A battle is brewing in the local and statewide energy sectors over what some deem a profit grab and existential threat to the growth of the solar industry and what others defend as an overdue adjustment toward equity.
“I’ve been an attorney exclusively for solar for the last 15 years, and this is definitely the biggest fight I’ve ever seen. That seems to be the general consensus,” says Angela Lipanovich, founder of the Bay Area firm Estriatus Law.
Utility customers in California with rooftop solar have long enjoyed cushy incentives. Those incentives stimulated the industry, making California the U.S. leader in solar production. Now, utilities are pushing for decreased incentives and 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, publicly-owned alternative to Pacific Gas & Electric for the Central Coast, is proposing a new $4.50/month fee for rooftop solar customers. It is also proposing a 60 percent cut to how much it pays customers who end the year having produced more electricity than they used. J.R. Killigrew, 3CE’s spokesperson, says the utility only collects 30-40 percent of what it costs to serve solar customers under current incentives; the remaining balance is borne by non-solar and lower-income customers. The changes would balance the scales, he says.
However, Killigrew admits 3CE’s timing is bad, as its proposal is set against the backdrop of a more consequential fight at the state level between investor-owned utilities and the solar industry. Utilities like PG&E want 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, solar customers often generate surplus energy, which is sent back to the grid. For their contribution, the customers receive a credit from the utility company. For years, that credit has been equal to the retail price of solar, which means the utility buys the electricity for as much as it charges customers. This retail rate can cost more than three times the wholesale market rate. Now that solar has grown rapidly across the state, utilities are proposing the California Public Utilities Commission lower the cost of surplus rooftop solar closer to wholesale rates.
Pete Scudder, owner of Marina-based Scudder Solar Energy Systems, says the changes proposed by 3CE and investor-owned utilities would disincentivize residential solar after years of propping it up. If solar customers receive less for their surplus energy, it will take them longer to pay off their investment, making rooftop solar less attractive. He criticizes 3CE for becoming a “mini PG&E.”
3CE’s proposed changes will go to its operations board on May 12, and could earn final approval by its policy board in 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. Lipanovich says this could mean a migration of customers away from 3CE and back to PG&E, to take advantage of the better rates.
Killigrew acknowledges the possibility of losing solely rate-focused solar customers, but hopes customers will see 3CE’s clean energy mission as a reason to stay.