Net metering is at the center of a debate in California, as the state’s power utilities have asked officials to reduce the amount of money homeowners can make selling their excess electricity to the state’s grid; a proposal that would slow down the widespread adoption of solar rooftops.
Firstly, diverse policies in California have made the state the nation’s biggest market for net metering; the practice in which homeowners install solar panels in their house’s rooftops, and then sell their excess energy to the grid, at almost the same retail price rate.
Secondly, this scheme has created a rooftop solar bonanza in the state; however, grid’s maintenance costs are being transferred to non-solar related customers, who are typically less wealthy as those who participate in net metering.
Consequently, over this week utilities, and solar industry representatives have met with the California Public Utilities Commission to discuss potential policy changes. According to Reuters a final decision will occur this very week, and would come into effect in 2022 or 2023.
However, this net metering market has allowed the insurgence of a market, in which Sunrun Inc and Tesla are big players, among over a hundred of local solar rooftop installation firms. On the other hand, the power industry argues that grid’s maintenance costs are being transferred to other clients without panels.
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Changes in net metering could hit energy transition efforts
Therefore, utilities are looking for ways to bring down the price in which solar clients sell their energy. Among the utilities involved in the debate are the Pacific Gas & Electric, San Diego Gas & Electric; and also, the Southern California Edison. They recommend monthly charges to solar owners that would range between $49 and $79 for a 5-kilowatt system.
Nevertheless, solar trade groups disagree; in contrast, they propose a gradual reduction in the net metering rate over five years. So that, by 2027, the rates would be between 25% and 50% lower than they are today. This initiative is mainly pushed by the Solar Energy Industry Association.
In addition, they argue that slowing down solar adoption would hurt the state and the country to achieve carbon neutrality. Specifically, California’s goal to decarbonize its economy and power sector by 2045.
Finally, Bernadette Del Chiaro, director of the California Solar & Storage Association, said in an interview. “If we really put the brakes on rooftop solar today… we’re going to be in a world of hurt in 10 years when we wake up and realize ‘We actually needed to build more solar panels.”