Bay Area solar power owners face cuts to incentives amid rising energy costs

In California, a controversial proposal is under discussion, which seeks to alter the compensation rates for owners of rooftop solar systems. The Public Utilities Commission (PUC) has identified these solar owners as contributing to the rising energy bills for residents, specifically stating that they will incur approximately $8.5 billion in expenses for the 15% who utilize rooftop solar in 2024. The faculty director of the UC Berkeley Haas Energy Institute, Severin Borenstein, elaborated on how installing rooftop solar shifts costs onto those who do not have solar energy systems, mostly affecting low-income individuals who bear the brunt of rising energy prices. This cost transfer has reportedly led to a 15.6% increase in the average residential customer’s bill, prompting the state and Borenstein to reconsider the generosity extended to solar owners prior to such changes. The PUC proposes adjustments that include a grandparenting clause, ensuring anyone who had a solar system installed before April 2023 remains under the more favorable terms for the next two decades. These terms are tied to the Net Energy Metering (NEM) system, which offers higher compensation rates to existing solar owners. However, this transition has not been welcomed by some solar owners like Gurgol, who expressed concerns regarding the proposed changes, viewing them as a violation of their existing agreements. They argue that they have contracts with PG&E guaranteeing their favorable rate for the remaining ten years. The backlash has ignited discussions about a potential class-action lawsuit among discontent solar owners. Additionally, the new proposal suggests implementing a monthly fee on solar owners to contribute to the maintenance of the power grid and aims to limit compensation credits to the energy cost at the time of installation, which would negate the substantial price increases witnessed in recent years. Many who invested in solar energy during a period of state encouragement believe that their agreements should be honored, leading to substantial dissatisfaction and calls for action among rooftop solar owners. As the PUC continues to evaluate these proposals, the potential re-structuring of compensation rates represents a much larger debate about energy costs, equity, and access within California's energy landscape.