The California Public Utilities Commission on Thursday passed a proposal that left a shock for its residents. A program that assisted 1.5 million homes and businesses install solar panels on their roofs and established the state as a leader in the fight against climate change was severely curtailed by the state on Thursday.
The net metering program, which pays homeowners through payments, was deemed by the five members of the California Public Utilities Commission to be an overly generous subsidy that was no longer required to promote the use of solar panels.
After a decade of controversy surrounding the program, the state commission voted unanimously to reduce payments to solar customers for the electricity they generate. According to critics, it has led to higher electricity bills for homes without rooftop solar panels, including low-income families who cannot afford them.
Starting in April, the proposal adopted on Thursday will mean that the remuneration for the energy generated by rooftop solar residences that are supplied to the grid will be roughly decreased by 75%.
In response to this shocking move by the state, solar companies and proponents of renewable energy have claimed that reducing the compensation would slow solar installations and jeopardize the state’s attempts to combat climate change.
Due to the fact that other states’ regulators frequently imitate California’s actions, the nation is anticipating widespread repercussions which may further fail their efforts to fight the global catastrophe that is climate emergency. Many utilities have long opposed net metering, claiming that it unfairly values the electricity generated by rooftop solar panels and fails to adequately account for the cost of maintaining electric grids.
Rooftop solar panels are installed on more than 1.5 million homes, buildings, and other utility customers in California. According to the utility commission, these installations are capable of producing 12 gigawatts of electricity all at once.
Likewise, the costs won’t decrease for houses and businesses that already have solar power. And customers of the Los Angeles Department of Water and Power who choose to switch to solar won’t experience any changes. The three major monopoly utility companies in the state—Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric—are the only ones whose rates for solar energy are impacted by the ruling.
The nonprofit ‘Affordable Clean Energy For All’, the organization funded by California’s utilities has also argued that the rooftop solar program is out-of-date and that utilities must pass on the costs of subsidies.
While ignoring such weak justifications, leaders in the solar industry slammed the changes as being incompatible with the state’s plan to supply the grid with 100% clean energy by 2045 and warned that they might slow the expansion of rooftop solar. According to a report published earlier this year by energy research firm Wood Mackenzie, the state’s solar incentive program changes could reduce California’s solar market in half by 2024.
Looking back, the solar industry and a large number of environmental and community organizations were able to persuade Gov. Gavin Newsom to veto a previous Public Utilities Commission proposal that would have been even harsher to rooftop solar, claiming that it would conflict with the state’s efforts to combat the worsening wildfires, droughts, and heat waves brought on by global warming. To their dismay and for the thousands of residents in California, the latest move is certainly not music to the ears.
On the whole, the dissidents’ only consolation is that the commission chose a less extreme course of action than it had suggested a year earlier. The earlier proposal would have added new monthly fees to the utility bills of rooftop solar homes in addition to reducing payments for excess power sent to the electric grid.