State legislators are considering enacting a bill that has the potential to slow the adoption of solar technology in California, members of the solar industry say.
Assembly Bill 560 (Skinner) places a cap on net-metering, the practice of allowing owners of solar panels to put excess power on the grid when the sun is at its peak and draw from the grid after the sun sets -- enabling a customer to receive a free utility bill.
AB 560 amends previously-set limits on the number of customers that may participate in net metering. Previous legislation limited participants in net metering to 2.5 percent of the utility’s energy demand –- a figure the state expects to reach within the year. Legislators have not yet reached an agreement as to the new limit. Proposed figures range between 10 percent and 3.5 percent -- a figure solar companies say is not high enough.
The matter is currently the subject of debate by the House Appropriations committee. Thus far, AB 560 has been amended from the original bill which places no cap on net metering, to a 10 percent cap. It was amended again to a 5 percent cap and yet again to the current figure of 3.5 percent.
“It’s silly that we keep on having to approve small increases in the first place,” said Aaron Hall, president of San Diego-based Borrego Solar.
If the legislature decides to approve the smaller increase, its likely the state’s solar market will be set back, Hall said. Net metering is currently a greater financial incentive for installing solar panels, than the state and federal tax credits combined -- which total 30 percent of the cost of a system, Hall said.
If the lower rate is approved, making new customer ineligible for net metering, the financial benefits of going solar will disappear.
“The incentives definitely are important but net metering is really taken for granted,” Hall said. “It’s basically the largest incentive there is.”
Projects currently planned in the state are expected to satisfy the 2.5 percent mark within the year, said Aaron Fowles, a spokesman for SANYO North America, which manufactures solar panels. Once the 2.5 percent figure is reached, no new projects will be eligible for net metering.
“Basically, it implies they don’t want to grow solar in the state,” Fowles said.
Northern California Utilities Pacific Gas & Electric and California Edison supported a previous version of the bill that increased the net metering cap to 5 percent, however San Diego Gas & Electric/Sempra Energy held out, said Liz Mooney, legislative director for Assemblymember Nancy Skinner (D-Berkeley).
SDG&E supports solar technology but does not support the 5 percent cap in the interest of ensuring equity among its rate-payers, said Sempra spokesperson Jennifer Ramp.
With net metering, homeowners with a solar panel system large enough to supply their own energy needs may receive a free utility bill each month. However because power cannot be stored, the customer uses infrastructure such as power lines and transformers owned by the utility to send the power onto the grid and draw from the utility during the evening hours.
SDG&E is also required to contribute to social responsibility programs which provide energy efficiency retrofits and utility bill assistance to low-income customers, Ramp said.
“We’re committed to increasing the use of solar in California,” Ramp said. “But we want to make sure there is equity in rates between all our customers.”
User Response
Chris Lussier8:59amSeptember 2, 2009
How does this bill affect time of use metering? Are the utilities also opposed to it? This may be part of their (the utility companies) overall plan to impose time of use metering on all their customers which has the potential to increase electric bills dramatically but also makes residential solar more feasible if they can sell the solar power they generate back to the utility at higher daytime rates.
Sam8:20amSeptember 2, 2009
The utilities can't make enough electricity at peak, and consistently cry to the consumer to conserve, yet don't want that same consumer to generate their own power, so they can suck them dry off peak. It's time the PUC acted on behalf of their namesake instead of their sugar daddy, and dictated that every watt of non-polluting sources of power be purchased by our "Public Utilities" at the same rates they charge everyone else.
Robert C. Leif, Ph.D.8:27pmSeptember 1, 2009
Placing a cap on net metering is totally against the interests of the citizens of California and the United States. I hope that any legislator who votes for this bill loses the next election. Why should we encourage the use of petroleum, which adds to global warming, the US negative balance of payments, and provides money to our enemies? Please publish the votes of each legislator on this bill.
Sam7:20pmSeptember 1, 2009
If we really wanted to promote solar, we would not limit energy production on a local or distributed scale AT ALL. Everyone should get paid for all the power they produce, they then all pay for use of the distribution system, and we rely less on oil and reduce pollution. So what does net zero, or a limit on it, say about what we really want?
Sam Iler7:16pmSeptember 1, 2009
How in the world can SDG&E (with a straight face) use the excuse that they want equity for their rate holders, when that's what the huge charge for distribution on our bills already does. The folks that self generate power are really only using the distribution system as they are already "net zero" on the actual electricity, what more do they want?
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Chris Lussier 8:59am September 2, 2009How does this bill affect time of use metering? Are the utilities also opposed to it? This may be part of their (the utility companies) overall plan to impose time of use metering on all their customers which has the potential to increase electric bills dramatically but also makes residential solar more feasible if they can sell the solar power they generate back to the utility at higher daytime rates.
Sam 8:20am September 2, 2009The utilities can't make enough electricity at peak, and consistently cry to the consumer to conserve, yet don't want that same consumer to generate their own power, so they can suck them dry off peak. It's time the PUC acted on behalf of their namesake instead of their sugar daddy, and dictated that every watt of non-polluting sources of power be purchased by our "Public Utilities" at the same rates they charge everyone else.
Robert C. Leif, Ph.D. 8:27pm September 1, 2009Placing a cap on net metering is totally against the interests of the citizens of California and the United States. I hope that any legislator who votes for this bill loses the next election. Why should we encourage the use of petroleum, which adds to global warming, the US negative balance of payments, and provides money to our enemies? Please publish the votes of each legislator on this bill.
Sam 7:20pm September 1, 2009If we really wanted to promote solar, we would not limit energy production on a local or distributed scale AT ALL. Everyone should get paid for all the power they produce, they then all pay for use of the distribution system, and we rely less on oil and reduce pollution. So what does net zero, or a limit on it, say about what we really want?
Sam Iler 7:16pm September 1, 2009How in the world can SDG&E (with a straight face) use the excuse that they want equity for their rate holders, when that's what the huge charge for distribution on our bills already does. The folks that self generate power are really only using the distribution system as they are already "net zero" on the actual electricity, what more do they want?