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Federal subsidies have made the placement of solar panels on your roof more accessible in the past decade. But state rules are also important, and a possible change in California’s solar rules could hurt solar installers and developers who do business in the state.
Inventories for several of these installers fell on Tuesday amid concerns that a proposal at the Golden State could alienate some customers from solar power.
Sunrun
(ticker: RUN), the industry leader, fell 4.7%.
Sun power
(SPWR) and Sunnova (NOVA), two other installers, fell 5.7% and 3.7%, respectively. Solar cooled this year after a very hot 2020.
On Monday, three major California utilities proposed new charges and a reduction in a major benefit for solar customers.
PG&E
(PCG), Southern California Edison and San Diego Gas & Electric have asked the California Public Utilities Commission (CPUC) to allow them to charge customers with solar panels monthly fees: a flat fee and a “network access” fee per kilowatt. For the average 5-kilowatt system in a California home, the network access fee can rise to more than $ 50 a month, and fixed monthly fees range from $ 12.02 to $ 24.10, depending on of the concessionaire.
The network access fee alone could completely eliminate the cost benefit of solar energy, notes Stephen Byrd, an analyst at Morgan Stanley, after reviewing a Sunrun presentation that estimates the price for a customer in Southern California. While a traditional dealer’s bill would be $ 258 a month, Sunrun’s solar and battery storage system would cost the same customer $ 200, says the Sunrun presentation. About 40% of Sunrun’s customers are in California.
And that is not all. Utilities want to reduce fees for a system known as net metering, which pays solar energy users for the energy they send back to the grid during the day. A reduction in that rate would also hurt the economy of solar energy and make it more difficult to convince customers to switch from traditional utilities. The new rules of net metering would be imposed on new customers, not existing ones.
The solar industry and its supporters backed off, with the Save California Solar Coalition saying that if dealers “were successful, they would basically eliminate the market in California, just as they did in Nevada a few years ago.” In 2015, Nevada reduced payments for net metering, causing facilities to plummet. The state legislature restored payments in 2017.
The hard line adopted by utilities can foresee similar struggles of other utilities across the country, who want people with solar panels to pay more for basic network services. Concessionaires argued that it is complicated to integrate new forms of energy into the grid and that solar energy owners do not pay enough for infrastructure upgrades – forcing other utility customers to pay more.
So far, these are only proposals, and solar energy operators have also presented their own plans. As Byrd notes, “the previous efforts by California utilities to impose fees for access to the material network have been rejected by CPUC.”
The commission is due to decide later this year.
Write to Avi Salzman at [email protected]