The proposed cut in incentives for small green energy system means that rooftop solar owners in California would lose out on monetary incentives unless they paired batteries with the system.
As per the Bloomberg news report Thursday, the new proposal would mean the owner of solar systems will have a more extended payback period of 11 years. The addition of a battery will reduce it to six to eight years. However, it is typically seen that Homeowners use a rooftop solar system that gives payback in less than eight years.
Though the changes are dramatic, the commercial and residential solar system market remains pretty big, as Pol Lezcano, author of the report and solar analyst at Bloomberg NEF. According to him, the installations of solar systems will not halt or reduce but will speed up the battery usage with the solar systems instead.
After the proposed incentive cut, the solar system sales for home looks to slow down. The regulators in California shocked the solar industry with its sharp drop in offering credit for excess solar usage by homeowners and the new connection fees. Advocates of Solar systems say that the proposal will devastate the industry if enacted in the largest U.S. market for Solar.
According to the regulators, the reforms are necessary to ensure solar customers pay their share of the power grid costs. The adoption of batteries is encouraged to store the energy during the daytime and use it later when the sun goes down, thus lowering the burden on the utility suppliers.
Lezcano has forecasted that if the new laws are enacted in the current form and credits of solar tax get extended for ten years, solar installations in the state will be lower than earlier forecasts.
The regulators are to make a final decision about rooftop solar incentives in the next year.
