Editorial: California must level rooftop solar playing field

California must dump its law giving rooftop solar companies an unfair advantage over their green-energy competitors.

And the state Public Utilities Commission needs to go back to the drawing board and design a rate plan that ensures solar customers aren’t subsidized by less-wealthy electricity ratepayers.

In 2013, Gov. Jerry Brown signed AB 327 into law, requiring that any rate plan for solar rooftop customers must assure the sustainable growth of the industry. That made sense a decade ago. It doesn’t today.

Rooftop solar still has a key role to play in fighting climate change. But solar no longer deserves a thumb on the scale in California’s effort to find the most efficient green-energy solutions. It’s past time for state lawmakers to allow wind, geothermal and other renewable energy sources a chance to compete on a level playing field.

Meanwhile, that unfair advantage in state law is at the heart of the PUC’s disappointing effort to craft fair rates and rules for the state’s rooftop solar incentive program — known as Net Energy Metering. The NEM rules have not been updated since 2016. The PUC is scheduled to vote Thursday on its latest proposal, which would determine the size of the credits customers receive on their utility bills when their rooftop solar systems generate more energy than they consume.

The PUC’s proposal wouldn’t impact current customers. New solar customers would save an average $100 a month on their electricity bills. Those that also have battery storage would save at least $136 a month on average.

The new proposal would extend the payback period for covering the capital costs of rooftop solar systems to an estimated nine years. But it is still too generous for solar customers and pushes too much of the fixed cost for the state’s electrical grid onto other ratepayers.

To say that neither the rooftop solar industry nor the state’s three largest utilities are happy with the PUC proposal is an understatement. But that both sides are screaming bloody murder doesn’t make it a reasonable compromise.

We understand that rooftop solar companies want to maximize profits and secure their long-term future. But utilities are right when they argue that rooftop solar owners don’t pay enough of the fixed costs for maintaining the grid, an inequity that would continue under the proposed plan. The burden of paying for power distribution, wildfire mitigation and investing in new technologies would continue to disproportionately fall to the rest of the electricity consumers.

It would perpetuate a regressive subsidy that unfairly burdens the poor. California’s estimated 1.5 million rooftop solar customers, who produce more than 11% of the state’s total electricity production, are disproportionately wealthy.

A Lawrence Berkeley National Laboratory study found that about half of the state’s solar adopters are in the highest 20% of earners, while only 4% come from the lowest 20%. The PUC says that more than $4 billion in costs was passed on to non-solar customers in 2021.

The PUC needs to go back to the drawing board and design a plan that ensures that all customers fairly share the burden of utilities’ fixed costs.