January 14, 2016

Solar Advocates and Utility Companies at Odds Over Future of Solar in California

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There has been growing friction in California between solar advocates and utility companies about the future of solar power in the state. As the solar industry has grown, many utilities have become increasingly wary of losing customers and profits, and two recent issues in California highlight that conflict. 

Net Metering

One of the economic benefits of purchasing a solar array for your rooftop is that you can get paid for sending excess energy captured by your array back to the grid. The rate that solar energy producers get is referred to as net metering, and it can help homeowners make up the initial cost of a solar conversion in as little as five to seven years.

“What net metering looks like determines the economics of solar power,” said Bernadette Del Chiaro, Executive Director of the California Solar Energy Industries Association. “And we need to make the economics of solar more affordable.”

Utility companies in California have recently made proposals to the California Public Utilities Commission that would lower the rate they pay to solar producers or add fees to solar customers’ bills. Utility companies argue that current rates aren’t holding solar households to the same level as other customers when it comes to maintaining the power grid’s infrastructure.

Solar advocates argue that solar power also provides a public good — namely reducing carbon emissions that fuel climate change — and those who have switched to solar shouldn’t face economic pushback.

One proposal to the California Public Utilities Commission calls for paying solar customers half the retail rate for the power they supply back to the grid. That would make for a dramatic cut in savings to solar users who have to rely on the grid as a back up.

“To me, this is like depositing $100 in the bank but when you go to take it out, it’s only worth $50,” said Michael Powers, who founded a solar company in California.

Experts say a change to net metering could be coming, but it’s unlikely to be as dramatic as some proposals put forth by utility companies as there is interest in keeping financial incentives for customers to adopt renewable power.

“I couldn’t have imagined these types of proposals getting any attention five years ago, but the solar industry has been so successful that there are real concerns about being fair to all customers,” said Andrew Campbell, Executive Director at the Energy Institute at Berkeley’s Haas School of Business. “If the utilities proposals are adopted as is, it could have a very significant impact on residential rooftop solar.”

Cutting Back on Fossil Fuels

California has also seen some pushback from oil companies over plans to dramatically reduce the state’s use of fossil fuels. In early October, California Gov. Jerry Brown signed a new law committing the state to using 50 percent renewable energy and making existing buildings twice as energy efficient by 2030. Brown originally pushed for a bill that would also enforce a 50 percent drop in petroleum use, which was opposed by oil companies.

Brown called the reduced bill a temporary setback and pledged to keep moving the state off fossil fuels.

“What has been the source of our prosperity now becomes the source of our ultimate destruction, if we don’t get off it. And that is so difficult,” he said.

Although the new law isn’t everything Brown wanted, experts are calling it a win for renewable energy like solar.

“It’s monumental,” said Alex Jackson, an attorney with the Natural Resources Defense Council. “For an economy the size of California to commit to getting half of its power needs from renewable energy resources, I think, is a game-changer.”

If you’d like to find out how installing solar panels on your roof can help you drive your electric bill down to zero, contact us today for a free quote.




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