CPUC Finalizes New Rooftop Solar Panel Rates

On January 28, the California Public Utilities Commission (CPUC) voted on and passed new rules for electricity charges that will come into play for by customers who have solar panels installed in the near future.  Elements of the new decision that are likely to be important to Voter readers include: reimbursement for electricity generated; time-of-use(TOU) rates; and a set of “public use” charges applied to net consumption.

This decision was taken on a proposal from the CPUC that was made public on Dec. 15 and described in a column in the Jan-Feb Voter.  That proposal had met with approval from most current customers and the renewable energy industry, but was resisted by the utilities, including PG&E, who sought to pay wholesale rather than retail rates for excess electricity sent to the grid by customers who generated more than their own need.. The state regulators rejected the utilities’ arguments, in part because of legislation (AB 327) requiring new rate schedules to continue to support sustainability of household solar generation.

TOU rates, currently optional for solar customers, are required in the new program.  TOU rates assign higher costs to high demand times, the consequence of which is to  increase conservation by encouraging customers to shift electricity use to low-demand times.

The public use charge (about 2¢ per kWh) is already being paid by by non-solar customers.  It covers low income bill assistance, efficiency measures, research, etc. and is widely judged to be reasonable and appropriate, although it may increase the bill for solar customers.

Those considering installing solar panels should consider that the new rates will go into effect when solar reaches 5% of PG&E’s total electricity use.  Earlier estimates were that the threshold would be met in late summer, but new installation has been brisk and some current estimates are that it could be as early as May.   Customers who go solar before the threshold is reached will be under current rates and be insulated from paying the public use charge for 20 years.  Finally, it should be recognized that the federal income tax credit for solar installations has been renewed and will remain at 30% until 2019, after which it will probably decline.

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