California lowers incentives for rooftop solar panels

Dec 15, 2022, 12:08 PM | Updated: Dec 16, 2022, 4:17 pm
FILE - Gen Nashimoto, of Luminalt, installs solar panels in Hayward, Calif., on April 29, 2020. Cal...

FILE - Gen Nashimoto, of Luminalt, installs solar panels in Hayward, Calif., on April 29, 2020. California air regulators are set to approve an ambitious plan for the state to achieve carbon neutrality by 2045. Doing so will require a rapid transition away from oil and gas and toward renewable energy to power everything from cars to buildings. (AP Photo/Ben Margot, File)

(AP Photo/Ben Margot, File)

SACRAMENTO, Calif. (AP) — California utility regulators on Thursday approved major changes to the state’s booming rooftop solar market that they say will more evenly spread the cost of energy and help reduce the state’s reliance on fossil fuels in the evening.

The state has long led the nation in adoption of rooftop solar panels, and today more than 1.5 million California homes and other buildings have them. Under a decades-old program, people with solar panels can get paid by their power companies by sharing excess solar energy they don’t need, leading some solar homes to pay minimal electric bills.

That’s led to criticism that rooftop solar customers aren’t paying their fair share into the rest of the energy grid, which many still rely on for power when the sun goes down. Power rates also include things like transmission equipment and wildfire prevention work, and regulators approve a set amount of money that utilities can recover from customers.

The policy approved unanimously by the California Public Utilities Commission lessens the overall payment for selling excess power. It also revamps electric rates to try to encourage people to build home storage systems alongside their panels, so they can tap that stored power at night or feed it back to the grid, either of which would help the system rely less on fossil fuels.

“For the rooftop solar industry to remain sustainable, we must place greater value on exports during the truly fossil-heavy time of day,” Commissioner John Reynolds said. “In short, we are making this change because of our commitment to addressing climate change.”

Although solar provides a lot of California’s power during the day, fossil fuels largely take over in the evening and during the night. Sometimes, California has more solar power than it can use during the day. Existing rooftop systems are capable of generating about 12,000 megawatts of power, according to the commission, nearly six times what the state’s last remaining nuclear plant generates.

But battery storage is not yet widespread. Today about 16% to 20% of the 150,000 households that install solar panels annually in California add battery storage systems, according to industry estimates. As of 2020, California started requiring all newly built homes to have solar panels, but there is no requirement for storage.

The commission’s vote followed sustained criticism over three hours of public comment in which some speakers accused the commission — and Democratic Gov. Gavin Newsom’s administration — of hindering the state’s climate efforts.

California has pushed forward with ambitious targets for weaning the state off oil and gas. Also Thursday, state air regulators approved a climate roadmap that says California must quadruple its solar and wind power to achieve carbon neutrality by 2045.

The fight over the solar changes has gone on for nearly two years, pitting the state’s three major utilities against the solar industry, with many environmental groups caught somewhere in between. The changes will apply only to customers of Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric,, which collectively serve a majority of customers in the states. They would not affect people who already have rooftop solar.

A utility-backed coalition called Affordable Clean Energy for All estimates that $4 billion in costs are shifted from solar to non-solar customers. Since the change doesn’t apply to existing solar customers, the cost shift will continue putting pressure on energy bills for everyone else, the coalition argued.

“Numerous independent studies and testimony from diverse parties make clear the current solar subsidy program forces low-income families, renters, seniors and anyone who doesn’t have rooftop solar to bankroll wealthier Californians’ solar systems. Today’s vote ensures this indefensible cost-shift will continue indefinitely,” Kathy Fairbanks, a spokesperson for the coalition, said in a statement.

The solar industry disputes that number, saying it doesn’t account for the benefits that rooftop solar provides for everyone, like making the grid more resilient and reducing the need for utilities to build more costly legacy power equipment.

Broadly, solar companies have warned that fewer people will add home solar because the overall value of rooftop solar is going down.

“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 the deployment of rooftop solar in California,” Sean Gallagher, vice president of state and regulatory affairs for the Solar Energy Industries Association, said in a statement.

The policy includes a transition period that gives extra incentives to people who install panel and storage systems in the next five years. Low-income utility customers as well as people living in disadvantaged neighborhoods and tribal communities will get double the credits to install home systems. Still, some solar advocates argued the price of solar will be too expensive for those households.

The average household solar and storage system costs about $26,000 when taking into account federal tax credits that cover about 30% of the cost, said Bernadette Del Chiaro, executive director of the California Solar & Storage Association

But the Public Advocates Office, a consumer advocacy group with the utilities commission, supports the change, pointing to commission estimates that show the proposal will still save residential solar customers an estimated $100 on their monthly bills, or $136 a month if they also install 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,” Matt Baker, the office’s director, said in a statement.

With those payments, it would take no more than nine years for someone to recoup the cost of installing the solar and battery systems through reduced energy costs, the commission said.

___

This story has been corrected to reflect that the state’s 1.5 million rooftop solar installations are on homes and other buildings, not just homes.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Kosovo's Prime Minister Albin Kurti speaks during an interview with The Associated Press in capital...
Associated Press

Kosovo PM calls on West not to put pressure over Serb entity

PRISTINA, Kosovo (AP) — Kosovar Prime Minister Albin Kurti called on Western powers not to pressure his tiny Balkan country into accepting a contentious association of five Serb-majority municipalities that is ramping up tensions between Kosovo and Serbia. Kurti told The Associated Press that the focus instead should be on making Serbia more democratic and […]
2 hours ago
A vendor sells refrigerator magnets showing a picture of Russian President Vladimir Putin, on main ...
Associated Press

In pro-Putin Serbia, liberal-minded Russians seek a home

BELGRADE, Serbia (AP) — At a central square in Serbia’s capital of Belgrade, dozens of Russians gathered recently to denounce President Vladimir Putin’s war in Ukraine, holding up photos of political prisoners from their homeland. Across the plaza, a billboard touts the Russian propaganda outlet RT, which has launched an online news portal in the […]
2 hours ago
Australian Trade Minister Don Farrell, left, gestures as he speaks to China's Minister of Commerce,...
Associated Press

China-Australia trade ministers hold 1st meeting since 2019

CANBERRA, Australia (AP) — Australian and Chinese trade ministers held their first bilateral meeting in three years Monday as Australia urges China to lift official and unofficial barriers that are costing exporters 20 billion Australian dollars ($14 billion) a year. China has thawed its diplomatic freeze on Australia since Prime Minister Anthony Albanese’s center-left Labor […]
2 hours ago
The damaged structure is seen at the scene of a fire at the Bright Moon Buddhist Temple in Springva...
Associated Press

Fire extensively damages Buddhist temple in Australian city

MELBOURNE, Australia (AP) — A Buddhist temple has been extensively damaged by fire in the Australian city of Melbourne. About 80 firefighters fought the blaze at the Bright Moon Buddhist Temple for more than two hours before it was brought under control late Sunday. Spot fires were still being put out Monday. There were no […]
2 hours ago
A computer screen displays a notice blocking the Wikipedia website through an online news site in I...
Associated Press

Pakistan blocks Wikipedia, says it hurt Muslim sentiments

ISLAMABAD (AP) — Pakistan’s media regulator said Monday it blocked Wikipedia services in the country for hurting Muslim sentiment by not removing purportedly blasphemous content from the site. Critics denounced Islamabad’s action, saying it was a blow to digital rights. Under Pakistan’s controversial blasphemy laws, anyone found guilty of insulting Islam or its figures can […]
2 hours ago
A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headqu...
Associated Press

Asian stocks sink after US jobs data fan rate hike fears

BEIJING (AP) — Asian stock markets sank Monday after strong U.S. jobs data fanned fears of more interest rate hikes to cool inflation. Shanghai, Hong Kong and Seoul retreated. Tokyo gained. Oil prices rose. Wall Street wilted Friday after official data showed U.S. employers hired twice as many people in January as the previous month. […]
1 day ago

Sponsored Articles

...
Quantum Fiber

How high-speed fiber internet edges out cable for everyday use

In a world where technology drives so much of our daily lives, a lack of high-speed internet can be a major issue.
...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
California lowers incentives for rooftop solar panels