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California Regulators Protect Rooftop Solar From Utilities

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Solar panels on a San Francisco high school | Photo: Matt Montagne/Flickr/Creative Commons License

The state agency charged with regulating public utilities Thursday announced that Californians who sell extra power from their rooftop solar arrays to the state's utilities can keep doing so at current rates for 20 years.

On Thursday, the California Public Utilities Commission (CPUC) made its decision on the maximum length of existing contracts for rooftop solar owners who have so-called "Net Energy Metering" agreements with the state's utilities, under which those customers feed electricity from their rooftop solar arrays into the grid, running their electric meters back to zero.

The decision establishes a "transition period" after which new, longer-term rooftop solar policies yet to be enacted by the state will go into effect, starting in July 2017. The CPUC's decision to establish a 20-year transition period rather than a much shorter one urged by utilities is being hailed as a victory for rooftop solar.

The CPUC decision was mandated by Assembly Bill 327, a sweeping reform of rooftop solar regulations passed by the legislature last year. Solar advocates had warned that a shorter transition period would punish utility customers who'd made a commitment to installing solar on their properties, and had urged CPUC to set a long period so that property owners with solar panels would be able to realize savings on their utility bills.

Those solar advocates included Governor Jerry Brown, who urged in a note when he signed AB 327 into law that the CPUC establish a transition period roughly as long as the expected useful life of typical solar panel setups. That useful life is generally considered to be 20 to 30 years.

The state's utilities and some ratepayer-focused groups has asked for a much shorter transition period, ranging from four to twelve years. That would in theory have allowed solar panel owners to recoup their investments but not necessarily save in the long run, significantly reducing a major incentive for solar installations.

In its decision, the CPUC essentially mirrored solar advocates' arguments:

[W]e find that adopting a transition period that denies customer-generators the opportunity to realize their expected benefits would not be in the public interest, to the extent that it could undermine regulatory certainty and discourage future investment in renewable distributed generation.

"By rejecting the utility proposals, the CPUC stood up for California consumers," said Brad Heavner, Policy Director of the California Solar Energy Industries Association. "With this decision, the Brown Administration is sending a clear message that California will always be a solar friendly place."

Thursday's ruling applies to all net metering agreements established before July 1, 2017, and the 20-year period runs from the date the solar panels in question were (or are) hooked up to the grid. Solar systems going into service after July 2017 will be subject to as-yet-unwritten CPUC rules on a "successor tariff," the CPUC's jargony phrase for a longer-term payment structure for future rooftop solar systems in the state. The successor tariff was also mandated by AB 327.

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