Program that pays homeowners for solar power could extend for 20 years

Solar advocates are hailing a proposed decision by the state’s energy utility regulator to continue a popular program that pays money to customers with solar panels for the excess power they produce.

The program known as "net metering" allows owners of solar panels to get full retail rates paid back to them for electricity they send back to the grid.

The current net metering program in California is set to expire in July 2017. It will likely end earlier, because the program also caps the amount of participation in solar at five percent of peak energy demand. The three investor-owned utility companies the proposed decision affects — Southern California Edison, San Diego Gas and Electric and the Pacific Gas and Electric Company — are expected to hit their caps next year. 

The proposed decision by the California Public Utilities Commission (CPUC) extends the program for customers who install their solar systems after the existing net metering program ends.

Net metering has been a bone of contention between solar advocates and utility companies. Some solar advocates called the proposed decision a success, because it retains many of the same provisions that the current program does.

“This proposed decision is, in essence, the Brown Administration rejecting the utilities’ attempt at causing harm to the rooftops — wholesale catastrophic harm to consumers’ ability to go solar,” said Bernadette Del Chiaro, executive director of California Solar Energy Industries Association (CALSEIA).

The proposed decision keeps the full retail rates in place for customers for 20 years from the year that they connect their solar system to the electrical grid. It institutes one-time connectivity charges, estimated by the CPUC to range from $75-150.

Other changes to the program require participants to pay “non-bypassable charges” for electricity, which provide funds for low-income and efficiency programs. Del Chiaro said the charges would amount to an estimated $10 per month for the typical solar homeowner.  

The decision would also require participants who sign up in 2018 or later to be on a "time of use" rate structure that would charge or credit electricity based on the demand during the time of day it was used. Such a structure would likely lessen the value of the electricity credits received by homeowners, because the electricity they send to the grid would mostly be generated at a time when demand is lower.

Del Chiaro, while not opposed to the time of use rates, said the mandate would reduce flexibility in options for solar customers. An official with the Sierra Club also urged caution in adopting the structure.

"A thoughtful, gradual transition to time of use rates for solar customers will enable the market to continue growing rapidly, while incentivizing Californians to use their home-generated power in a way that provides maximum value to our increasingly renewables-dominated grid,” Evan Gillespie, Director of the Sierra Club’s My Generation campaign, said in a written statement.

Southern California Edison issued a statement on Tuesday afternoon, expressing disappointment in the proposal, saying the program unfairly shifts costs onto non-participating customers. 

“This cost shift is not necessary, and this proposed decision continues this unfair burden. SCE wants rooftop solar to expand in California, and there is a more balanced way to get this done”, said Ron Nichols, senior vice president of Regulatory Affairs for SCE, in the statement. “A much more fair approach would maintain some level of subsidy, but at far lower levels, while rooftop solar continues to grow.”

The proposed decision is scheduled to be voted upon by the CPUC board on January 28. Del Chiaro said her organization would push for more relaxed timelines for some of the proposed changes and fight to keep other provisions in place.

“I would say this is a very good start, and we would hope that the final decision gets a couple of details right, but ultimately, the most important thing is that the CPUC resists bending toward the utilities’ pressure that they’re going to undoubtedly unleash on the CPUC over the next 30 days,” Del Chiaro said.

The proposed decision does not apply to municipal utilities, such as the Los Angeles Department of Water and Power or Glendale Water and Power, which have their own net metering programs. Del Chiaro said, however, the decision could set the tone for how those programs operate in the future.

“It creates an important precedent for the Department of Water and Power and the other municipal utilities to follow, assuming it remains a strong and good precedent,” Del Chiaro said.

Proposed decision