California delays decision on rooftop solar policy reform

Feb 3 (Reuters) – California officials on Thursday said they needed more time to consider whether to adopt a controversial proposal that would reform the state’s key rooftop solar power incentive.

The move is at least a temporary win for solar installation companies like Sunrun Inc (RUN.O), Tesla Inc (TSLA.O) and SunPower Corp (SPWR.O) that warned of a sharp decline in installations which would harm California’s efforts to combat climate change if the revisions were implemented.

California is home to about 40% of the nation’s residential solar energy capacity.

A notice to parties involved in the rulemaking by the California Public Utilities Commission (CPUC) said the commissioner assigned to the proceeding “has requested additional time to analyze the record and consider revisions to the proposed decision based on party comments.”

The commissioner, CPUC President Alice Reynolds, joined the regulator late last year and did not participate in the lengthy process to consider changes to the policy, known as net metering, that has underpinned the dramatic growth of residential solar in California. One other member also joined the five-person board in recent weeks.

Reynolds intends to hold oral arguments that will be scheduled “at a later date,” the notice said.

Under the proposal, which was unveiled by the CPUC in December, homeowners would receive a lower rate for the power their rooftop panels send to the grid and pay a monthly charge of $8 per kilowatt to maintain electrical infrastructure.

The CPUC at the time said the changes were necessary to encourage adoption of battery storage technology so excess power can be held in reserve, and said the policy amounted to a multi-billion-dollar subsidy for wealthy homeowners at the expense of other utility ratepayers.

The proposal could have been voted on by the commission as early as last month. The solar industry in recent weeks mounted a lobbying blitz opposing the reforms.

“The proposed decision never made sense for a host of reasons,” Sean Gallagher, vice president of state and regulatory affairs at the Solar Energy Industries Association, a national solar trade group, said in a statement. “We look forward to continuing to work with the California Public Utilities Commission as it considers any changes to net metering.”

Kathy Fairbanks, a spokesperson for Affordable Clean Energy for All,a utility-backed group that has supported reforms like fees for solar owners, said it hoped the delay “means more is being done to address the unfair cost shift that is raising utility bills for non-solar customers.”