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 The decision by California's Public Utilities Commission is being
watched far beyond the Golden State, which has long led the nation
on renewable energy policies. Though solar still makes up a small
portion of the nation's power generation, government mandates to
reduce the use of fossil fuels have many states and utilities
thinking about how they will integrate ever larger amounts of
rooftop solar onto their power grids.
"This is a market that has really set the bar for how residential
solar grows on a national level," said Cory Honeyman, who tracks
state solar policies for industry research firm GTM Research, adding
that California sets "important precedents" for how other states
approach rooftop solar.
Net metering, the policy that allows homeowners with solar panels to
sell the power they generate but don't use back to their utility,
sometimes giving them a credit on their bill, is critical to making
solar cost competitive.
 "This is the single most important decision facing the solar
industry in the United States today," said Bernadette Del Chiaro,
executive director of industry lobbying group the California Solar
Energy Industries Association. "Bad net metering decisions will kill
consumer choice."
She pointed to Nevada, where regulators last month approved changes
to the state's net metering policy that prompted solar companies
like SolarCity to stop doing business there.
Net metering has underpinned the rapid growth of residential solar
installers like SolarCity Corp and Sunrun Inc, and those companies
have fought hard to preserve it in California and elsewhere.
But the policy is criticized by utilities and others who say it
rewards solar users while leaving other ratepayers to shoulder the
cost of maintaining the electricity grid.
"If you have customers paying near zero bills but still using the
grid, you can't scale that to a large percentage of customers," said
Matthew Freedman, an attorney with The Utility Reform Network, a
ratepayer advocacy group that proposed an alternative to net
metering to the PUC. "We are concerned about the 95 percent of
customers who don't have solar, and making sure their rates aren't
being driven up to pay for the subsidy."
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Most states have passed laws allowing net metering, but a 40 percent
drop in the cost of residential solar installations in the last five
years has prompted some to review those policies amid calls by
utilities to roll them back.
In 2013, a new California law directed the state's Public Utilities
Commission to design a new net metering program to take effect in
2017.
The PUC on Thursday will decide what changes to make to the policy,
if any. The commission signaled last month that it was prepared to
preserve net metering in its current form, but details like
additional charges for utility transmission lines and a requirement
that solar customers move to time-based rates could undermine the
technology's cost-competitiveness.
The state's three investor-owned utilities, Pacific Gas & Electric,
Southern California Edison and San Diego Gas & Electric, initially
argued for fixed charges for solar customers, but in the last month
authored a new proposal that would preserve net metering but reduce
the rate at which solar customers are compensated for the power they
export.
"We support some level of subsidy for solar," Southern California
Edison President Pedro Pizarro said at a green energy conference in
Los Angeles on Tuesday. "The whole debate is about: how much?"
(Reporting by Nichola Groom; additional reporting by Bruce Wallace;
Editing by Terry Wade and Phil Berlowitz)
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