California pro-solar protestors march in defence of net metering and ITC

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Hundreds of pro-solar protestors and representatives from industry and advocacy groups marched on California’s state capital yesterday, intent on defending net metering policies and lobbying for extension of the investment tax credit (ITC).

California Solar Energy Industries Association (CALSEIA) and The Alliance for Solar Choice (TASC), a group formed by several big rooftop solar installers, organised yesterday’s event, which was attended by solar industry workers and their families in yellow t-shirts emblazoned with the slogans, “Solar created my job”, and, “Keep solar jobs going!”.

TASC claimed that over 200 people attended the event, arranged in response to plans put forward by California’s three investor-owned utilities for solar support programmes to replace existing net metering arrangements.

Due to falling costs and the relative success of support programmes in fostering large amounts of solar deployment, the state’s regulator, the California Public Utilities’ Commission (CPUC), requested the utilities to come up with their suggestions for successor tariffs to net metering, which exists in one form or another in 43 of the US states.

Two of the three, Southern California Edison (SCE) and Pacific Gas & Electric (PG&E), submitted their proposals around the beginning of August with the other, San Diego Gas & Electric (SDG&E), to follow. Presuming they are accepted, CPUC will then have to decide by the end of the year which tariffs will apply, although the changes will not actually be implemented until 2017, or when the three utilities reach a threshold of obtaining 5% of their electricity generation through net metered solar, whichever comes first.

In common with similar ongoing movements in other parts of the US, the plans submitted by SCE and PG&E call for monthly fees to be applied to the tariffs of future residential solar connections, ostensibly to pay for the use of the electrical grid. SCE pointed out that solar system owners will remain reliant on grid infrastructure for some of their electricity and claimed that some costs are being borne by non-solar utility customers. In a statement circulated to press to lay out its proposal, the utility also said it would not raise additional profit from the new plan.

“Customers who generate power remain connected to the power network and in fact it is the network that enables them to import and export power from their systems. This proposal does not increase the total amount of money or profits SCE receives from its customers,” the utility said.

In addition, residents who newly install solar would receive less for their net metered electricity than before under both utilities’ plans. TASC and CALSEIA claim that this, combined with the expected drop of the federal ITC at the end of 2017 from 30% to 10% mean that the solar industry in California faces “a major cliff within the next fifteen months” as the policy changes come into effect.

CALSEIA’s executive director, Bernadette Del Chiaro, said that yesterday’s event was about saving jobs in the state.

“This cliff we are speeding toward could unnecessarily cost the state tens of thousands of quality jobs, which is the opposite direction we should be headed,” Del Chiaro said.

In a statement, TASC said the CPUC was “under pressure” from the three utilities to “end net metering and thereby crush the rooftop solar industry”. The group lamented the fact this would mean limited choices for customers who wanted “cleaner, cheaper energy” and the lack of competition this could result in.

TASC could only give estimates of how many workers and companies would be affected, claiming that as many as 40% of California solar companies could lay off employees.

Buying out disruption

Another criticism that has been levelled at utilities from a number of sources, including analyst John Farrell of the Institute for Local Self-Reliance (ILSR), is that utilities in various parts of the US are attempting to co-opt or own rooftop solar programmes. In 'If you can’t beat ‘em, own ‘em – utilities muscle in to rooftop solar market', a piece published on 11 August on the ILSR blog, Farrell said that around the US, utilities are waking up to the disruption to their existing revenues posed by solar and “want a piece of the action”.

“In the past five years, rooftop solar has revealed the limitations of the archaic electric utility business model, as customers have found generating their own power more cost effective than taking 100% of their energy from the incumbent monopoly,” Farrell wrote.

“For years, utilities have fought back by trying to make competition less cost effective, at a substantial cost to their image (and ratepayer’s own money). Now they want a piece of the action.”

According to Farrell’s analysis of proposed programmes by two utilities in Arizona, the customer benefit of utility ownership would be dwarfed by the increase in financial benefit enjoyed by the utilities, Tucson Electric Power and Arizona Public Service.

Presumably a tone of conciliation will be sought eventually. TASC was founded by a number of rooftop solar companies, including SolarCity, the management of which has said, through statements and blogs by CTO Peter Rive and others, that it sees collaboration with utilities as natural and ultimately could be of benefit to all parties, especially as even newer technologies such as energy storage are introduced to networks.

A representative of another TASC member company, Sunrun, said that above all the industry craves certainty and said net metering is the only state-level support scheme proven to assist deployment.

“The rooftop solar industry needs long-term certainty. Net metering is the only proven state policy that puts solar into the hands of homeowners, renters, schools, churches, farmers and businesses”, Walker Wright, Sunrun’s director of public policy, said.

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