California Cuts Rooftop Solar Credits for Apartments and Schools

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California regulators voted to cut incentives for schools, apartment buildings and farmers to install rooftop solar panels, delivering another blow to an industry reeling from a slowdown in sales.The California Public Utilities Commission agreed Thursday to cut payments to owners of non-residential buildings for energy produced from their solar panels. Apartment owners will also see their credits reduced for the solar used to power their common areas such as hallways and parking lots. Exceptions were made for some low-income housing. The changes apply only to new customers.

The decision is a setback for solar companies struggling with sagging sales as higher interest rates make consumers less willing to finance rooftop solar systems. In addition, California — the biggest solar market — slashed incentives for house installations in April to make sure the costs to run utility grids are shared fairly.

That move has proved devastating for the state’s rooftop solar industry, said Bernadette Del Chiaro, executive director of the California Solar & Storage Association. The trade group said its members reported an 80% drop in sales since the decision and anticipates a loss of about 20% of California’s solar jobs by early next year.

California regulators said that the new rates for commercial properties will improve price signals that will encourage customers to adopt battery storage and export solar in the evening hours when the grid is most stressed.

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Some of the biggest solar companies in California include Sunrun Inc., SunPower Corp., Sunnova Energy International Inc., Enphase Energy Inc. and SolarEdge Technologies Inc.

Sunrun, the biggest US rooftop solar company, fell as much as 1.6% in after-market trading before recovering.

They, along with environmental justice advocates, farmer groups and local housing associations, had voiced opposition to the proposed reductions. Investor owned-utilities largely supported them.