California Could Drastically Cut Solar Incentives

If the California Public Utilities Commission approves an update to the state's solar incentive program, property owners could see a rise in costs for rooftop solar energy, among other changes, reports Sammy Roth. "Officials say the changes are needed to keep the lights on, prevent electricity rates from rising and encourage people to install batteries, while still growing the solar market. Solar executives say they would backfire and crater a thriving industry."

The changes, which would only apply to Edison, PG&E, and SDG&E customers, would "reduce payments to solar customers who send electricity to the power grid" through an overhaul of the process called net metering and add a monthly fee for homeowners that install solar, but also create a temporary "market transition credit" and fund programs to install clean energy in low-income communities and help homeowners buy batteries. Homes with existing solar panels would pay highly variable rates based on time of day.

Solar advocates and environmental groups are "slamming the proposed decision," calling it a huge setback for a badly needed and still nascent industry. But some also agree that the new model is more equitable and could help more low-income families invest in solar power.

Roth outlines the response from a variety of stakeholders including consumer advocates, the solar industry, utilities, home builders, and investors. While most agree on the need for more rooftop solar, they disagree on whether lowering existing incentives, even with transition assistance, will harm the rate of adoption of solar panels.