A battle is brewing in the California energy sector over what some deem a profit grab and existential threat to the growth of the solar industry and others defend as an overdue adjustment toward equity. One lawyer, who has been practicing in the solar industry for 15 years, told me it's the biggest fight she's ever seen.
Utility customers in California with rooftop solar systems enjoy comfortable incentives, which have stimulated the industry and helped make California the U.S. leader in solar production. Utilities are now aiming to decrease incentives and implement new solar fees, which they say will even out the financial burden taken on by non-solar and lower-income customers.
Central Coast Community Energy, or 3CE, the clean energy-focused alternative to Pacific Gas & Electric for California's central coast, is proposing a new $4.50 per month fee for rooftop solar customers and a 60% cut in how much it pays solar surplus customers. J.R. Killigrew, 3CE’s communications director, says the utility's current incentive structure subsidizes 60-70% of the cost to serve rooftop solar customers, a burden that is taken on by non-solar and lower-income customers. The proposed changes would balance those scales.
Killigrew says the timing of its reprioritization of solar is bad, as it is unfolding against the backdrop of a more consequential fight happening at the state level between investor-owned utilities such as PG&E and the solar industry. Utilities are proposing changes to the state’s solar incentives, among them: a dramatic decrease in the value of surplus energy produced by rooftop solar.
While the sun is shining, rooftop solar customers often generate surplus energy. For years, the credit they receive for sending energy back to the grid has been equal to the retail price of solar, which means the utility buys the electricity for as much it would charge its own customer. This retail rate can cost utilities more than three times the wholesale market rate. Now that solar has grown rapidly across the state, utilities want the cost of rooftop-generated solar to be closer to wholesale rates.
3CE’s proposed changes could earn final approval by its policy board of directors by June. PG&E’s changes will not be decided until year’s end, and the utility has guaranteed the current retail rate for at least 20 years. That lawyer I spoke with says this could mean a migration of customers away from the local community energy agency and back to PG&E.