California's solar energy industry yesterday welcomed the passage of legislation that will radically overhaul rate design.

AB327 has been amended heavily since it was introduced by Assemblymember Henry Perea and has managed to satisfy both investor owned utilities and the solar industry in the state, even though it could usher in the introduction of a controversial monthly fixed fee. The bill now awaits the approval of Governor Jerry Brown.

Rhone Resch, the president and chief executive of the Solar Energy Industries Association, said: “This is a banner day in California. Once again, state lawmakers have set the bar high when it comes to the adoption of renewable energy. AB 327 provides a clear pathway for the continued growth of solar generation in California.

“Moving forward, we plan to work closely with the California Public Utilities Commission (CPUC) to ensure that future rules preserve consumer choice, ensuring that California homeowners, businesses and schools will continue to benefit from clean, reliable solar energy. SEIA applauds California legislators for ‘leading by example’ and for their strong, ongoing commitment to solar energy."

Solar advocates had protested over key provisions, which were included in the bill such as ensuring that California's net metering programme will stay in place until the 5% cap of NEM (5200MW) has been installed, rather than a possible suspension by the California Public Utilities Commission next year. The bill also introduces the prospect of lifting the 5% cap entirely and allows California's Investor-Owned Utilities (IOU), to procure more than the 33% clean energy required by the Renewable Portfolio Standard.

CPUC will have to decide by March next year how existing NEM customers will be "grandfathered" into the new programme.

The Alliance for Solar Choice (TASC) said it was a rare example of California’s IOU, the solar industry, and ratepayer advocates all supporting the same bill. TASC, Vote Solar and the Solar Energy Industries Association (SEIA) all filed letters of support. 

“AB 327 recognises that net metering is smart policy and should continue in California without restrictions,” said Randy Bishop, a TASC member and CEO and co-Founder of Verengo.

Shayle Kann, vice president at GTM Research, said: "AB327 hasn't answered the basic questions of what is the value of solar and what should NEM look like ultimately but it sets a formal transparent process through which the CPUC will determine a successor programme to the NEM.

"It authorises the CPUC to allow utilities a $10 fixed charge – that is something the solar industry hadn't been willing to entertain before. It's a big deal that solar advocates support a bill that continues that. The bill leaves a lot in the hands of the CPUC and now there's a venue to continue the case that those fixed charges are not fair."