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Solar customers and businesses that install solar worried earlier this year that three looming policy changes would make going solar less attractive. They've been pleasantly surprised at how things are playing out.
The future’s looking mostly sunny for San Diego’s current and future rooftop solar customers despite earlier fears a trio of policy overhauls could lessen the incentive to go solar.
Many consumers who go solar do it with two goals in mind: helping the environment and saving cash. Earlier this year, local solar industry leaders worried impending changes could lessen the financial win associated with solar investments.
Now solar industry leaders are feeling upbeat after a wave of good news.
Here’s a status update on three big solar deal-sweeteners:
What it is: A state-mandated agreement known as net energy metering allows solar customers to reduce or eliminate their bills by requiring utilities like San Diego Gas & Electric to buy power at retail rates from rooftop solar converts.
Solar advocates’ fears: A 2013 law required state regulators to set new rules for future solar customers. Solar advocates feared the new deal wouldn’t be as generous to solar customers as the current one. They argued any deal that made it harder for solar customers to recoup their investment would dissuade people from going solar.
SDG&E had pushed two new billing options that included a $280 connection fee for new solar customers. One would’ve had customers be credited at a wholesale rate, which is significantly less than the current retail rate. The other added grid and demand charges that would’ve lessened the payoff in going solar.
The latest: The Public Utilities Commission released a proposed decision on Tuesday that largely favors the solar industry.
The proposal says solar customers should continue getting retail credit for the power their panels produce. It does suggest that solar converts pay a one-time fee – expected to be $75 to $150 – to tie into the grid, and that customers be forced to help foot the bill for utility programs that assist with energy-efficiency upgrades and low-income users. Energy industry publication Greentech Media reported the latter charge would likely amount to 2 to 3 cents per kilowatt hour.
SDG&E argues this proposal amounts to a subsidy for solar customers and plans to oppose it.
The solar industry, meanwhile, is relieved – for now.
The current proposal won’t substantially slow the solar movement, said Brad Heavner, policy director for the California Solar Energy Industries Association. “Although we don’t like everything in the proposed decision, it is a fair compromise that will maintain the opportunity for customers to go solar.”
What it is: The federal Solar Investment Tax Credit allows solar converts who buy their solar panels to claim 30 percent of their system and installation costs within a year. The credit is a key sales pitch for companies selling panels and those providing financing for them. The tax credit is often baked into those arrangements.
Solar advocates’ fears: That tax credit is set to expire at the end of 2016 and solar advocates say losing it would instantly up the cost of going solar by 30 percent.
The latest: Late Tuesday, House Speaker Paul Ryan debuted an omnibus measure that extends the 30 percent credit through 2019 and then gradually reduces it to 22 percent by 2022. Ryan is planning votes this week.
But the solar lobby wasn’t hiding its excitement Wednesday.
“We commend members of Congress in both parties for taking this bold step and we look forward to delivering on the promise that this policy now offers all Americans for clean, affordable and reliable energy,” Solar Energy Industries Association CEO Rhone Resch said in a statement.
What it is: High-energy users have long seen the biggest financial advantage to going solar because SDG&E charges based on how much energy customers use. The gulf between charges for low-energy users and energy hogs grew even larger because the state put a cap on rates for those who use the least energy and increased the number of energy-rate tiers.
State legislation opened the door to change two years ago and earlier this year, SDG&E proposed just two tiers with a much smaller gap between them and a fixed charge for use of the energy grid to make up for the charges it says many solar customers bypass.
Solar advocates’ fears: Solar advocates argued SDG&E’s proposal wouldn’t encourage conservation or solar installations.
The latest: SDG&E got the go-ahead from the Public Utilities Commission to require most customers to pay at least $10 a month and reduce the number of energy-rate tiers over the next several months. They’ll also add a super use charge for energy hogs in 2017 and begin charging customers based on the time of their usage in 2019.
Heavner and Michael Powers, co-founder of Stellar Solar, said the shifts in rates haven’t made a significant dent yet.
Powers isn’t sure they ever will. He said the addition of the super use fee in the rate structure and the expected lack of wholesale change to net energy metering or the tax credit seem likely mean their solar customers will only see a minimal impact in the time it takes to get a return on their solar investment.
“It ended up almost being a wash,” Powers said.