(Bloomberg) — The subsidy that helped make residential solar affordable and mainstream in sun-kissed California may have reached its limit
The state’s biggest utilities are calling on California regulators to reduce the credit customers get for excess electricity they transmit to the grid from their rooftop panels. The utilities, along with consumer advocates and even some environmentalists, contend the incentive makes solar cheaper for those who can already afford the systems but drives up power bills for those who can’t.
Solar companies are pushing back, saying slashing the incentive too much and too quickly will decimate the market for rooftop solar and hobble the state’s efforts to fight climate change. The industry supports a gradual reduction of payments for many, and balks at being characterized as an accessory for the rich. The debate will test California’s commitment to a policy that’s done wonders for the state’s transition to clean energy.
By most accounts, the state’s rooftop solar-incentive program has been wildly successful since its inception in the mid-1990s. California—easily America’s biggest solar state—now has more than 1 million panel-topped rooftops, achieving a goal set by former Republican Governor Arnold Schwarzenegger. The incentive, called “net metering,” pays solar-clad homes the full retail price of electricity for any excess power they export to the grid.
“Low-income customers and renters are forced to subsidize solar adoption by higher-income customers and homeowners,” said Matthew Freedman, an attorney with The Utility Reform Network, a consumer advocacy group. “The result is a reverse Robinhood effect that is profoundly unfair and economically regressive.”