The solar industry in Los Angeles is preparing for new rules from the California Public Utilities Commission (CPUC) that will slash subsidies for new solar installations.
The phones at Pasadena-based solar rooftop installer Nopec Inc. — also known as Run on Sun — are ringing constantly as customers try to beat the April 14 deadline, which is when the new CPUC rules take effect.
“For many people, this will make a very drastic change overnight to the value of projects,” said Jim Jenal, chief executive of Run on Sun.
The rules will impact California’s three investor-owned utilities: Southern California Edison, San Diego Gas and Electric and Pacific Gas and Electric. The changes apply only to customers who install solar after April 14.
However, the rules could still have a significant impact on Los Angeles, as Southern California Edison has 2.05 million customers in the county, and 134,855 of them have rooftop or on-site solar power systems.
New rules
The rules are an update to the Net Energy Metering 2.0 system, which determines the credit given to rooftop solar customers for the power they send back to the grid. The new rules, NEM 3.0, will reduce the compensation rate for ratepayers who install solar power systems from an average of 30 cents per kilowatt to 8 cents, a nearly 75% reduction, according to the California Solar & Storage Association.
“Whereas you might have someone who installs a 6- or 7-kilowatt system and has a payback in five to seven years, they’ll see that go to 14 years or more,” Jenal said.
NEM 3.0 also includes $900 million in incentives for pairing solar with battery storage systems and $630 million to encourage low-income customers to install solar and battery storage. The CPUC expects that an average residential customer with a solar and battery storage system will save at least $136 a month and fully pay off their system within nine years.
CPUC anticipates a bump in installations prior to the April 14 sunset of NEM 2.0, and…
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