California PUC proposes changes for rooftop solar

The California proposal issued by an administrative law judge at the California Public Utilities Commission on Tuesday offers rooftop solar installers “very significant positives that should secure profitable growth for the industry after 2016”, Patrick Jobin, an analyst for Credit Suisse Group AG, said in a research note.

However, the CPUC’s proposed decision would also shift residential solar customers to time-of-use rates slightly quicker than non-solar customers.

Pacific Gas and Electric Company (PG&E) today said that the California Public Utilities Commission (CPUC) must do more to ensure that rooftop solar can continue to grow as a clean energy resource for Californians for years to come.

In a statement, utility San Diego Gas & Electric, one of the utilities that had been pushing for NEM tariffs to be slashed for solar customers, said: “We are disappointed that today’s proposed decision on the rooftop solar subsidy does not address the growing cost burden among our customers”.

Per the proposal, California will end its current net metering program and new solar customers will fall under the new rules either when their utilities hits a cap on rooftop solar (5% of total generation) or by Jul 2017, whichever criteria is fulfilled first.

The California fees and charges are less than those proposed by utilities, the California Solar Energy Industries Association said in a statement. Under the proposal, net metering customers who sign up in 2018 or later must utilise time-of-use rates as soon as they sign up, while customers who sign up before 2018 must utilise time-of-use rates beginning when all residential customers go on default time-of-use rates in 2019.

Some people are afraid that making rooftop solar users to pay for utilities they are not using anymore will discourage the use of renewable energy, as people will no longer see the benefits of it. It was no surprise that solar companies applauded the commission’s proposal.

The new rules are expected to phase in before July 2017. The utility is also pushing for a new “demand charge” based on the peak amount of electricity each solar homeowner uses in a month.

Net metering has been a bone of contention between solar advocates and utility companies.

Utilities reacted negatively to the CPUC proposal, which is open for public comments until January 7, and could be voted on by the full commission as early as January 28. That, in turn, could be a potential upside for solar systems that are linked to batteries, smart thermostats, or other behind-the-meter resources that can manage demand as well as supply, O’Rourke said. Generally, the solar industry was pleased with the decision. It said that Californians “shouldn’t be penalized with higher electric bills just because they are unable to afford or accommodate solar on their rooftops”. That includes figuring out the costs of maintaining the grid when so many distributed solar systems are connected. The proposed decision finds that NEM successor customers should pay for non-bypassable charges on all energy they consume from the grid, regardless of the amount of energy they have exported to the grid.

“They can pay that fee without jeopardizing the economics of the installation”, said program supervisor Sara Kamins.

The industry estimates that 3 percent of California utility customers have solar. In addition, they are paid more than market rates for excess electricity that they generate, despite solar costs falling more than 50 percent in the last six years.

Under the new program, owners of the solar system would have to use time-of-use rates, which will determine the electric energy consumption at any time during the day.