California Expands Net Metering Program for Solar-Power Sales

California regulators expanded a program that forces utilities to buy solar electricity generated by homeowners and businesses.

The practice, known as net metering, formerly was subject to a cap equivalent to 5 percent of utilities’ “aggregate customer peak demand,” according to a statement from the California Public Utilities Commission.

Today’s ruling by the commission, reached in a 5-0 vote, changes the way the cap is calculated and as a result doubles the amount of eligible solar power, the commission said.

The prior net metering cap in California would have been met after about 2.4 gigawatts of installations, and today’s decision raises it to about 5 gigawatts, Ben Higgins, legislative director at REC Solar Inc., said today by telephone.

PG&E Corp. (PCG)’s Pacific Gas & Electric Co. estimated that, under the prior rule, the cap would have gone into effect in its service territory as soon as 2013, according to the statement.

PG&E and California utilities owned by Edison International (EIX) and Sempra Energy (SRE) were critical of the proposal. The utilities are concerned about cost shifting that may occur if customers who don’t use net metering absorb more grid maintenance costs, Lynsey Paulo, a PG&E spokeswoman, said.

“We are interested in these impacts on non-solar customers,” Paulo said today by telephone. The rule “could be” challenged in court by utilities or other organizations, she said.

The Utility Reform Network, a consumer advocacy group, said prior to today’s vote that the new rule would be “legally deficient,” according to comments filed May 6.

Solar panel prices have fallen 53 percent since the end of 2010, and companies such as SolarCity Corp. and Sunrun Inc. allow customers to install panels without any upfront cost.

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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