California rooftop solar subsidy will cost $8.5 billion per year, according to a ratepayer's advocate

The California Residential Solar Subsidy will cost California ratepayers without rooftop panels $8.5 billion per year by the end this year. This will contribute to higher electricity prices for consumers.

Why it Matters

In 2022, the California Public Utilities Commission reformed its residential solar policy called net energy metering. This allowed customers who had rooftop panels to receive credit for any excess electricity generated by their systems at or close to retail electricity rates.

The new policy reduced the rate. This made going solar less appealing and angered environmental groups. Also, the solar industry has reported that it lost over 17,000 jobs due to the change.

Customers who signed up for the program before the change will still receive the old incentives. According to the CPUC Public Advocates Office, customers who don't have solar panels are responsible for paying those subsidies because they pay fixed costs such as grid maintenance. Solar owners, however, enjoy lower bills.

By the Numbers

The analysis shows that ratepayers without solar will be forced to pay $8.5 billion in the year 2024. This is up from $3.4 million a year by 2021.

Net metering will benefit customers for up to twenty years.

What's Next?

The Public Advocates Office has proposed several changes to net metering to reduce the so-called cost shift that is shifted to customers without solar.

It is recommended that net metering clients be converted to the new program 10 years after joining the program or when they sell their home. They should also receive compensation based on the electric rates in place at the time of the original program, rather than the current higher rates. Reporting by Nichola Broom, Editing by Deepa Babington

(source: Reuters)