A Commission Resolution to “Find the Next Problem”: A New Solar Pricing Incentivization to Help Customers Make California the Largest

The commission that regulates California’s utilities voted unanimously to cut a key incentive for rooftop solar that helped make the state the largest solar market in the nation.

According to reports, the new proposal included an additional $900 million to aid battery and solar systems for low-income customers, as well as a plan to encourage battery storage over selling excess power. The CPUC also said that the adjusted NEM rates would only affect new solar installations, and current panel owners can continue selling back to the grid at the higher rate.

The commission voted unanimously to approve the proposal changing the incentive system after three hours of public comment. The commission argued that the old payment structure served its purpose, and that now the pricing plan needs to evolve.

The callers argued that cutting the compensation payment would cause businesses to stop using rooftop solar because they’re no longer worth the investment.

“It’s not designed to last forever,” says Matt Baker, director of the Public Advocates Office, which supported the change in solar payments, “This incentive is no longer fit for purpose, so we need a new incentive to fit the next problem.”

The new pricing plan offers higher solar prices when the sun isn’t shining in the evening, but the state needs more power, according to Commissioner John Reynolds. The new pricing structure will encourage customers to buy energy storage batteries with their solar. To get compensation, customers should be able to store their daytime sunshine so that they can sell power at night.