Showdown looms over changes in California rooftop solar incentives
RICHMOND – On Wednesday, the California Public Utilities Commission (CPUC) will consider a plan to change the incentives offered to owners of rooftop solar panels.
Proponents of the change say it would make the system fairer, but solar advocates fear it would cut consumer demand for the technology.
People with solar panels on their roofs don't pay for the energy they use when the sun is shining. But the law also grants them credit toward their bills for any extra energy that gets sent to the grid.
It's called "net metering" and it's worked well at Jason Smith's home in Richmond.
"Before, it was $300 to $400 a month," Smith told KPIX 5. "Now, it's like $20 a month."
But the PUC is considering a proposal that, among other things, would reduce the credits that solar power owners receive by up to 75%. Utilities argue that the high price they are forced to pay for the excess energy allows solar power owners to escape paying for maintaining the grid, jacking up the price of electricity for everyone else.
The proposal would exempt existing systems, which is why Smith hurried to get his installed in June.
"The net metering changes were a big decision on me expediting the decision to go solar," Smith said. "I wanted to get grandfathered in under the current net metering laws."
What would a reduction in credits mean to consumer demand going forward?
"For smaller companies, this would be devastating," said solar consultant Marc Fontana.
According to Fontana, lowering the net metering rate would remove one of the key financial incentives for owning solar, lengthening the time it would take to pay off a buyer's system.
"They figure, if they invest a fair amount of money on solar at the start, that they will have paid for that investment in less than 10 years," Fontana told KPIX 5. "And I think that's a reasonable expectation. But if it's going to take 20 years, then it's much less attractive, and I think far fewer people would be interested."
Chad Garnon, owner of Liberty Bay Solar, said he's not worried that demand will plummet. Garnon said even if the rate is reduced, it still makes more sense to pay into a solar system than to continue paying the escalating price of buying power from the utilities.
"You're going to see that there's a return on your investment," said Garnon. "If it's going to be sooner than you expected or later on, it should not stop you from making that decision to go solar. Because either way you're going to pay that money—if not more—staying on the grid."
Critics of the current net metering system said it gives a huge financial advantage to people wealthy enough to afford the cost of a solar power system. They said that pushes the cost of maintaining the grid onto lower-income people who can't afford to buy solar.