Opening salvos in California’s rooftop solar struggle

How should rooftop solar customers be credited for the energy they produce?

California’s investor-owned utilities and the solar industry unveiled dramatically differing visions for a new solar tariff, in filings submitted Monday with the state Public Utilities Commission.

Solar customers currently receive the full retail rate for the electricity they generate, allowing them effectively to wind back the electric meter almost to zero. The addition of a new minimum bill starting in November will ensure solar customers in San Diego pay at least $10 a month.

The commission opened deliberations last year on a new tariff for California, the nation’s largest rooftop market, but delayed hearing formal proposals while it assembled a complex computer simulation to help weigh the costs and benefits of rooftop solar.

The California Solar Energy Industries Association, one of several solar industry groups to weigh in, has proposed an extension of the current solar tariff until at least 2019 to ensure the industry can weather the expiration of a key federal tax credit that offsets nearly one-third of the costs for adopting solar.

“The (computer) modeling does not suggest a need for changes in the first few years of the successor tariff,” said Brad Heavner, policy director for the association. “If things change and costs do not line up any more (with benefits) there will be a chance for the commission to revisit it.”

In a filing Monday afternoon, SDG&E put forward two new solar billing options for consideration.

Under one, solar customers would sell back all electricity at a wholesale rate of about 11 cents a kilowatt hour, while paying a standard utility bill.

The current average residential price for electricity in San Diego is about 23 cents a kilowatt hour. Solar customers who generate more electricity than they use are currently credited 4 cents a kilowatt hour for the excess.

The second option from SDG&E includes several new components, starting with a $21 fixed access fee, a small portion of which would pay for public programs such as subsidies for low-income customers and energy efficiency programs.

Those monthly solar bills also would include a demand charge based on the peak consumption at any one time, separate time-based prices for electricity delivered to the customer and some compensation for excess energy exported to the grid.

The utility also has asked to start charging a one-time interconnection charge of $280 that is waived under current rules.

“This is really from our perspective about, one, making sure this is fair for all customers and making sure that these costs are not borne by folks who have not made the choice to put solar on,” said Victor Vilaplana, vice president of customer services.

Among California’s three major utilities, SDG&E has the highest rate of solar deployment.

More than 60,000 utility customers in San Diego and southern Orange counties generate their own solar power. Most of those are household consumers, but they also include businesses and institutions like Walmart, the University of California and the U.S. Navy.

Legislation signed in October 2013 called for an overhaul of residential utility bills and solar tariffs. Details were left to the utilities commission, under guiding principles that include sustained growth of the rooftop solar industry and a better alignment of solar costs and benefits.

Utility customers who sign up for solar now can keep the current solar tariff for 20 years.

“When we think about sustainable growth, we really think about growth that is not predicated on subsidies, costs that again are supported by an industry that stands on its own two feet,” said Vilaplana of SDG&E.

Proposals were also expected from consumer and environmental groups.

The commission is expected to take months to evaluate and deliberate over the complex submissions. Many were filed at commission’s 5 p.m. deadline Monday.