California pushes a new plan to cut rooftop solar incentives on homes
When California voters were asked in March to approve a ballot initiative that would reduce the impact of the state’s incentives on rooftop solar installations, they overwhelmingly supported it.
In April, California’s Public Utilities Commission approved a long-term plan to reduce incentives for rooftop solar systems from 60 percent to 5 percent over a 10-year period, and then to phase them out completely after five years.
The plan, which officials say will save consumers as much as $400 million a year, is aimed at encouraging the state’s 7.2 million residential solar customers to install more solar.
But it’s no picnic for rooftop solar providers like SolarCity, Sungevity, Sunrun and Vivint. The new rules are designed largely to take away the biggest incentive they now receive: rebates on the capital cost of solar panels and systems.
That would effectively prevent customers from installing solar, a move that would cost them tens of millions of dollars in future incentives.
“A lot of customers said they’re going to start off with solar, then decide to not go solar,” said Amy B. Adams, who’s leading the state’s solar procurement program. But she said that doesn’t go far enough.
“We’re losing about $30 million a year in rebates,” she said.
The incentives were originally approved by state lawmakers and signed into law in 2011. But they were designed only for a short time period, for two years, giving utilities a relatively easy time to phase them out.
“The market did not think the incentive was going to last as long as it did,” Adams said.
The plan aims to have the incentives phase out at the end of 2020, a decision that’s also likely to force down the price of solar, which soared to record levels shortly after the law was passed.
The plan also aims to ensure that the benefits are even spread out more efficiently over time.
“This new plan is not a giveaway,” Adams said. “It is a better plan, and we’re going to go ahead and do what’s in the best interest of our customers.”
California is the eighth state to adopt its own plan to phase out its solar incentives for residential customers. Others include New York, Hawaii, Maine, New Jersey and Maine, all of which have approved their own solar
