Residential solar customers would get lower credit for their excess electricity sent to the grid based on the value of the energy costs avoided by utilities, according to a proposed decision issued Monday by the California Public Utilities Commission. In addition, rooftop solar users would have to pay a new grid-connection fee that would average $40 a month.
Subsidies have been a key driver for the residential solar market, and reducing them may force some consumers to reevaluate whether installing panels would make economic sense.
This proposed decision — if final — “could wipe out a chunk of the segment of consumers that are buying solar primarily for savings,” Philip Shen, an analyst at Roth Capital Partners, wrote in a research note. It could also “meaningfully cut” installation volumes.
Sunrun and SunPower, both based in California, blasted the recommended changes, saying they would cost tens of thousands of jobs, undercut state climate goals and make the power grid less reliable.
The proposal “represents California politics at its worst and loses sight of what constituents want — innovation, control, and fast solutions — in favor of propping up failed and stodgy incumbents,” Sunrun’s co-Executive Chairman Edward Fenster said Tuesday in a statement.
Fenster said Sunrun believes the proposed grid-connection fees violate the 43-year-old Public Utility Regulatory Policies Act, a federal law designed to encourage renewable resources and promote competition for electric generation.
California’s proposal, which may change before it’s finalized, comes as high prices and supply-chain kinks already threaten the U.S. solar market. Total installations next year may fall 15% from 2021, according to a Tuesday report from the Solar Energy Industries Association and Wood Mackenzie Ltd.