Solar power supports slam new California proposal for reducing subsidies


  • Under the proposed regulation, solar consumers would receive less money for the excess power they create. It’s called net-energy metering, and it charges customers a monthly fee to connect to the grid.
  • Proponents argue that the proposed improvements, dubbed NEM 3.0, are intended to encourage customers to install power storage devices. Furthermore, it is claimed that today’s approach is detrimental to low-income ratepayers.
  • However, the solar industry has expressed concern that the new laws will delay adoption.

Proposal of Major Changes

California regulators recommended significant modifications to the state’s solar incentive program on Monday. The industry supporters have bitterly resisted this move.

The new regulation will lower payments made to solar consumers for excess power generated, a policy known as net-energy metering, as well as increase monthly charges. These adjustments would apply to new customers as well as existing customers and businesses using rooftop solar panels.

The planned improvements, known as NEM 3.0, are intended to encourage consumers to install battery storage systems alongside solar panels, according to the California Public Utilities Commission. So they can store excess solar-generated energy and feed it back into the grid when it’s most required.

Due to the high upfront cost of installing a solar system, solar adopters have traditionally been wealthier consumers. This comprises the state’s utility firms, which have claimed since long that other customers unfairly subsidise solar customers’ grid costs. The regulatory authority stated in the 204-page study that current net-energy metering legislation “disproportionately disadvantages low-income consumers.”

In addition, the proposed amendments would establish a $600 million fund to assist low-income clients in obtaining distributed clean energy.

One of the state’s largest utility providers, Southern California Edison, called the planned decision a “significant step toward modernizing California’s rooftop solar program.”

How will the new policy affect?

Solar executives claim that the new proposal’s higher costs will considerably stifle growth. This is because the regulations will lengthen the payback period or the time it takes for a consumer to recoup their initial investment through decreased electric bills.

Solar systems have a wide range of payback periods, but according to research group E3, the current payback period is between four and five years. According to the CPUC, solar plus storage systems will have a 10-year payback period under the current proposal. The Solar Energy Industries Association said it is still working on its calculations to determine how long the new policy will pay for itself. The group also claimed that the measure would impose the “highest solar tariff in the country,” tarnishing the state’s clean energy legacy.

“The last thing we need is to regress on our climate goals,” SEIA President and CEO Abigail Ross Hopper said in a statement. “Today, the only winners are the utilities, who will increase their profits at the expense of their ratepayers,” she continued. “California has taken a bad turn.”

The CPUC’s president — one of the five commissioners — is slated to resign at the end of the year, further complicating matters.

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