Solar panels in Temecula, Calif., on Nov. 24, 2021. (John Fredricks/The Epoch Times)
State regulators recently approved a rate plan requested by utility companies that critics say will negatively impact some solar customers and the industry.
The change will cause homeowners that installed solar systems with batteries to receive less compensation back from utility companies than they were expecting, according to experts such as the California Solar and Storage Association, a group of companies representing the industry.
At issue are credits provided to solar customers for extra energy they produced and distributed back to the grid. Because of discrepancies in how those credits are reimbursed and how users are billed, many homes with solar systems that installed batteries could be forced to pay for delivery costs and may not be able to use all of their accumulated credits.
“So, the net effect is solar is more expensive,” Bernadette Del Chiaro, executive director of the California Solar and Storage Association, told The Epoch Times via email.
The Nov. 30 decision
by the California Public Utilities Commission follows other controversial moves including the approval of cutting reimbursement rates by up to 75 percent for some solar customers, which critics have said will slow the switch to solar for California homes, since many customers choose to install solar panels to save money.
This year, solar companies in California saw an 80 percent drop in business year over year, and 20 percent of the industry’s workforce was laid off—totaling approximately 17,000 jobs, said Ms. Del Chiaro.
“The industry is in a state of crisis,” she said. “Dozens of companies are going bankrupt or leaving the market.”
While the Golden State has long been a proponent of solar technology—and Californians have the most panels of any state in the nation—critics suggest recent decisions are hurting its energy objectives.
“California has quickly become one of the worst states in the country to be in the solar business,” Ms. Del Chiaro said. “We are likely to see this bad news continue to unfold.”
Also contributing to the dilemma, according to experts, is a vote earlier this year to approve changes to the rate structure for commercial solar installations. Such includes schools, farms, apartment buildings, and other properties operating with more than one utility meter.
Taken together, those using solar say the time it takes to recoup investment for setting up their system has changed significantly over the last few years.
What could be recouped in four years on prior rate plans now takes between seven and nine, depending on system size, and will be even longer when the new plans take effect in 2024, according to industry experts.
“While the solar and storage industry adapts to an abrupt shift ... the California Public Utilities Commission has added insult to injury with a series of damaging decisions that completely change the environment for rooftop solar in California,” Abigail Ross Hopper, Solar Energy Industries Association president and CEO, said in a Dec. 1 press release.
Such moves are disincentivizing purchases and will be detrimental to the solar industry and its workforce, she said.
Some are expecting the residential market to decline by 40 percent next year and the commercial sector to drop by 25 percent between 2024 and 2025 after the new regulations take effect.
“In human terms, this drop off means thousands of jobs will be lost,” Ms. Hopper said.
Many solar companies are small businesses in communities across California, and some say the impact will be wide-ranging.
One business owner said he laid off half his employees after new rules took effect in April—blaming the commission’s decisions for creating the hardship.
“There is no way to launch an industry forward by making its products more expensive for consumers. The overwhelming reason customers go solar is to save money,” Carlos Beccar of Energy Concepts, a Fresno-based solar company, said in a Nov. 30 press release. “When you take away the ability for consumers to save money it puts a brick wall in front of our whole industry.”
The California Public Utilities Commission did not return a request for comment by press time.