The new proposal of regulators in California about lowering subsidies and adding new fees for domestic users has rattled the solar industry. The sector was benefiting from the successful program to help customers go green.
According to a Judge of the California Public utility commission proposal, the residential solar customers would be allowed a lower credit for the excess electricity consumed. The rooftop solar users will also have to pay a connection fee for a new grid that would be an average of $40 per month.
The changes are meant to influence customers to install batteries and save solar energy so that the evening electricity shortages faced by California when the solar production fades can be taken care of. The deficit has required the usage of expensive natural gas generators in an interview with Martha Guzman Aceves, the Commissioner of California.
The “net energy metering,” the California incentive program, spends about $ 3 billion annually supporting it. According to Aceves, the reforms will help give incentives for the Solar grid that benefit all ratepayers.
The new proposal would destroy the subsidy plan and threaten thousands of jobs. The increase would mean the highest solar fees in the U.S. and threaten California’s clean energy legacy.
According to the solar energy association CEO Abigail Hopper, the new fees can be afforded only by the wealthy in California. They will shut out the average family, schools, and small businesses from clean energy in the future.
The new proposal will impact the business of roof solar panels across the U.S. of an industry valued at $13 billion per annum. A significant cut in incentives would result in lower installations in California, the state with the most extensive solar use, and this will prompt other sunny conditions to follow. The issues have divided consumers groups, environmental advocates, solar firms, and utilities.
The shares of Sunrun Inc., the largest Solar roof installer, fell by 4.8% after the announcement before closing the trading at 0.5% lower.
Affordable Clean Energy for All, a group backed by utilities, has supported the change. The latest judgment intends to minimize inflated subsidies that impose an unfair economic burden on the elderly, low-income communities, renters, and other working Californians who are unable to install rooftop solar systems.
New Credit System
The new credits from 10 cents to 30 cents per kilowatt-hour will be allowed depending on the time of day. Currently, the credits range from 17 cents up to 44 cents per kWh during summer.
Customers who already have rooftop solar panels will migrate to the new rates after 15 years of grid connection. The residential customers will get a four-year credit which will help them migrate to the new rates that will allow them to pay back in 10 years the cost of a solar energy storage system and solar.
The state will provide a $600 million fund to help residents with low-income access solar.
