The California Public Utilities Commission (CPUC) released a proposed decision that has solar advocates up in arms. The proposal would change the way solar customers are compensated for their excess energy generation, which could significantly alter how much you are paid when you send power back to the grid. Not only that, but this proposed tariff could have a devastating impact on the state’s rooftop solar industry and the state’s booming solar energy economy. Because of these potentially catastrophic impacts, the commission has decided to delay the proposal. That being said, the future is uncertain, which has sparked urgency to make the switch to solar energy now to reap the many benefits it has to offer.
In this blog post, we will explore everything you need to know about the CPUC’s controversial proposal and what it could mean for solar panels in California. Keep reading to learn more, and connect with your friends at West Coast Solar to make the switch to solar today.
Alterations to Compensation
Solar customers are currently compensated for their excess energy generation at the full retail rate. The CPUC's proposal would change that, meaning solar customers would instead be compensated at the lower "avoided cost" rate. This means that solar customers would be paid less for the excess energy they generate, which could make rooftop solar panels less financially viable for many Californians.
Creates a “Grid Participation” Charge
To encourage the use of solar energy, San Diego Gas & Electric is proposing a new "grid participation charge" that would cost residential customers $8 per kilowatt on their electricity bills. This equals about $40-48 a month for someone with an average 5 to 6kW system size; it won't apply however if you're in commercial space!
Formation of an Equity Fund
In an effort to support clean energy and storage programs for low-income Californians, the state of California proposed to create a $600 million equity fund. Disadvantaged households would be exempt from paying grid participation charge (which can amount up to around 10% off electricity bills).
10-Year Payback Period
Another change they are proposing has to do with energy storage. In an effort to reduce strain on the grid during low production hours between 6pm to 9pm when the sun isn’t shining, the commission proposed to offer a 10-year payback period for customers who add solar storage to their systems.
It’s important to reiterate that the proposal is currently paused, however, we wanted to educate you on what this could mean if this passes to help you make an informed decision about installing solar on your home if you’re still on the fence. What’s more, we want everyone who currently has solar installed to know how things could change for them should this tariff pass. If you have any questions, or would like to explore your solar options, connect with West Coast Solar to schedule a free estimate.