California is set to cancel its years-long net metering policy, which allows photovoltaic panel owners to sell their excess electricity to the electrical grid in order to shave off a few dollars from their electrical bills. Although said policy is responsible for the surge in renewable energy installation in California, some controversies regarding the policy’s supposed “the rich get richer, vice versa” nature have popped up.
This is primarily because only the wealthy have additional funds to install photovoltaic systems at home. According to CPUC investigators, the aforementioned policy is both cost-ineffective and harmful to homeowners without photovoltaic panels as these poor souls must now shoulder the financial burden of electrical grid upkeep. Incidentally, these people tend to be poor. CPUC indicates that taxpayers in California spend about US$3 billion per year thanks to the net metering policy.
California provides 40% of the US’ total rooftop mounted photovoltaic installations. Hence, CPUC’s announcement naturally drew the ire of the photovoltaic installation industry, which believes that the CPUC’s actions will negatively impact the installation capacity of photovoltaics and obliterate California’s years-long efforts at energy transition.
CPUC encourages the photovoltaic industry to accelerate the installation of BESS and store excess electricity as opposed to selling said electricity to electrical grids. CPUC has also brought up a new reform that entails the installation of new photovoltaic systems in California. As part of the reform, not only will there be a significant price drop in electric bills, but a US$8/kW monthly maintenance fee for electrical grids will also emerge. CPUC indicates that households with in-house photovoltaic systems that have been in place for 15 years or longer will be transitioned to the new solution.
CPUC has also consulted various electricity suppliers, PV industry representatives, and consumer rights groups for their opinions. At the earliest, CPUC will vote to ratify the policy, which will take effect four months after ratification and become the most significant reform in the post-1990 electrical metering reform era.
“Those funds would be better directed elsewhere,” said CPUC Commissioner Martha Guzman Aceves. “If you use that money to purchase the large-scale clean energy projects, [California] would be able to meet [its] 2045 goals of producing all the state’s electricity from clean sources.” The SEIA, conversely, believes that California will end up with the highest solar tax in the US, in turn marking a mistake in the legend of the state’s clean energy pursuits.
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