Rooftop solar customers can hold on to a popular tariff for 20 years as California reconfigures the payoff for utility customers who generate their own renewable energy, state utility regulators ruled Thursday.
Solar installers and finance companies expect a quick boost in business from the decision by the California Public Utilities Commission, as new customers rush to lock in the old credit system. Schools and water districts that installed solar sought a 30-year transition to a new tariff and fear they ultimately may lose money.
California’s “net metering” rules have fueled a boom in rooftop energy systems, but will be reconfigured by order of the governor and state legislature. Utilities including San Diego Gas Electric say solar customers have avoided their fair share of costs for maintaining the electrical grid.
The current rules allows rooftop solar customers who feed excess electricity into the grid to receive credits against consumption that substantially reduce bills. The new grandfathering clause would apply for 20 years starting with the grid plug-in date of individual rooftop solar arrays.
A coalition of public agencies including San Diego Unified School District said the decision could undermine public finances, ultimately hurting taxpayers. Many publicly financed solar projects have a long payback period because they did not incorporate key federal incentives, including a solar investment tax credit that reduces the cost of a solar energy system by 30 percent. Partnerships with the private-sector have improved access to those incentives.
Utilities commission President Michael Peevey acknowledged the coalition’s concerns but insisted on the advantages of a simplified 20-year provision that would apply to all solar customers.
Other pending regulatory decisions may substantially alter the economic payoff of rooftop solar, as California rewrites its electricity billing system for residential customers and considers a shift to time-of-use pricing. The utility industry and regulators are seeking to phase in those changes gradually over several years, starting this summer, to avoid a potential consumer backlash.
Adam Gerza, the director of government affairs for San Diego-based solar installer Sullivan Solar Power, said the 20 year transition provides a good measure of protection for existing rooftop solar customers and those who go solar soon. Public agencies, he said, can still design solar projects that save money on utility services.
“Solar continues to make sense, and it certainly is going to be a better option than staying (only) with the utility,” he said.
A new solar tariff — regulators have taken to calling it “net metering 2.0” — is scheduled to take effect on July 1, 2017, at the latest.
Room under the old tariff could run out sooner, however, if the generation of rooftop solar electricity surpasses 5 percent of peak demand on the local grid. The new ruling requires SDGE and other investor-owned utilities to report progress toward that cutoff each month, and post it clearly online.
Article source: http://www.utsandiego.com/news/2014/mar/28/solar-tariff-grandfathered/