California’s Rooftop Solar Dreams Are Dimming From Rising Bills

The state again looks to cut incentives for home users in a push to curb soaring electricity rates.

By Mark Chediak

A solar system atop a San Francisco housing development. Panel buyers would lose some incentives under a new proposal. Photographer: David Paul Morris/Bloomberg

California prides itself as a champion of solar power.

It helped bring the clean technology into the mainstream by paying residents for the excess power generated by their rooftop panels. With more than 2 million homeowners signed up, the Golden State is far and away the US leader.

But now, a bill passed by one chamber of the state legislature would reduce those payments if a home is sold, adding another potential blow after incentives were slashed two years ago.

The proposal has some questioning why the state is looking to further erode its program just as Republicans in the US House of Representatives advance a bill ending tax credits for residential solar.

That federal move, solar-company executives and analysts say, would devastate the industry. Firms already struggle with high interest rates that make it more expensive for customers to finance panel purchases.

Source: California Public Utilities Commission
Note: Capacity measured in megawatts (MW)

SunPower Corp., one of the most prominent names in rooftop systems, filed for bankruptcy last year, and one of the largest home solar financiers, Sunnova Energy International Inc., teeters on insolvency.

The answer has to do with California’s rapidly rising electricity rates, which Governor Gavin Newsom asked lawmakers to address. Multiple increases have pushed the average price of power to near the highest nationwide.

Utility spending represents the bulk of those hikes. Wildfire prevention is expensive, and operators are moving to improve the grid’s reliability.

But California regulators, utilities, labor unions and others also blame the rooftop-solar incentives. They say those who can’t afford panels are paying higher bills to subsidize payments to those who can.

Those shifted costs were estimated to be about $8.5 billion last year, according to the state’s consumer advocate. That’s disputed by the solar industry, which points to research showing rooftop-panel users save other ratepayers $1.5 billion annually.

This much is clear: Soaring energy bills threaten California’s ambition to clean its grid. That risk isn’t exclusive to the Golden State.

–Mark Chediak, Bloomberg News

Share This:

---

More News Articles