Solar rooftop owners will continue to receive full retail rates for the extra power they generate and send back to the grid following a close vote Thursday by the California Public Utilities Commission.
The narrow 3-2 vote was largely the result of reservations among some commissioners about last-minute changes to the proposal, submitted on Wednesday. The changes included the removal of transmission charges for customers who participate in the solar rebate program. Dissenting commissioners said the loss of those charges shifts too many maintenance costs onto other ratepayers.
“Any system that benefits the few at a cost to the many can only be sustained for so long,” said Commissioner Mike Florio, who voted against a plan to extend the state's so-called "net metering" program.
Florio also expressed dissatisfaction that the updated proposal did not reflect the added financial benefits prospective solar owners would receive from recently extended federal tax incentives. He said he didn't believe the new program's structure would be sustainable.
“Eventually, the compensation for solar is going to have to more closely match the economic benefits that solar provides,” Florio said.
Still, the majority of commissioners felt the proposed extension of the program was necessary to stimulate continued solar development.
“Our course is not for the rooftop solar industry or for the utilities or the community clean energy aggregators," said CPUC President Michael Picker. "Our decision today is another big step toward giving California consumers more choice, more control, and more responsibility over energy and climate change issues. It’s a big step, but it’s only one of many.”
Solar advocates hailed the decision.
“We all know that California is a world leader when it comes to being ‘green’,” said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association (CALSEIA), in a written statement. “But today’s vote is more than that. It is about California continuing to champion innovation and a different way of doing things, in this case, building a smarter energy grid and allowing individual consumers to generate their own clean electricity.”
Representatives from Southern California Edison, which had fought the new plan, were not immediately available for a comment.
Over the past few weeks, Edison and other utilities had squared off against solar advocates over what the new terms of the popular solar incentives program should be.
Net metering provides credit to rooftop solar owners for the excess energy their systems generate and send back to the grid. That program is likely to begin expiring this year for customers of the state’s three investor-owned utilities: Southern California Edison, San Diego Gas and Electric and the Pacific Gas and Electric Company.
Southern California Edison had proposed a replacement plan of its own, saying the commission's proposal still pushed grid maintenance costs onto other ratepayers. The company estimates nearly $17 billion would be shifted onto other customers from 2017-2025 under the plan.
“We’re looking to see if the commission can make some changes that will allow a little bit more fairness for the vast majority of customers who don’t participate, in terms of the cost sharing,” Southern California Edison spokesman Robert Villegas said Wednesday.
The company estimates it provided $270 million in credits to net metering customers in 2015. Villegas said on average those customers are paid at a rate of 26 cents per kilowatt hour (kWh).
Edison’s proposals included setting a fixed rate of 15 cents for each kilowatt hour of excess energy solar panels provide instead of continuing to credit solar owners at market rates. Currently, 15 cents is the lowest rate the company charges for energy. Edison proposed further reducing the rate to 13 cents/kWh once a seven percent demand threshold is met.
The company also proposed halving the amount of time that a homeowner could benefit from net metering to 10 years.
Villegas said his company’s proposal would still allow solar rooftops to thrive.
“We would expect to see solar installations grow at over five times, compared to today’s level, by 2025, in our proposal. So we’re not looking at hurting solar. I mean, we’re talking a five-fold growth over the next decade, under our proposal,” Villegas said.
Solar advocates, however, said the proposals, if accepted, would make the costs of installing solar rooftops no longer feasible for most homeowners.
“When you put pen to paper, and you model out what the utilities are proposing, even with this revised proposal, it would basically cut out the market. Most people would not be able to afford to go solar,” said CALSEIA's Bernadette Del Chiaro.
Del Chiaro called into question the cost figures utilities are using to justify their proposals.
“The utilities are using wrong math. They simply are — in fact, in some cases, some of the things we’ve seen them put out is outright lies,” Del Chiaro said.
She said the utilities’ claims of unfairness mask the desire to maintain profits by keeping homeowners from generating power on their own.
“At the end of the day, people that go solar are doing right by our planet, and they’re doing right by everybody’s pocketbooks,” said Del Chiaro. “The utilities simply exaggerate what those costs are and do it in a way that, ultimately, what the proposals would do is kill the market and kill competition.”
Proposed decision from CPUC (accepted):
Southern California Edison's proposal: