Updated 5 p.m. Friday
California utility regulators on Thursday approved major changes to the state's booming rooftop solar market that they say will more evenly spread the cost of energy and help reduce the state's reliance on fossil fuels in the evening.
The state has long led the nation in adoption of rooftop solar panels, and today more than 1.5 million California homes and other buildings have them. Under a decades-old program, people with solar panels can get paid by their power companies by sharing excess solar energy they don't need, leading some solar homes to pay minimal electric bills.
That's led to criticism that rooftop solar customers aren't paying their fair share into the rest of the energy grid, which many still rely on for power when the sun goes down. Power rates also include things like transmission equipment and wildfire prevention work, and regulators approve a set amount of money that utilities can recover from customers.
The policy approved unanimously by the California Public Utilities Commission lessens the overall payment for selling excess power. It also revamps electric rates to try to encourage people to build home storage systems alongside their panels, so they can tap that stored power at night or feed it back to the grid, either of which would help the system rely less on fossil fuels.
“For the rooftop solar industry to remain sustainable, we must place greater value on exports during the truly fossil-heavy time of day,” Commissioner John Reynolds said. “In short, we are making this change because of our commitment to addressing climate change.”
Although solar provides a lot of California’s power during the day, fossil fuels largely take over in the evening and during the night. Sometimes, California has more solar power than it can use during the day. Existing rooftop systems are capable of generating about 12,000 megawatts of power, according to the commission, nearly six times what the state's last remaining nuclear plant generates.
But battery storage is not yet widespread. Today about 16% to 20% of the 150,000 households that install solar panels annually in California add battery storage systems, according to industry estimates. As of 2020, California started requiring all newly built homes to have solar panels, but there is no requirement for storage.
The commission's vote followed sustained criticism over three hours of public comment in which some speakers accused the commission — and Democratic Gov. Gavin Newsom's administration — of hindering the state's climate efforts.
