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California Plans Solar Policy Reform Prompting Tesla Rebuttal

published: 2022-02-04 9:30

California's net metering policy can be said to be the main force behind the significant increase in the amount of renewable energy installations in California. Recently, California has shown intent to reform this policy but has aroused opposition from the industry. Tesla, an American solar and electric car manufacturer, pointed out that changes will significantly impact customers who have installed or are planning to install rooftop solar panels.

In the past, under net metering policy, 1.3 million households in California installed solar energy systems, accounting for 45% of the total solar installations in the United States. However, since only the wealthy have the spare income to install solar panels, many people over the years have criticized this policy for making the rich richer and the poor poorer.

In response, the California Public Utilities Commission (CPUC) wants to change all of that. Under the new net metering regulations (NEM 3.0), in addition to electricity discounts and a monthly grid maintenance fee of $8 per kW, electricity bills may increase by $50~80 per month.

On the other hand, California also intends to reduce the benefits of selling solar power back to the grid, reducing the rebate rate to 3~4 cents per kWh, much lower than the current 17~44 cents, which will naturally prolong solar energy construction. If this is the case, the time frame need to break even on solar may be extended from 7 to 11 years.

At the same time, CPUC also pointed out that if a household solar system has been installed for 15 years, a new plan will be used. Tesla believes that this is a violation of the basic principle of fairness.

CPUC will consult with major power companies, solar industry representatives, and consumer groups, and will vote on the proposal as soon as the 27th of this month. At that time, they will collect public feedback. If the proposal is passed, the new policy will be adopted after May 28th and effective upon submission of an interconnection agreement. This is the most significant reform of net metering policy since the 1990s.

(Image: Tesla)

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