California Power Bill Overhaul Threatens Home Solar Growth

California is poised to overhaul the way consumers pay for power in a move that could slow the growth of solar in the state.

The California Public Utilities Commission will vote Friday on proposals that would lower costs for heavy users and charge all customers a fixed monthly fee to help make up some of the lost revenue.

Consumers’ desire to gain more control over power costs has helped spur the growth of rooftop solar in the state, which has become the biggest U.S. market for such systems with a record 670 megawatts installed last year, according to the CPUC.

If utilities design a rate structure that reduces prices for big energy users and imposes grid connection fees, that “would make rooftop installations less financially attractive to customers,” Kit Konolige, an analyst for Bloomberg Intelligence, wrote in a June 29 research note.

The proposed new rules would narrow the range of rates charged to customers tied to the amount of power they consume, which leads to customers paying more as they use more power. The steep jump in the sliding rate has been a factor pushing the biggest electricity users toward solar. The plan includes a standard connection fee of as much as $10 a month.

State regulators will also vote on whether to require utility owners PG&E Corp., Edison International and Sempra Energy to create so-called “time-of-use” rates to be put into effect by 2019. The new rates would make power more expensive when demand is high, and less expensive when it’s low, giving consumers the option of lowering their bills by deferring some usage to when rates are cheaper.

Copyright 2015 Bloomberg

Lead image: California flag. Credit: Shutterstock.

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