California proposes new renewable energy policy impacting solar panel makers

Pattern Energy’s Futtsu Solar Power Facility in Futtsu-shi, Chiba, Japan

California, as part of a new renewable energy policy, proposed reducing the rate at which homeowners can sell excess electricity from their rooftop solar panels into the grid.

The solar panel installation industry criticized California Public Utilities Commission’s announcement, saying such proposals could darken the outlook for new projects and undermine the state’s efforts to combat climate change, Reuters reported.

The PUC justified the proposal saying it would encourage the solar industry to accelerate battery storage technology so excess power can be held in reserve instead of sold, while undoing a policy it said amounted to a multi-billion dollar subsidy for wealthy homeowners at the expense of other utility ratepayers.

Under the proposed reforms, Californians with new solar installations would see a discounted rate for power they sell into the grid and a monthly utility charge of $8 per kilowatt to cover the cost of maintaining the grid.

The PUC said existing solar owners would be moved to the new structure once their installations have been connected for 15 years. But, they would be offered an incentive to pair a battery with their solar installations before then, which would push them on the new rates sooner.

The changes could impact the outlook for utilities and solar providers – including big panel installers like Sunrun, Tesla and SunPower — and could also provide a cue to other states that tend to take California’s lead on clean energy policies.

California is home to about 40 percent of the nation’s residential solar energy capacity.

The PUC said its review of the policy found it was not cost-effective and harmed homeowners without solar panels by shouldering them with the price of maintaining the grid. Those ratepayers are disproportionately lower income.

It said California ratepayers spent about $3 billion a year to support net metering.

“If you use that money to purchase the large-scale clean energy projects, we would be able to meet our 2045 goals of producing all the state’s electricity from clean sources,” PUC Commissioner Martha Guzman Aceves said.

The Solar Energy Industries Association, the nation’s top solar trade group, slammed the announcement, saying the changes would create the highest solar tax in the country and tarnish the state’s clean energy legacy.

Affordable Clean Energy for All, a utility-backed group, said the decision recognizes we can grow rooftop solar in California while taking steps to reduce inflated subsidies.

The PUC could vote on the proposal as soon as next month, after receiving stakeholder feedback. The new policy would take effect four months after a final decision is issued.