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California’s rooftop photo voltaic and storage market is altering, and the business is studying to function on this new actuality.

California has been America’s prime photo voltaic marketplace for over a decade, putting in extra photo voltaic capability than any state yearly till Texas took over in 2021. Whereas California reclaimed the primary rating in 2022 and installations look robust in 2023, the shift in 2021 could also be a preview of what’s to come.

In late 2022, after years of debate, the California Public Utilities Fee (CPUC) unanimously permitted a brand new strategy to compensate rooftop photo voltaic prospects for the surplus power they generate. This resolution strikes the state from retail charge “internet metering” to a brand new “internet billing” construction that cuts the worth of rooftop photo voltaic credit by about 75%.

The worry amongst photo voltaic business leaders is that this shift was too drastic, and importantly, too abrupt.

Rooftop photo voltaic set up forecasts in California have since cratered.

In response to forecasts from Wooden Mackenzie, California’s residential photo voltaic market will see a 40% decline in 2024, and the state’s industrial rooftop sector will decline by 25% from 2024 to 2025. After many years of California main annual photo voltaic installations in the US, Texas will take the highest spot once more in 2024-2028.

The query now’s easy. How does California’s rooftop photo voltaic and storage business adapt and thrive on this new coverage actuality, and what does the long run maintain?

We all know for sure that California’s photo voltaic business is just not going away. The sector is a cornerstone of the state’s financial system, using over 78,000 individuals and driving practically $100 billion of personal capital into communities statewide. Photo voltaic offers practically 30% of California’s electrical energy wants, and the state has handed legal guidelines committing itself to deploy extra photo voltaic initiatives of all sizes to satisfy its bold local weather targets.

The Photo voltaic Power Industries Affiliation (SEIA) and its companions proceed to advocate for a coverage atmosphere that higher permits photo voltaic and storage companies to function whereas serving the individuals of California’s unquestionable demand for clear power. Rooftop photo voltaic and storage is a crucial supply of resilience that gives dependable energy for houses and important infrastructure. It’s pressing that state insurance policies empower Californians to decide on this expertise within the face of worsening local weather impacts and excessive electrical energy prices.

When California state leaders minimize compensation charges for rooftop photo voltaic, they did so with the intention of encouraging residential battery storage installations that will export electrical energy throughout instances of stress on the grid.

Regardless of this clear intention, late final yr the CPUC permitted new guidelines that stop residential storage prospects from utilizing their extra power credit to offset utility supply costs. The change upends the already precarious steadiness that was struck in the course of the Internet Billing Tariff continuing and disincentivizes photo voltaic and storage prospects from exporting power to the grid as a result of they won’t obtain full compensation for these exports. The California photo voltaic and storage business was already struggling after the transfer to internet billing, and this extra coverage provides a stage of complexity that will likely be troublesome to overcome.

This string of current CPUC selections is already inflicting important job losses and enterprise closures, and it’s placing California’s clear power progress in danger as local weather impacts proceed to improve.

There’s nonetheless time for leaders to reverse course, and that point is now.

Along with adjusting these damaging coverage selections, state leaders should encourage extra photo voltaic and storage adoption within the near- and long-term if California goes to satisfy its 2030 clear power targets.

SEIA is working to deal with these points, together with taking part within the state’s prevented value calculator continuing to verify it correctly values and compensates photo voltaic and storage prospects for the ability they export to the grid. SEIA additionally filed for a rehearing to permit prospects to make use of extra power technology credit to offset utility supply costs and return to the Internet Billing Tariff beforehand agreed to in 2022.

Policymakers ought to act to cut back interconnection delays, increase power storage incentives, and assist incentives for low- and middle-income households to entry photo voltaic and storage.

SEIA can be urging state regulators to reject utility proposals to implement important new month-to-month mounted costs on all family electrical payments.

Put merely, state regulators have taken a hammer to Californians potential to put in photo voltaic and storage in current months. These selections are discouraging households and companies from deploying the clear power wanted to cut back stress on the grid and tackle local weather change.

California’s photo voltaic and storage business can discover ways to function on this new coverage actuality, and it’ll, however solely with assist from state leaders. SEIA is asking on policymakers to mitigate the destructive results of those damaging insurance policies earlier than California loses extra jobs and local weather impacts worsen.

California’s clear power future is determined by it.

Courtesy of SEIA.