California solar customers face compensation cuts amid rate reduction efforts

SACRAMENTO — The California Public Utilities Commission’s proposal to reduce compensation for solar customers has sent shockwaves through the solar industry.

The commission argues that customers who installed solar units before April 2023 are not contributing their fair share, prompting the recommendation to cut compensation.

Governor Gavin Newsom has called for statewide reductions in electricity rates and challenged the commission to devise a solution.

Severin Borenstein, UC Berkeley faculty director of the Energy Institute at Haas, supports the phasing out of solar subsidies.

“Most of those customers paid a significant amount for their rooftop solar system but they have saved far more than they ever paid. And so they have more than paid back their investment,” said Borenstein.

He further explained that customers without solar are bearing additional costs, including those related to past wildfires, wildfire prevention, undergrounding lines, and electric vehicle charging stations.

“Residential rooftop solar customers in California are shifting about 4 billion dollars a year onto other residential customers,” Borenstein said.

Eliminating this cost shift entirely could reduce rates by approximately 10 percent, he added.

However, Solar Energy Industries Association CEO Abigail Ross Hopper disagrees with the proposed compensation cuts.

“Curtailing rooftop solar is not the problem. Making customers who have chosen to go solar take a different financial transaction is not appropriate,” Hopper stated.

The next meeting of the Public Utilities Commission is scheduled for March 13 in Santa Clara.