The way things are going in California, you wouldn’t expect its solar industry to be in peril. The state may be in the midst of an increasingly dangerous and exceedingly costly drought, but in terms of energy and environmental policies, it’s among the most robust in the nation. In the last two years, California has voted to ban plastic microbeads in its cosmetics, get rid of plastic bags and just recently committed to generating 50 percent of its electricity from renewable sources in the next 15 years. In fact, as one of the 10 states with the most solar electricity installed per capita, California is already halfway there.
So it would seem that the future of solar would be secure in the Golden State. But it isn’t.
Net-Metering Is Good (but Only for Customers)
In 2013, the California legislature passed AB 327, a bill that did a lot to secure the state’s solar policies at the time while kicking certain problematic issues down the road. Chief among them, how the state’s energy utilities will handle net-metering for its rooftop solar customers.
If you’ve never heard of net-metering, it’s likely that you don’t own rooftop solar – but with solar prices rapidly declining, it’s something you may be considering. And you should, because many states allow solar customers to take advantage of a great deal known as “net-metering.”
Here’s how it works: If you own a set of solar panels, those panels generate electricity for your household – electricity that you make yourself without having to tap into your local grid. And because you may end up generating more electricity than you need, many states allow solar customers to, in effect, sell this energy back to the grid. For a solar customer, this means their excess energy is credited to their account, their meter runs backward, and they are only billed for the net energy they consume from the grid. Meanwhile, the energy they feed back into the grid goes to help customers who don’t have solar panels.
It’s a neat system. At least it is until the utilities start losing money.
California’s three major utilities have set limits in place for how much net-metering they’re willing to put up with. Each has a cap for how much net-metering capacity they’ll allow before prohibiting new users from taking advantage of it: Pacific Gas & Electric – 2,409 megawatts, Southern California Edison – 2,240 MW, SDG&E – 607 MW.
Once the utilities reach their capacity, they argue, new solar customers should not be able to net-meter but instead have to participate in a “buy all, sell all” system, or Feed-in Tariff (FiT). Basically, what this means is that, after 2015, California solar customers will have to sell back any solar energy they do not immediately use. They will effectively be forced to buy electricity from their utility and sell the rest of their on-site electricity back to the grid at a pre-determined price.
And if you’re thinking about buying solar panels, that might piss you off.
Each of the three utilities has a different idea of what that FiT price should be, and VoteSolar has a good breakdown of what they are. No matter the plan, though, this system significantly de-incentivizes solar for consumers.
Time Is Running Out
Under AB 327, the California Public Utilities Commission (CPUC) requires utilities to submit a new rate structure by the end of 2015. As of July, the majority of utility customers must pay a $10 monthly minimum charge, but a new filing with the CPUC by the utilities would add fixed grid access fees, demand charges based on peak consumption, time-of-use pricing and interconnection charges for solar owners.
The utilities, for their part, insist that the new rates are necessary to keep grid prices fair for non-solar customers, but solar advocates vehemently disagree.
“They vocally say they support solar,” said Lyndon Rive, co-founder and CEO of SolarCity. “But then this proposal clearly states, they want to kill solar. Let’s stop kidding each other – no, you’re trying to kill solar.”
What Californians Can Do
Save Rooftop Solar has created a petition for California residents to urge Governor Jerry Brown to action.
“We should be growing solar through smart policies like net metering. Net metering enables families, schools, businesses, and public agencies to save on their utility bills through solar power,” the petition reads. “Local clean power reduces air pollution, creates jobs, and can lower energy costs for all members of our communities.”
Planet Experts fully endorses this petition and we urge all our fellow Californians to sign it.