Rooftop Solar Scores Win in the One Place It Matters Most

  • California continues full payment for excess solar power
  • State is largest market for installers including SolarCity

California just delivered U.S. rooftop solar installers their first good news in weeks.

While Nevada and Hawaii are scaling back benefits to panel owners, the Golden State decided on Thursday to uphold the full retail-price payments that solar customers get for selling power back to the state’s grid. Solar companies including Sunrun Inc., which surged 21 percent on the news, lauded the decision while the state’s investor-owned utilities panned it. California makes up about half of the nation’s residential solar market.

The California case had been closely watched as governments decide how to spur renewable energy development while also ensuring power-line owners collect enough revenue for maintenance and upgrades. In Nevada, regulators last month decided to raise fees for solar-panel owners and cut their payments, prompting both SolarCity Corp. and Sunrun to fire workers and shut operations there.

California’s decision “was the result of a thorough commission-led stakeholder process from the state that knows solar best, our nation’s largest rooftop solar market by a long shot, and we hope other states will take note,” said Susannah Churchill, West Coast regional director for the Oakland, California-based advocacy group Vote Solar.

Shares Surge

SolarCity, the largest U.S. installer with the biggest share of California’s market, rose 8.5 percent to close at $35.62 in New York. Sunrun jumped $1.71 to $10.05, the biggest increase in more than a month.

CreditSuisse analyst Patrick Jobin said in a research note to investors that Thursday’s decision “paves the way for continued, profitable growth for residential solar developers in the state of California.”

In October, Hawaii ended its net-metering policy for new customers and replaced it with rules that compensate solar users less for power they sell. Nearly half the states out of the more than 40 that offer net metering have changed their programs or are considering doing so, according to the N.C. Clean Energy Technology Center, which tracks the policy.

The California Public Utilities Commission voted 3-2 to keep its net-metering system largely intact. Commission President Michael Picker described the decision on Thursday as “a big step forward to giving California consumers more choice, more control and more responsibility over their energy choices.”

Commissioners Opposed

The two commissioners who opposed the measure, Mike Florio and Catherine Sandoval, said they did so because of a last-minute change that eliminated transmission charges to be paid by solar users. Florio said the move would raise costs for non-solar customers.

PG&E Corp., which has more rooftop solar customers than any other U.S. utility, said by e-mail that it was "disappointed.” Sempra Energy’s San Diego Gas & Electric said regulators “ignored state law and the clear direction of the state legislature, which called for them to reform net energy metering to ensure that benefits are balanced with the costs of the program.”

Connection Fee

Under previously approved rules, California utilities were to accept net-metering customers until rooftop solar capacity on the system reached a certain threshold. Under the program approved Thursday, they may accept people beyond that limit and impose a one-time connection fee.

Solar customers will also pay a charge of about 2 cents a kilowatt-hour for all electricity consumed. Under the existing policy, customers pay this charge only on the difference between what they use and the power their systems generate.

"We all know that California is a world leader when it comes to being ‘green,’” said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association. “Today’s vote is more than that. It is about California continuing to champion innovation and a different way of doing things.”

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