California court considers solar subsidies as excess solar drives panel shutoffs

(The Center Square) - The California Supreme Court is soon hearing a case that could determine the future of California solar energy.

Under new solar metering rules, owners of solar panels on homes and buildings are paid for the value of the energy they produce, which is less than the earlier standard of the net difference in energy produced and consumed; abundant solar energy generated during the day is of lower grid value than fossil fuel and battery provided energy used at night.

Solar subsidy proponents argue the new rules don’t factor in the social benefits of self-generated solar, while the California Public Utilities Commission and lower state courts have said the new rules meet the legislature’s order to improve equity between generating and non-generating customers; households with rooftop solar tend to have double the median income of non-solar households.

“It’s no secret that the benefits of wind and solar energy are not equally enjoyed in some communities,” said Senate Utility, Energy and Communications Vice Chair Brian Dahle, R-Bieber, to The Center Square. “It's time for energy resources, renewable or not, to stand independently without offsetting costs by adding more fees and relying heavily on taxpayers' support.”

Even with these changes, the CPUC says California’s solar metering program will cost customers without solar an estimated $6.5 billion in 2024, a figure that has doubled from 2021; 15% of the average non-solar household’s energy bill goes towards rooftop solar payments.

California has spent $103 billion on its solar energy systems, much of it in the form of taxpayer funding, meaning the real cost to non-solar owners is even higher through taxation.

Energy experts say that even if the state moves on from subsidizing solar self-generation for homeowners and commercial buildings, taxpayers are still going to be subsidizing solar, especially given the state’s commitment to 90% clean energy by 2035 and 100% by 2045.

“It is correct to claim that taxpayers who don't own their own rooftop solar panels are subsidizing those who do. But it is incorrect to say that if those subsidies are taken away, taxpayers won't still be subsidizing solar,” said California Policy Center co-founder and energy expert Edward Ring to The Center Square. “They'll just be subsidizing giant utilities and transmission line installers instead.”

Ring says while privately-financed rooftop solar stands up as a positive investment without net metering, it doesn’t do nearly as well.

California now requires new homes to have solar panels, but despite this, solar groups say new solar metering rules will still reduce home solar installations by 40% in 2024.

California solar capacity has exploded, rising from 850 gigawatt-hours in 2009 to 40,494 GWh by the end of 2022. There’s so much solar, energy prices go negative during the day, meaning “purchasers” are paid to take solar. When there’s so much no one will buy it, solar providers must “manually curtail production.”

The case will likely be heard by the California Supreme Court in the coming months, and, if earlier rulings are upheld, could signal a major transition in the state’s long-running solar boom.