The monthly fee, condemned by the solar industry and environmentalists and likely to be controversial with solar customers, was described in a proposal Edison submitted to the California Public Utilities Commission last month. It would charge customers who install solar panels on their roofs in coming years $3 per kilowatt of capacity. That means a homeowner with a 5-kilowatt roof solar system – an average size – would pay a fee of $15 per month to Edison just for having the system.
If adopted by the CPUC, the proposal would affect residential solar customers statewide. However, the 131,000-plus Edison customers across Southern California with solar installations today would be grandfathered in under the old rules.
Edison also suggested paying future solar customers less for the electricity they generate, don’t use and end up selling back to the grid.
Edison says the per-kilowatt fee, or one like it, is necessary to pay for the cost of maintaining the power grid.
“While the rays of sun are free, the technology needed to harness them, convert them into electricity and transfer that electricity to where it is needed is not,” said Caroline Choi, Edison’s vice president for Energy and Environmental Policy.
Edison’s proposal was one of roughly 10 submitted to the CPUC by utilities, consumer advocates and environmental groups as part of a process for redesigning the state’s rate and fee structure for solar customers. The CPUC must write the rules for that new “net metering” system by the end of the year.
Currently, here’s how solar customers are compensated for electricity they sell back to the grid: their electric meter essentially runs backward when they generate more electricity than their house can use. The customer gets compensated a full, retail price for that electricity – the same price they pay to receive electricity.
Edison is proposing the customer get compensated at a lower, wholesale price – the price Edison would pay to buy electricity from another industrial source.
Brad Heavner, the policy director for California Solar Energy Industries Association, which represents solar companies, calculated that the compensation for solar customers would drop by more than 50 percent – from roughly 18 cents per kilowatt hour to 8 cents per kilowatt hour.
Heavner’s group also submitted a proposal to the CPUC, calling for minimal changes to the state’s net metering policy and re-evaluating the need for additional fees in several years.
Heavner said that as more customers go solar, it costs the utility less to maintain the grid because less electricity is flowing through the wires. For instance, the electricity flowing from a solar customer’s panels on to the grid is picked up and used by neighbors – traveling a very short distance and causing little wear on the grid.
Heavner sees Edison’s proposal as an attack on the solar industry.
“They’re threatened by rooftop solar, and they want to make the industry go down,” he said.
The industry is under fire in other states such as Arizona, where a utility group has proposed a $21-per-month fixed charge for solar customers.
By the end of the year, the CPUC has to write new net metering rules that will kick in at a later date. As Heavner noted, the new rules could be identical to the old ones. The new rules will take effect when 5 percent of electricity generation for investor-owned utilities like Edison falls under solar-generated net metering, or mid-2017, whichever comes first. As of July, the state was at 2.74 percent of electricity from net metering.
Other changes are afoot for California’s solar industry. In July, regulators approved a new rate structure for all ratepayers that reduces the number of tiers from four to two, meaning customers who use more electricity pay a rate closer to those who use less. The rate structure also pushes utilities to charge more during peak demand times, with the goal of decreasing the need for greenhouse-gas emitting natural gas plants, which are fired up when demand peaks.
Most important, the new rate structure allows utilities to charge a $10 minimum bill – meaning customers pay at least $10 no matter how little electricity they use or how much they generate on their solar panels.
More than 131,000 rooftop solar systems – or almost 600 megawatts of capacity – have been installed in Edison’s service area, which includes most of Orange, Riverside, San Bernardino and Ventura counties, along with Los Angeles County, minus the city of Los Angeles.
Edison must generate 33 percent of its electricity from renewable sources, including rooftop solar, by 2020. In 2014, about 23.5 percent of electricity delivered by Edison came from renewable sources.
©2015 The Press-Enterprise (Riverside, Calif.) Distributed by Tribune Content Agency, LLC.