Homeowners and businesses with rooftop solar panels frequently generate more energy than they use, but they rarely see any green from going green in sunny California.
21 states and the District of Columbia include rooftop solar panels in their clean energy mandates, which include different benefits for homeowner and business participants who generate more electricity than they consume. According to legislation signed by Gov. Jerry Brown in October, however, California home- and business-owners are effectively barred from receiving clean energy credits from electricity they supply to the grid.
Among states with clean energy mandates, solar industry advocates say that California is practically unique in its approach of only rewarding clean energy credits to commercial installations that deliver electricity to the grid.
The state’s renewable energy goals prioritize large-scale projects like solar and wind farms that provide non-municipal utilities with electricity. Rooftop solar installations fall into a lower category than such large-scale projects, and homeowners and business owners are missing out on a potential cash windfall.
Large-scale producers of clean energy earn a credit every time they provide the grid with 1,000 kilowatt hours of electricity, about the amount that the average home consumes in a month. The value of that credit for large-scale producers is about $50. The credits can be sold or traded to PG&E and public utilities to help offset their carbon footprint.
According to state rules, however, the basic value of rooftop solar is one-hundredth of a penny, essentially worthless from a financial standpoint. This means that even if a home- or business-owner generates 1,000 kilowatt hours of electricity from a rooftop solar installation, they will only get a credit worth one-hundredth of a penny from the state of California.
For their part, utilities would love to see incentives for homeowners and business owners to install rooftop solar panels. The more rooftop solar that homeowners and business owners install the less utilities would have to buy or build themselves. Instead of building mega-plants, utilities could buy more credits from individuals and businesses.
Solar power companies, strangely enough, are some of the ardent opponents to greater incentives for rooftop solar installations. For companies like SunEdison and First Solar, rooftop solar is a “disruptive technology” that threatens their business model, which depends on keeping power generation centralized at large solar and wind farms.
What little incentives exist for homeowners to install rooftop solar panels are already under threat. A 30% federal tax credit to encourage homeowners to install rooftop solar panels is set to expire at the end of 2016 and may not be renewed for the coming year.
In addition, the California Public Utilities Commission has proposed new rules that would require homeowners with rooftop solar panels to pay monthly fees to remain connected to the grid. The Commission argues that since they do not pay for electricity, solar-powered homeowners do not contribute to the maintenance of the power lines, transformers and routing stations that keep the grid running, so they should have to pay a fee to stay connected.
Before you decide to install solar-powered rooftops for your home, it is highly recommended to speak with a professional real estate agent. Contact our specialists for professional advice on what home improvements you should make, or for information on properties available to you.
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(all data current as of 5/29/2017)
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