way power flow,” said Steve Malnight, PG&E’s senior vice president of regulatory affairs.
Solar companies, however, say the utilities are really seeking to dim interest in the fast-growing source of power for homes and businesses. Sonoma County alone has seen an 808 percent increase in the number of PG&E customers hooking up to solar in the past decade — and there are no signs of the trend abating.
Read more at: Proposal from PG&E, other utilities, seeks cut in | The Press Democrat