California regulators on Monday proposed requiring people with rooftop solar panels to pay more of the costs of operating the electric grid, a plan that some supporters of clean energy argued could greatly reduce the incentive for new residential installations.
The proposal from the California Public Utilities Commission would impose higher utility fees on people who install solar panels on their homes and, over time, homeowners who already had them. The impact could be significant because about 1.2 million California homes have solar panels, more than in any other state, and the state’s approach is often copied by regulators elsewhere.
Electric utilities and solar installers have long fought about how much money homeowners have to pay to connect to the grid and how much they can expect to earn as credits from the electricity that their rooftop panels produce and send to the grid. California and many other states typically allow those customers to earn credits equivalent to the retail electricity rates. These credits can lower utility bills, sometimes even to zero dollars.
Utilities like Pacific Gas & Electric, California’s largest, have argued that this credit system, known as net metering, is not fair to people without solar panels who are left to bear the cost of operating the grid. Solar installers argue that the system fairly compensates homeowners and encourages greater use of renewable energy.
In their new proposal, California’s utility regulators seemed to suggest that they agreed with the utility view and said that its current net-metering approach “negatively impacts nonparticipating customers; is not cost-effective; and disproportionately harms low-income ratepayers.”
The state’s utilities, which called for significant changes to the rooftop solar policies, welcomed the proposal. It will now be subject to public comments and a final vote by the utilities commission, expected on Jan. 27.
“Sensible reform is necessary to support customer equity and help continue California’s success toward a clean energy future,” PG&E said in a statement.
The proposal angered the solar industry, which said the higher fees proposed by the commission were excessive. The California Solar and Storage Association said the average home with solar panels would see its monthly energy costs jump by more than 50 percent under the commission’s plan.
The association said the average solar customer in the areas served by PG&E currently pays about $133 a month toward the cost of their system and for the energy they use from the grid. The proposed decision would increase that to roughly $215.
“This is a proposal to kill rooftop solar overnight,” said Bernadette Del Chiaro, executive director of the state solar association. “It’s a disaster.”
Sean Gallagher, vice president for state and regulatory affairs at the Solar Energy Industries Association, a national trade group, said his organization had proposed less drastic steps to balance any disparity that may exist between people with solar systems and those without. He said the proposed rates were so high that California would go from being a leading promoter of solar energy to charging people with panels more in fees than any other state.
“The rate is higher than anywhere else in the country,” Mr. Gallagher said. “It’s higher than Alabama, which previously had the highest installed capacity fee. This is very much what the utilities were looking for.”
