California approves plan to cut payments to solar homes for energy sent to grid

California utility regulators on Thursday unanimously approved a plan that lowers how much utilities pay households that install new rooftop solar panels and send energy back to the grid.

The policy, which the California Public Utilities Commission proposed last month, changes what’s known as “net metering” to offer fewer credits to solar owners for surplus power in comparison with what utilities would pay for other sources of clean energy.

The plan also offers credits to solar systems that are attached to battery storage, giving homes a reserve of excess power when demand is low during the day. The battery would transmit the power to the grid when the sun is down and demand is higher.

Existing rooftop solar customers aren’t affected by the new plan.

“The updated billing structure of the tariff is designed to optimize grid use by the tariff’s customers and incentivize adoption of combined solar and storage system,” according to a decision by the commission’s administrative law judge. “These changes will help meet California’s climate goals and increase reliability, while promoting affordability across all income levels.”

California utilities have argued that the rooftop solar program is antiquated because they have to pass on the costs of subsidies to customers, unfairly charging millions of customers without solar panels, especially lower-income households. Solar companies said the net metering system was a necessary incentive to install rooftop panels.


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