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Solar drops California fight to pick another with utilities

The battle between rooftop solar and utilities is moving into California’s statehouse.

While the two sides have aligned to support rooftop solar’s inclusion in a new state goal of getting half of its electricity from renewable sources by 2030, they’re now clashing over how much panel owners should be paid for power.

The feud has grown so contentious that small solar’s lobbyists have dropped their bid to be included in the state goal and are asking lawmakers in their biggest U.S. market to instead protect payments for panel owners.

The move marks a shift in focus for a fast-growing industry that has faced pushback from large-scale solar developers who’ve tried to exclude their small counterparts from California Gov. Jerry Brown’s clean energy goals.

The new lobbying effort underscores the growing importance of another battle with utilities over payments that also threaten to undermine their business model.

Utilities PG&E Corp., Edison International (NYSE: EIX) and Sempra Energy’s (NYSE: SRE) San Diego Gas & Electric have asked the California Public Utilities Commission to cut payments and boost charges to new residential solar customers.

They’ve said the rate structure known as net metering needs to change to ensure that solar panel owners are paying for their fair share of power grid maintenance.

Small solar’s lobbying efforts are in direct response to the utilities’ proposals, said Susan Glick, senior manager of public policy of installer Sunrun Inc. (Nasdaq: RUN).

“California’s investor-owned utilities have submitted extreme anti-solar proposals at the CPUC,” said Glick, speaking on behalf of the Alliance for Solar Choice, a solar rooftop advocacy group that includes Sunrun and SolarCity Corp. (NYSE: SCTY)

“The rooftop solar industry is asking for legislative action to restore market certainty and ensure the continuation of net metering.”

A group of venture capitalists sent a letter last week to Brown and state legislative leaders urging them to "restore policy certainty" for California’s rooftop solar industry.

“Investors have been committing capital to California’s rapidly growing rooftop solar industry with the expectation that the State’s solar-friendly policies will not be dramatically changed overnight," wrote the investors, led by Nancy Pfund, managing partner of DBL Investors and board member of SolarCity.

"That expectation is now being called into question by the utilities’ proposals."

The current system forces customers who don’t own solar to pay a disproportionate share of the costs, PG&E said. The company’s proposal will still allow for rooftop solar to grow and yield bill savings, the utility said.

Legislation passed two years ago requires the state utilities commission to develop new net-metering rules by the end of this year.

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