Many states are making great strides when it comes to boosting renewable energy production in alignment with President Barack Obama’s goal to generate 30 percent of the nation’s electricity with solar by 2050. Solar power is prevalent in California but, last month, the state made a move many are calling a big mistake. Gov. Jerry Brown signed into law a measure that requires the state to obtain half of its electricity from renewable sources by 2030. However, rooftop solar panels were excluded from the bill, which means utility companies will have to pay more to find renewable energy elsewhere, because the surplus energy they buy back from individual homeowners will not count toward the state’s goals.
The cost of solar technology has been steadily dropping, leading to a boom in the industry – both for individual homeowners and for utility companies. Rooftop solar allows residents to generate their own energy, saving some or all of the money they would otherwise have to pay to a utility company. Major utilities in California, like PG&E and others, back the new legislation and see it as an effort to inhibit growth in the rooftop solar industry.
Critics of the law claim that excluding rooftop solar from consideration in the state’s renewable energy plan unfairly tips the scales in favor of large-scale solar operations, and effectively paves the way for utility companies to increase prices.
The rooftop solar industry faces more challenges than this in the coming months. Utility companies in California could take up a practice seen in other states, such as Arizona and Oklahoma, of imposing fees on rooftop solar installations in an effort to recover some of the cost incurred when that energy is sold back to the utility company. In areas where these fees are already in place, sharp decreases in new installations have been noted, making it clear that consumers see the additional fee as a deterrent.
Coupled with the impending expiration of federal tax credits, these factors are creating new challenges for rooftop solar companies in California – and it’s possible they could be driven out of business entirely.