California regulators voted unanimously on Thursday to significantly reduce how much homeowners will have to pay for electricity they send to the electric grid with rooftop solar panels — a move that could hurt the growing renewable energy business.
Five members of the California Public Utilities Commission said existing payments to homeowners through a program called net metering are an overly generous subsidy that is no longer required to encourage the use of solar panels. under The proposal was accepted on ThursdayCompensation for energy sent to the grid by rooftop panels will be reduced by around 75 percent for new rooftop solar homes from April.
The move could have national ramifications, as regulators in other states often follow California’s lead. Debates are simmering across the country about how far states should go in promoting renewable energy use. Many utilities have long opposed net metering, arguing that it does not adequately take into account the cost of maintaining electric grids and places too much value on the electricity provided by rooftop panels.
“This decision is substantially more equitable than the current status quo,” said Alice Bushing Reynolds, president of the California Public Utilities Commission. She added that the solar industry provides many benefits to California but is subsidized by residents who don’t own solar panels. Be very careful,” he said.
The California Solar and Storage Association said the decision would limit the growth of rooftop solar even as the state tries to reduce the burning of fossil fuels, a leading cause of climate change, and increase the use of clean energy.
Consumer and environmental groups that have criticized the plan have noted that California has experienced some of the most devastating impacts of climate change, including deadly wildfires, extreme heat and severe drought.
“This decision represents California’s clean energy leadership, climate solutions and equity,” said Bernadette Del Chiaro, executive director of the California Solar and Storage Association. “It goes against the Biden administration’s clean energy goals for America.” The decision will result in job losses and business closures, particularly in California, where the majority of founders are small businesses.
California began heavily promoting solar use in the early 2000s under Republican Governor Arnold Schwarzenegger. It quickly became the nation’s leader in the use of rooftop solar. About 1.5 million residential and commercial rooftop solar systems have been installed in the state. Those small systems were provided About 10 percent of California’s electricity was generated last yearof the Energy Information Administration, a federal agency, rather than nuclear power plants or hydroelectric dams.
By reducing subsidies to rooftop solar owners, the commission aimed to establish what would be a more equitable system, accepting the arguments of utility companies and some consumer and environmental groups such as the Utility Reform Network and the Natural Resources Defense Council. Affluent homeowners are more likely to install rooftop solar systems, the groups said, leaving low-income people to shoulder the higher costs of supporting the electricity grid.
Under the new net metering program, the average residential customer of Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric who install solar panels will save $100 a month on their electric bill. Save at least $136 a month, according to the commission.
As a result of those savings, the average household installing a new solar or solar-and-battery system could pay off the system in nine years or less, it said. For homeowners who already have rooftop solar panels, compensation will not change for at least 20 years after their system is installed.
The Commission took a less drastic approach than that Proposed a year ago. The previous proposal would have imposed a reduction in charges for excess electricity sent to the grid New monthly fee On the utility bills of rooftop solar homes.
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