SACRAMENTO, Calif. — California regulators on Thursday proposed changes to the state’s residential solar market aimed at encouraging more home battery systems that can help the power grid become less reliant on fossil fuels in the evening, especially during surges. heat.
This is the California Public Utilities Commission’s second attempt to update the state’s incentive program for solar home systems. Last December, the commission proposed new fees for solar customers and cut subsidies for installing rooftop panels, which utilities wanted but solar companies warned they would cripple the industry by booming and impede the state’s transition to clean energy.
Solar panels power 1.5 million California homes, creating by far the largest home solar market in the country. The state has set ambitious goals to transition from fossil fuels to renewable energy sources such as solar and wind to power homes, businesses and cars.
Under existing rules, solar customers can sell the extra power they don’t use back to their power company for a credit on their bill.
California’s three major utilities – Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric – have argued that the payment is so generous that solar customers aren’t paying their fair share of the overall cost of the electric grid, that ‘they count when their panels aren’t producing electricity. Electricity rates include other costs such as electrical transmission and forest fire prevention work.
About $4 billion in costs are shifted from solar customers to non-solar customers, according to an estimate from a utility-backed coalition called Affordable Clean Energy for All. When solar customers pay very low bills, due to credits, they pay less into the overall energy grid. The solar industry argues that this figure does not take into account contributions to grid reliability and other benefits offered by rooftop solar.
Kelly Hymes, the administrative law judge who drafted the commission’s proposal, acknowledged the change, noting that the state’s current system hurts non-solar customers, disproportionately negatively impacting low-power utility customers. income, and “is not profitable”.
The new proposal reduces the amount of money people receive to sell their extra energy. But that doesn’t include the solar-specific charges the utilities wanted. It creates new financial incentives for people to install home storage systems to capture extra solar power during the day. It also changes electricity rates to encourage people to export stored energy to the grid in the late afternoon and early evening, when the grid typically switches from renewable sources to fossil fuels.
The five-member public utilities commission has until mid-December to discuss the proposal. If they approve it, it won’t go into effect until at least April 2023.
People who already have solar panels and storage systems would see no change in their bill credits; the plan would only affect new customers. It also guarantees a better rate for people who install over the next five years in a bid to encourage more homeowners to enter the solar market now, although the solar industry says it’s too small to have any importance.
Today, it takes about five to seven years for bill credits to cover the cost of installing solar panels, and longer for storage systems, said Bernadette Del Chiaro, executive director of California Solar & Storage. Association. The average solar and storage system costs about $26,000 taking into account new federal tax credits that cover 30% of the cost, she said.
About 150,000 people add solar panels each year, and between 16% and 20% of those installations include battery storage, she said.
The latest attempt to strike a balance between utilities and the solar industry has drawn more criticism than praise. The utility-backed coalition said it “fails to make meaningful reform necessary” to ensure a fair distribution of costs, while the California Solar & Storage Association said the proposal would “really hurt” the industry by making home solar panels less affordable.
The changes, if enacted, would apply only to customers of Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric.
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