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Federal subsidies have made putting solar panels on the roof more affordable over the past decade. But state-by-state rules are also important, and a potential change to California’s solar regulations could hurt solar installers and developers doing business in the state.
The stocks of several of these installers fell on Tuesday amid concern that a proposal in Golden State could scare some solar customers away.
Sunrun
(ticker: RUN), an industry leader, fell 4.7%.
SunPower
(SPWR) and Sunnova (NOVA), two other installers, fell 5.7% and 3.7% respectively. The site has cooled this year after a very hot 2020.
On Monday, three major California utilities proposed new charges and a reduction in a key benefit for solar customers.
PG&E
(PCG), Southern California Edison and San Diego Gas & Electric asked the California Public Utilities Commission (CPUC) to allow them to charge customers who have solar panels monthly fees: both a flat rate and an “access” on the grid ”per kilowatt. For the average 5-kilowatt system in a California home, the cost of accessing the grid could increase to more than $ 50 a month and flat monthly fees would range from $ 12.02 to $ 24.10, according to utility.
The grid access rate alone could completely eliminate the benefits of solar power, notes Stephen Byrd, an analyst at Morgan Stanley, after reviewing a Sunrun presentation that calculates a customer’s prices in Southern California. . Although a bill from a traditional public company would cost $ 258 a month, Sunrun’s solar and battery storage system would cost the same customer $ 200, according to Sunrun’s presentation. About 40% of Sunrun’s customers are in California.
And that’s not all. Utility companies want to reduce the rates of a system known as a net meter that pays solar power users the shipping they return to the grid during the day. A reduction in this tariff would also harm the economy of solar energy and make it difficult to convince customers to switch to traditional public services. The new network measurement rules would be imposed on new customers, not existing ones.
The solar industry and its followers have backtracked, with the Save California Solar Coalition saying that if utilities “succeed, they would essentially eliminate the California market as they did in Nevada a few years ago.” In 2015, Nevada reduced payments for net metering, which led to a hasty drop in facilities. The state legislature reinstated payments in 2017.
The hard line taken by utilities may foreshadow similar struggles of other companies across the country who want people who own solar panels to pay them more money for basic network services. Utility companies have argued that it is difficult to integrate new forms of energy into the grid and that solar power owners do not pay enough for infrastructure upgrades, forcing other utility customers to pay more.
So far, these are just proposals and solar operators have also come up with their own plans. As Byrd points out, “previous efforts by California utilities to impose material network access charges have been rejected by the CPUC.”
The commission is expected to decide later this year.
Write to Notice Salzman to [email protected]