Solar supporters slam California’s new proposal to cut subsidies

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Construction crew installing solar panels on a house

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California regulators on Monday proposed significant changes to the state’s solar incentive program, a move that industry advocates vehemently oppose.

The new policy would reduce payments to solar customers for the excess electricity they generate – a policy known as net energy metering – and also add monthly charges to customers. These changes would apply to new customers as well as consumers and businesses that already have roof panels.

The California Public Utilities Commission said the proposed changes, in a decision known as NEM 3.0, are intended to encourage consumers to install battery storage systems alongside solar panels, so they can store the battery. excess energy generated by solar panels and feed it back into the grid. when it is most needed.

Solar adopters are traditionally wealthier consumers, given the high upfront cost of installing a solar system, and state utility companies have long argued that other customers are unfairly subsidizing. grid costs for these solar customers. In the 204-page document, the regulator said the current net energy metering policy “disproportionately hurts low-income taxpayers.”

The proposed changes would also create a $ 600 million fund to help low-income customers access distributed clean energy.

Southern California Edison, one of the state’s largest utility companies, said the proposed move is a “significant step toward modernizing California’s rooftop solar program.”

But solar companies and advocacy groups were quick to sound the alarm bells. California has the largest number of residential solar customers in the United States – over 1.3 million – and the incentive program has been a major driver of that growth.

Solar executives said the high costs of the new proposal will significantly dampen growth as the policies increase the payback period – the time it takes a client to recoup their initial investment in due to lower electricity bills.

Solar systems vary widely, but the current payback period is between four and five years, according to research firm E3. The CPUC said the new proposal would lead to a 10-year payback period for solar and storage systems. The Solar Energy Industries Association said it was working on its own calculation to determine the payback period under the new policy, and argued that the proposal would create “the highest solar tax in the country and tarnish the the state’s own energy heritage ”.

“The last thing we need is to go back on our climate goals,” said Abigail Ross Hopper, President and CEO of SEIA, in a statement. “The only winners today are the public services, which will make more profits at the expense of their taxpayers,” she added. “California is now on the wrong track.”

The California Solar & Storage Association echoed this statement, saying that “CPUC offered a giveaway to investor-owned utilities that would increase utility profits at the expense of energy consumers, family support jobs. and California’s clean energy future.

Solar executives also spoke, with Sunrun vice president of public policy Walker Write saying the proposal would “impose the highest discriminatory burdens on solar energy and storage customers. energy in the United States, putting solar power and rooftop batteries beyond the reach of countless families in California, just as more and more households are demanding that the state do more to address climate change and their provides reliable and sustainable energy. “

The proposed decision is not final. A comment period will now follow, with the full committee voting on a final decision no earlier than January 27, 2022. The final decision may not look anything like the decision proposed on Monday.

To complicate matters further, the president of the CPUC – one of the five commissioners – is expected to resign at the end of this year.

Monday’s decision follows a process that has been going on for months. A number of parties, including the SEIA and the California Solar & Storage Association, submitted proposals to the committee for consideration in March. California’s three largest utilities – PG&E, SoCal Edison, and San Diego Gas & Electric – have submitted a joint proposal. Other groups, including The Utility Reform Network and the National Resources Defense Council, have also made proposals on what California’s solar policy should look like in the future. There was a great variety among these proposals.

Mark Toney, executive director of The Utility Reform Network, said the proposed decision is a “step in the right direction and recognizes the importance of a sustainable solar policy that benefits all customers.”


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