SACRAMENTO, Calif. (AP) — California regulators on Monday proposed reducing the discounts people who install home solar panels and storage systems get on their energy bills, meaning it will take more time — a decade — to recoup the costs of installation.
California’s wildly successful 26-year-old program to get more people to put solar panels on their homes has been at the center of a fierce debate between the state’s major utilities and the solar industry and the California Public Utilities Commission’s proposed reforms have been highly anticipated.
Current incentives allow residential solar customers to sell whatever energy they don’t use back to power companies at the retail rate for power, usually resulting in a big discount on their energy bills. Power companies say the savings are now so great that solar customers no longer pay their fair share for the operation of the overall energy grid.ADVERTISEMENT
Major utilities, the solar industry, consumer advocates and environmental groups all submitted their own ideas for potential reforms. The CPUC’s proposal doesn’t gut the financial incentives as much as wanted by the utilities, Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.
The program known as net metering program launched in 1995 with the goal of boosting solar adoption in the famously sunny state. California now has more than 1.3 million residential solar installations, more than any other state, according to the solar industry. That number will only grow because since 2020 all newly constructed homes in California must have solar panels.
But as solar panels proliferated, criticism about the program grew. Utility companies say the current setup allows solar customers to sell their energy back into the grid for more than it’s worth. They say more needs to be done to make sure solar customers — most of whom still rely on power from utilities at nighttime — are paying for all the parts of the energy grid they use.
Power rates include many costs unrelated to energy generation, like transmission, distribution and even wildfire prevention work. When solar households pay significantly lower electricity bills — or no bills at all — they’re contributing less to those things. That means more of the cost is shouldered by other customers, often households and renters without the financial means to install solar. The utilities and the state peg that cost at $3 billion, though the solar industry disputes that number.
