North Coast Solar Stocks

July 6, 2009

Solar: Should Utility Customers Subsidize Solar Homes?

Filed under: EIX, PCG, SRE — Tags: , , , , — Jason @ 11:42 am

Posted by Eric Savitz
barrons.com

Here’s a tricky question: should the average electric utility customer pay higher rates so that people who install solar systems can sell power back to the grid?

That question is at the heart of a story today in the L.A. Times about whether to expand a program under which California utilities buy back power from customers with solar panels. Current state law allows utilities to cap solar power purchases at 2.5% of their generating capacity; a provision now being debated in Sacramento would quadruple the cap to 10%. The piece notes that Pacific Gas & Electric (PCG) could hit the 2.5% cap by the end of the year, while Southern California Edison (EIX) and San Diego Gas & Electric (SRE) are moving more slowly.

All three utilities oppose the higher cap. The Times notes that while the power companies support solar power, they want more information on whether it is fair to increase financial incentives for solar-panel ownership at the expense of the rest of their customers. The piece points out that the so-called “net metering” program which allows people to sell power to the grid is in addition to a 20% state subsidy and a 30% federal income tax credit.

The piece noted that a staff report by the state Senate’s Energy, Utilities and Communications Committee asserted that the utilities are over-paying for power produced by solar customers. Under the legislation, the solar companies pay a full retail rate, “well above the value of the generated power.”

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