By Alex K. Williams, founding partner, Solar Energy Partners
The installation of private solar power systems in homes across California has been a key driver in the state’s green power revolution. Twenty five years ago, roughly 10,000 houses and businesses had rooftop solar power systems installed. Since then, the number has reached upwards of 1.2 million with no end in sight. This boom in private solar power systems has not only had an impact on the amount of emissions released into the atmosphere, but on homeowners’ pockets too, with a potential twenty-year savings of more than $40,000 in the state of California for those who convert. These savings are made through not only a reduced reliance on outside power sources, but also through net metering, which is the sale of unused solar-generated power back to the grid.
This monetary aspect has caused some of the largest utility companies in the state to band together and push forward California Assembly Bill 1139 in an attempt to charge rooftop solar customers a monthly fee and alter net-metering credits. Although the solar industry-dubbed ‘utility profit grab bill’ failed, the California Public Utilities Commission is still considering adjustments to net metering in the next few months.
According to a range of industry leaders, these utility companies are still attempting to push through some of the same adjustments originally on bill 1139 via the CUPC. Among the changes proposed are requests for a solar-generated power credit value-reduction, so solar-generated energy costs the same as energy available on the open market, as well as the introduction of a monthly $90 flat fee for all solar customers.
Although it’s reasonable that these companies seek to reclaim some of the lost profits from the solar power boom, the effects of these adjustments will stretch further than just an increase in cash flow for the companies. In fact, if they are passed, negative impacts will ripple across all stakeholders in this newly emerged ecosystem, from the homeowners themselves and potential future customers, to the solar companies that serve them and maintain their systems.
The utility companies claim that these changes, particularly the $90 flat monthly fee, are designed to reduce the cost-burden on existing non-solar customers while also supporting the maintenance of the transmission system, funding wildfire-prevention initiatives and financing the shift toward renewable energy. The issue isn’t the proposed initiatives this money will go toward — which should already have been accounted for long ago by the utilities — but the deterrence these extra and unnecessary fees will give potential customers.
While some wealthier homeowners can shoulder the cost of a flat monthly fee and reduced income from net metering, it’s the next generation of solar power system buyers who will be most impacted by these changes. According to statistics from Berkeley Lab, the adoption of solar energy systems has trended toward lower-income households over recent years, mainly due to the long-term savings and increased accessibility as a result of federal and state programs. As it currently stands, a main value proposition for converting to home-based solar is the potential for long-term savings. If these changes are implemented, the monetary value of these savings will be reduced, which will ultimately deter new customers with less financial resources.
If new adoption is reduced, this will affect the industries that have emerged to serve these customers. In short, these changes not only deter new lower-income customers, but also limit the speed at which the solar industry can evolve, as well as the speed the state, and ultimately the country, can move away from non-renewable power sources. With events like the Gulf of Mexico fire becoming increasingly normalized, the focus should be on driving adoption of renewable-energy generation by any means necessary, instead of deterring or penalizing it with corporate-focused, profit-grabbing adjustments.
With all of this in mind, it’s clear that the changes requested by utility companies are a poorly veiled scheme to reduce the adoption of residential solar, while limiting the growth of a competing industry and harming residential customers. Due to the numerous financial and environmental benefits of converting to solar, the current state of the solar industry as well as regulations around metering and additional charges should be left untouched, if not improved to incentivize increased adoption. To ensure that this happens, and to protect the rights of solar customers from big utility companies, consider signing this petition by Save California Solar.
Alex K. Williams, founding partner of Solar Energy Partners, leads the solar industry with years of experience in entrepreneurial industries like security and the oil industry. Alex joined the solar industry to help grow sales teams across California. By 2021, Solar Energy Partners is growing its footprint and ownership team to include a range of western states.
