Bay Area solar power owners could see more cuts to incentives
A controversial proposal is being floated in Sacramento that would, once again, change the rate that owners of rooftop solar are compensated for the excess energy they produce.
In October, Governor Gavin Newsom issued an order directing the state to figure out ways to lower people's electric bills. The Public Utilities Commission has come up with a list of suggestions and it has early adopters of solar power fighting mad.
In its response to the governor's order, the Public Utilities Commission identified owners of rooftop solar as one of the causes of higher energy bills for the average resident.
In its report it said, "While the vast majority of industrial, commercial, and residential customers do not have solar panels ... They will pay approximately $8.5 billion in 2024 for the 15% who do," the PUC said in a report.
Severin Borenstein, faculty director of the UC Berkeley Haas Energy Institute, explained why the cost shift is hurting low-income people the most.
"When people put in rooftop solar, it transfers costs onto people who don't have rooftop solar. And, by and large, the people who don't have rooftop solar are poorer than people who do have rooftop solar. So, as more and more people put in rooftop solar, it was transferring more costs onto other customers and driving up prices."
Solar owners were being credited the same rate that PG&E charges its customers. But about half that amount goes to pay for things like operating and maintaining the grid and protecting against wildfire — an expense solar owners don't have. So, in effect, all those costs are being passed onto non-solar customers, which the PUC says is adding 15.6% to the average residential customer's bill.
The state, and Borenstein, think it's time to stop being so generous to solar owners.
"Customers who put it in before 2020 or so have clearly already paid back their systems," he said. "So, I think that it's time to end this cost shift onto other customers, once you have paid back your system and maybe a bit more."
So, the PUC is proposing some changes. Anyone who had a solar system in April of 2023 was grandfathered into the more lucrative deal for a period of 20 years. The state is proposing that be knocked down to 10 years. But Bill Gurgol isn't having it.
"Ten years ago, I became my first customer," he said.
That's when Gurgol founded a solar company called Solar Bill Review and first installed the panels on the roof of his Dublin home. He and most of his customers are enjoying the higher payback rate of the system called "Net Energy Metering," or NEM, and it has a profound effect on the amount he pays PG&E each month.
"Now, $13," he said. "You can see we got a lot of panels too, you know?"
Gurgol and his fellow solar owners consider the state's new proposal to be a serious breach of contract.
"Everybody's asking when's the class-action lawsuit that we can all get in on," he said. "Because we have it in writing from PG&E, on a PG&E-logoed document, that says we're all grandfathered in for 20 years under net metering. So, this system here should have 10 more years."
Under the proposal, Gurgol's system would immediately convert to the lower paying system.
"If I was sending energy into the grid right now, instead of 45 cents, I'd be getting 5 cents per kilowatt hour," he said.
There are other proposals that rankle the solar owners as well, including a monthly fee on solar to pay for supporting the power grid, and a plan to limit the credit to the cost of energy at the time the system was created, which would eliminate the huge increase in price that has occurred over the last few years. But Gurgol said he bought solar when the state was encouraging people to do so, and he considers a deal to be a deal.
"You know, you shake somebody's hand, and you say we have an agreement, we're locked in," he said. "This is a signed contract and they're trying to take it away from people."
These are simply suggestions the PUC is offering, and no decisions have been made. But as the governor looks for ways to quell the anger over rising energy bills, solar owners may find themselves in the crosshairs.
