California is looking for changes to the rooftop solar market

SACRAMENTO, Calif. – California regulators on Thursday proposed changes to the country’s residential solar market designed to encourage more home battery systems that can help the electric grid rely less on fossil fuels in the afternoon, especially during heat waves.

This is the California Public Utilities Commission’s second attempt to update the state’s incentive program for home solar systems. Last December, the commission proposed new fees for solar customers and reduced subsidies for installing rooftop panels, which utilities want but solar companies warn would cripple the booming industry and hinder the state’s move to clean energy.

Solar panels are on 1.5 million California homes, creating the largest home solar market in the country. The country has set ambitious goals to shift away from fossil fuels and renewable energy sources such as solar and wind to power homes, businesses and cars.

Under existing rules, solar customers can sell excess energy they no longer use to their power company for a bill credit.

California’s three major utilities – Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric – say the payments are so generous that diesel customers aren’t paying their fair share of the cost of the entire grid, which they keep. rely on when the panels are not producing power. The electricity tariff includes other costs such as electricity transmission and fire prevention works.

About $4 billion in costs are shifted from diesel to non-diesel customers, according to estimates from a utility-backed coalition called Affordable Clean Energy for All. When solar customers pay very low bills, because of the credits, they pay less to the overall energy grid. The solar industry argues that the number does not take into account the contribution to grid reliability and other benefits that rooftop solar provides.

Kelly Hymes, the administrative law judge who wrote the commission’s proposal, acknowledged the shift, saying the state’s current system harms non-solar customers, with a disproportionate impact on low-income utility customers, and is “not cost-effective.”

The new proposal reduces how much people pay to sell their extra energy. But that doesn’t include the solar-specific costs that utilities want. It creates a new financial incentive for people to install home storage systems to capture additional solar energy during the day. It also changed electricity tariffs to encourage people to export stored energy to the grid in the late afternoon and early evening, when the grid typically switches from renewable sources to fossil fuels.

The five-member public utilities commission has until mid-December to discuss the proposal. If they approve it, it won’t take effect until at least April 2023.

People who already have solar panels and storage systems will not see a change in their bill credits; The plan will only affect new customers. It’s also locking in better rates for people installing over the next five years in an effort to encourage more homeowners to enter the solar market now, though the solar industry says that’s too few to matter.

It currently takes about five to seven years for bill credits to cover the cost of installing solar panels, and longer for storage systems, said Bernadette Del Chiaro, executive director of the California Solar & Storage Association. The average solar and storage system costs about $26,000 when factoring in new federal tax credits that cover 30% of the cost, he said.

About 150,000 people add solar panels annually, and between 16% and 20% of those installations include battery storage, he said.

Recent efforts to strike a balance between utilities and the solar industry have drawn more criticism than praise. The utility-backed coalition said it had “failed to make important reforms” to ensure costs were adequately distributed, while the California Solar & Storage Association said the proposal would “really hurt” the industry by making home solar panels more affordable.

The changes, if adopted, would only apply to customers of Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric.

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