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Federal subsidies have made it more affordable over the past decade to install solar panels on your roof. But state-by-state rules are also important, and a possible change in California’s solar rules could hurt solar installers and developers doing business in the state.
The stock of several of the installers fell on Tuesday due to concerns that a proposal in the Golden State could deter some customers from solar power.
Sunrun
(ticker: RUN), the leader in the industry, fell by 4.7%.
SunPower
(SPWR) and Sunnova (NOVA), two other installers, decreased by 5.7% and 3.7% respectively. Solar has cooled down this year after a very hot 2020.
On Monday, three major utilities in California proposed new levies and a reduction in the key benefit for solar customers.
PG&E
(PCG), Edison and Southern California and San Diego Gas & Electric have asked the California Public Utilities Commission (CPUC) to allow them to charge customers who have solar panels monthly fees: both a fixed fee and a ‘grid’ access’ per kilowatt. For the average 5 kilowatt system in a home in California, the access allowance can increase to more than $ 50 per month, and the fixed monthly fees will range from $ 12.02 to $ 24.10, depending on the utility.
Stephen Byrd, an analyst at Morgan Stanley, can only completely eliminate the cost of accessing the network, after reviewing a Sunrun submission that estimates the price of a customer in Southern California. While a bill of a traditional utility would cost $ 258 a month, Sunrun’s solar and battery storage system would cost the same customer $ 200, according to the Sunrun offer. About 40% of Sunrun’s customers are in California.
And that is not all. The utilities want to reduce the fees of a system known as grid metering, which pays solar power users for power they return to the grid during the day. A reduction in the fee will also hurt the economy of solar power, and it will make it harder to persuade customers to switch from traditional utilities. The new net measurement rules are imposed on new customers, not existing ones.
The solar industry and supporters pushed back, with the Save California Solar Coalition saying that if the electricity services are “successful, they will effectively eliminate the market in California, just like in a few years ago in Nevada.” In 2015, Nevada reduced net metering payments, dropping installations sharply. The state legislature restored the payments in 2017.
The difficult streak used by the utilities could predict similar battles from other electricity services across the country that want people who own solar panels to pay more money for basic network services. Utilities have argued that it is complicated to integrate new forms of energy into the grid, and that solar power owners are not paying enough to upgrade infrastructure, forcing other utility customers to pay more.
So far, these are just proposals, and solar companies have also submitted their own plans. As Byrd notes, “the CPUC has been denied that an attempt by California utilities to impose material access fees has been rejected.”
The commission is expected to decide later this year.
Write to Avi Salzman by [email protected]