Here’s a simple guideline for the California Public Utilities Commission when it votes next week on a new rate scheme for rooftop solar users who also connect to the electric grid: Don’t be like Nevada.
Last month, public utility commissioners in that super-sunny state put the chill on the burgeoning rooftop solar market by imposing steep monthly fees on solar customers while slashing the compensation they are paid for the excess power they return to the grid. In so doing, Nevada made it virtually unaffordable for the typical homeowner to install solar panels. Good going, guys.
These customers can afford it, the utilities argue, now that a key federal tax credit for solar power has been renewed. Congress surprised the solar industry in December by extending a 30% credit for the installation of solar-power equipment that was set to expire this year. Besides, the utilities claim, the current proposal is not fair because it would make all ratepayers subsidize the rich people who can afford to go solar. This argument might have seemed reasonable in, say, 1995, when solar panels really were out of most people’s reach. Not so today, when the tax credit and new business models are making solar setups affordable to homeowners of all income levels. As the market grows, it should become even more affordable.
Transitioning to renewable energy requires regulators to strike a delicate balance, providing incentives that drive investment without placing undue burden on everyone else. Nevada didn’t find the right balance. In its current proposal, the CPUC did.