California Regulators Propose Cutting Compensation for Rooftop Solar

An anonymous reader writes: For a second time in less than a year, regulators in California moved on Thursday to roll back the compensation that homeowners receive from utilities for the excess electricity their rooftop solar panels send to the electric grid — payments that power companies and some consumer groups have argued hurt poor and low-income households. The new proposal from the California Public Utilities Commission would cut the benefit foralmost all new rooftop solar customers by about 75 percent starting in April. Under current rules, households that send excess power to the grid receive credits on their utility bills that are equivalent to retail electricity rates. The system of credits is known as net energy metering. The measure, which will be subject to public comment before the commission’s five members vote on it, would also limit solar systems to 150 percent of a building’s electricity load.

Regulators in other states are closely watching how California changes its net metering program. Utilities and solar energy companies have been fighting over energy credits in numerous states. Billions of dollars in investment and revenue are potentially at stake. More generous credits typically encourage people to buy solar panels but can cut into the profits of utilities. California leads the nation by far in the use of rooftop solar, with about 1.5 million such installations. The utilities commission estimates that those systems have the collective capacity to generate 12 gigawatts of electricity, or the equivalent of 12 nuclear power plants.

In a statement, the commission said the new proposal would make net metering more equitable. Average residential customers of Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric who install solar panels would save $100 a month on their electricity bill, and average residential customers installing solar paired with battery storage would save at least $136 a month, the commission stated. As a result of those savings, it said, the average household that installs a new solar or solar and battery system would be able to fully pay off the system in nine years or less. Compensation would not change for homeowners who already had rooftop solar panels, for at least 20 years from when their system was installed.