California Preserves Solar Incentives In Defeat for Utilities

California regulators upheld "net-metering," which makes home solar systems more financially attractive. (Dennis Schroeder/NREL)

In a major victory for solar power companies and their customers, California regulators voted to preserve an incentive program that has fueled the dramatic growth of rooftop solar in the state.

The program, known as “net energy metering,” means that homeowners with solar are paid by their utility for the extra electricity they feed onto the grid when they make more than they need at home.

“Our decision today is big step forward in giving California consumers more choice, more control and more responsibility over their energy choices,” said Michael Picker, president of the California Public Utilities Commission.

The ruling comes after years of contention between solar companies and electric utilities over the future of solar incentives in California. Similar battles are happening in several other states, as solar continues to expand, eating into the electric utility business model.

“We are extremely disappointed that the CPUC did not take the opportunity to meet the important goals set out by the state’s legislation,” wrote PG&E spokesman Ari Vanrenen, in an email to KQED, “and make the smart energy reforms that are needed to ensure a sustainable market for solar in California.”

What’s Net-Metering?

Net-metering often results in monthly utility bills that are close to zero for customers with rooftop solar panels. Consumers still buy electricity at night, when their solar panels aren’t producing, but they can largely offset that cost by selling electricity back to the utility at the peak of the day.

California’s three major investor-owned utilities, including Pacific Gas & Electric, argued that the low bills mean solar customers aren’t contributing enough to maintaining the electrical grid, including transmission lines. As a result, utilities say that non-solar customers have to cover that shortfall by paying higher rates, subsidizing solar customers.

Solar companies argued that those calculations ignore the benefits of solar power, which could help utilities potentially avoid buying electricity from power plants or building new transmission lines. By law, utility profits are tied to investments in infrastructure, not how much electricity they sell.

Commissioner Picker admitted the decision, which he called “a painful, challenging process,” didn’t fully evaluate the true costs and benefits of solar. “This decision doesn’t get everything right but it gets us farther along,” he said.

Solar_FullSize_Layers_creditUtilities made a last-ditch effort to change regulators minds’ over the last month, but the final vote went against them, 3-2.

The decision lies in stark contrast to Nevada, where regulators recently voted to overhaul the state’s net-metering program by increasing monthly fees for customers and reimbursing them less for their power.

Solar companies are fighting the Nevada decision, but say it renders solar financially unfeasible there. SolarCity announced it would eliminate 550 jobs in Nevada.

“I think that this sends a big message to the nation, for California to stand up and say ‘we’re proud of the solar we have and want more’,” said Brad Heavner of the California Solar Energy Industries Association.

Changes to Solar Incentives

The decision does, however, mean slightly higher rates for solar customers.

New solar customers will pay an interconnection fee of $75-150. They’ll also pay a monthly charge on each kilowatt-hour of electricity they buy from their utility of around 2 cents, which would be in the range of $5-9 dollars a month for an average system.

The CPUC says those additional charges will cover the cost of mandated utility programs like low-income customer support and nuclear decommissioning.

Two of the five CPUC commissioners who voted against the decision wanted to see a charge for the transmission grid included in that.

“Any system that benefits the few at the cost of the many can only subsist for so long,” said Commissioner Mike Florio.

Current solar customers won’t be affected by today’s decision and are “grandfathered” into the program at their current rates for 20 years.

New solar customers will also see electricity prices that change based on the time of day. Under “time-of-use rates,” electricity is the most expensive in the late afternoon and evening, when demand on the grid is highest.

The solar industry’s win could be only temporary. The CPUC will revisit the net metering system in 2019. Some commissioners say they anticipate that by that time, a more “mature” solar industry may not need as much support.

California Preserves Solar Incentives In Defeat for Utilities 29 January,2016Lauren Sommer

  • jskdn

    The defeat is for non-solar customers who will continue to have their money given to solar customers and the solar industry as the three PUC commissioners show their disregard for fairness. When solar customers don’t pay their share of the costs of the electrical system, non-solar customers are forced to make that up.

  • Marin350

    The costs of not figuring out a better way to maintain and modernize the grid throughout the country make discussion of who should pay in a particular state extremely short-sighted. There needs to be huge changes to accommodate as rapid a build-out of wind and solar as we possibly can. Fairness to the planet and all the living things in it, including pricing in the health costs to all of us because of our continuing reliance on un “natural” gas (methane leaks in Aliso Canyon anyone?) and coal should be considered in looking at the total system. The CPUC decision was good because it places the priority on going renewable with the most efficient energy possible. The utilities’ business model is incredibly outdated and counterproductive to our needs today.

  • GeorgeisGordon

    I have what I think is a far-sighted policy for solar energy which reflects the reality of where the science and capability is going, not the financial and political fortune of those who today happen to hold the reins to a monopoly.

    Open the grid to everyone.

    Today in California the grid suppliers roster is open to the classical, monopolistic utilities and large energy production companies. Why can I not just stand next to them and sell my excess solar production to others on the grid, and also buy from others when I need to do so? Years ago this would have been impossible logistically, but with today’s internet such a system could be implemented quite easily — just expand the role of the California Independent System Operator. Let me compete with PG&E to sell my short-haul excess electricity to my neighbor — or give it to my mother — or donate it to my church. Have the ISO collect a tax proportional to the electricity to fund the grid.

    Step back and look where the future is? Solar production AND storage will soon cost less than the utility model, and customers will just disconnect themselves from the grid entirely. Do you think that the utilities will be successful in having legislators dictate a fee for all electrical users — even if they get nothing? Not for long, if ever.

  • Samuel Mullins

    I don’t know whether “we” government already pay for grid maintenance through grants or is that only installation and add-ons? If required to run a bonafide Pres Jimmy Carter honest business they will go nuts. Certainly no one is sold less than retail price but I never see billing that only itemized only user content. Always even Celluar includes infrastructure recovery-fees for government satellites, accounting bookwork for billing, then my bank statement charges $2 for only stationery, handling and postage. I presume utility companies are liars like their lawyers charging solar & non-solar customers adequately beyond retail price because losses they claim are not even part of retail price. Likely they were scamming over-payments in the beginning but now are cry-babies because scamming ends.

    • Samuel Mullins

      Same as Wallstreet: Corrupt accounting, bribed and understaffed regulators (Reagan-omics) conspires defrauding customers, investors, and General Purpose via upper-management bonuses. Am I friends with anyone?

      What is being there, and should how togetherness is meaningful be dictated by rivals? I am thankful for awareness of being another nigger in this nigger-factory world, and for prayer-goals to begin societal improvement with self-improvement simultaneous when feasible. Grace as victimized field-niggers have for house-nigger victimizors becomes efficient when adequate attention resolves the predicament along with the predicamented.

      Glossary preference was not prison-factory nor demonic-possession because people do not ordinarily understand how they are culpable as prejudiced consensus indicts culpability as immorally motivated, refusing consistently adequate moral options. As slaves can be oppressed or suppressed to unawareness their literacy even many awarenesses/enlightenments have been withheld by complexes. War ignorance often mislabeled prejudice is when both rivals’ are unaware their closed-mindedness bases upon data-corruption, when improvement for close-mindedness is lacking.

      Pacing myself for consistent best absolves me from both permanent and temporary inferiorities. Superiority complex attitude and talk is more survivable than its covertly competitive BEHAVIOR misdeeds, which actually mask complexes of insecurities and inferiorities. I agree with Christ preferring to be hated for God’s partiality, instead of frightening for my badness (the devil’s partiality). Predestinator’s favor upon Christ frightened moral authorities into political assassinatings.

      It is just to be first recipient of my creatings when simultaneous is not feasible, and okay to be too good for my own good because 4th 5th 6th & 7th places are not forgotten nor despised by me. Being good in return towards them 2nd place who have been good towards me is part of keeping good company good. As soon as we can become too good for our own good then we are agency sharing charitable planning towards self-improvement goals of strangers and enemies. Yes I do not need to be a pig of dynasty, harem, nor popularity with them greedy, because it is okay for me to not hate being better at many things, since I cannot immediately resolve being created like this. I am Uniquely Insane Samuel Mullins and I stand by this message.

Author

Lauren Sommer

Lauren is a radio reporter covering environment, water, and energy for KQED Science. As part of her day job, she has scaled Sierra Nevada peaks, run from charging elephant seals, and desperately tried to get her sea legs - all in pursuit of good radio. Her work has appeared on Marketplace, Living on Earth, Science Friday and NPR's Morning Edition and All Things Considered. You can find her on Twitter at @lesommer.

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