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California Cuts Rooftop Solar Panel Subsidies



California Cuts Rooftop Solar Panel Subsidies

As global warming is increasing at a rapid speed, the need of the hour is to find measures and focus on sustainable activities. One of them is solar panels as they derive energy from the sun and provide electricity. Solar panels don’t lead to water contamination or waste generation. That’s why cities have been giving subsidies for the installation of rooftop solar panels. This act encourages the public to shift towards greener initiatives.

But in the turn of events, California has now reduced the subsidies given on rooftop panels. The decision taken by California can also affect other states to make the same decision.

California Reduces Incentives For Rooftop Solar Panels

Last Thursday, California’s Public Utilities Commission passed the proposal to lower the compensation given to households that had installed solar panels on their rooftop. This surplus electricity was contributing to the electric grid. As of today, there are approximately 1.5 million businesses, households, and utility consumers that have installed solar panels on their rooftops.

A discussion between the commission and consumer groups took place. The consumers said that their incentive pay-outs have resulted in unfair advantages for the rich consumers while the low-income groups and poor people have suffered. Arguing this, the renewable advocates and solar panel companies said that if the compensation is reduced, it would slow down the speed of solar panel installation and hinder the goals of achieving climate change.

California Reduces Incentives For Rooftop Solar Panels

Since the utilities given to homeowners are reduced, it might affect the renewable energy business of the state.

The five members of the decision-making commission said that the payment that homeowners are currently receiving through the net metering program is excessively generous from the state’s side and isn’t needed anymore. So, in the proposal that came into action on Thursday any compensation that is sent for the rooftop solar panel to the grid would be now decreased by 75%. This would apply to the new solar panels installed from April 2023.

This new move is decided while keeping in mind the state’s growth but it can have immense ramifications on the nation. Now the discussion about the extent to which these states should go to encourage the public for renewable energy is going on and many utilities have already opposed this new metering system.

They have put an argument forward that the metering system doesn’t consider the maintenance cost of electric grids. They also said that the system places an extremely high value on the power supplied by the rooftop solar panels.

While talking about the decision, Alice Busching Reynolds, California Public Utilities Commission’s president said that this would be better as compared to the status quo. Solar panel companies are offering several advantages to the state. But those advantages are subsidized due to those residents who haven’t installed solar panels. The state needs to be cautious about how it structures subsidies for the solar panel industry while using ratepayer funds.

When asked by the Solar and Storage Association of California, said that this new implementation can restrict the growth of rooftop solar panels. As the state is trying to decrease fossil fuel burning practices and increase clean energy practices, it needs to be really careful about future decisions.

This decision is opposed by the state’s environmental and consumer groups. They have witnessed that California has been the prime spot of major climatic impacts such as deadly wildfires, severe drought, and extreme heat. Whether the decision will bring a positive change or negative impact in the state is yet to be seen. This drastic approach by the commission was proposed in 2021 and has been implemented now.