If you’ve been paying attention to the development of public policy regarding the financial viability of solar energy, there are two things that are abundantly clear. First, while Federal policy initiatives certainly play a role in the overall picture, they are by no means the only factor. Second, if you want to know what to expect for the New York/New Jersey solar market, one of the best indicators of upcoming policy changes remains the California market. California has led the solar policy arena for the past decade, and insiders look there for trends in the rest of the U.S. market. It is for that reason that the most recent developments in California give us both reason to be optimistic as well as impetus to move forward quickly to avoid some expected changes.
Back in January, the California Public Utilities Commission (CPUC) made public the results of their nearly two-year long process to define the future of net metering in that state, and by extension, what we as Easterners should most likely anticipate as we watch the various challenges to net metering attempted by retrograde elements within the Public Utilities in various States.
First, the big, good news. CPUC strongly upheld the fundamental tenet of net metering, namely, that owners of solar energy systems will continue to be credited for the full retail value of the electricity they generate from their solar energy systems. This was critical, as it solidifies net metering as a bedrock assumption associated with the value of a solar energy system. Now the not so great news: CPUC compromised by agreeing to allow (up to) a $150 setup fee to compensate the Utility for the cost of installing the bidirectional meter. No big deal really, and one that seems essentially fair.
California also has some “non-bypassable charges” associated with net consumption that were not being paid proportionally by solar customers because of their lowered consumption. Going forward these charges will also need to be paid by solar customers as well. These charges go to pay for energy efficiency programs and assistance to utility customers who can’t afford to pay their full bills.
California also will now require residential solar net metered customers to go on Time-of-Use (TOU) rates. This could be a bit of a wild card for residential solar customers, since the utilities could change the hours associated with the different rates in the future. Right now TOU rates benefit solar customers because the highest rates correspond mostly to daylight hours. But if the Utilities raise rates for early evening electric use, this could end up hurting solar customers by increasing their charges at a time when solar is mostly unable to offset consumption.
Bottom line, in order to be sure that you are grandfathered into current net metering rules, it’s important to have your solar energy system installed and up and running before similar rules take effect in states like New York. So what are you waiting for? Contact us today.