How California’s new rooftop solar rules will affect you
The seismic shift coming to California’s rooftop solar market in 2023 has been brewing for nearly a decade.
A bill overwhelmingly approved by state lawmakers in 2013 ordered the California Public Utilities Commission — which regulates investor-owned utility companies — to rework a solar incentive program called net metering. Lawmakers directed the agency to ensure that the “total benefits” of the program were “approximately equal to the total costs” — meaning utility customers without rooftop solar panels weren’t paying more to subsidize their solar-powered neighbors than they should be.
But the bill also ordered the Public Utilities Commission to ensure that the solar market “continues to grow sustainably,” and to adopt incentives targeted at low-income families who might not be able to afford solar otherwise.
“We required the [commission] to design a program that does two things: create certainty for rooftop, and at the same time address the cost shift for non-solar customers,” then-Assemblymember Henry Perea, who wrote the legislation, told me in 2015. “It’s not an easy task.”
Most certainly not. The commission’s long-awaited decision, which I wrote about for The Times last week, spurred all sorts of fiery reactions. Solar installers and environmental activists said it would crater the market and put clean energy out of reach for far too many Californians, lower-income households in particular. The big utility companies — Southern California Edison, Pacific Gas Electric and San Diego Gas Electric — said it didn’t go far enough to reduce incentive payments, and would result in continued bill increases for their non-solar customers.
If you live in California, you may be wondering: What does this mean for you? If you already have solar, will you find yourself paying more? If you’ve been thinking about investing in solar — or adding a battery to your existing solar system — how have the economics changed? If you just want your monthly electric bill to stop going up, how much relief can you really expect?
I’ve got answers below. Take a read if you’re interested, or scroll down for this week’s top stories from around the West.
Watch L.A. Times Today at 7 p.m. on Spectrum News 1 on Channel 1 or live stream on the Spectrum News App. Palos Verdes Peninsula and Orange County viewers can watch on Cox Systems on channel 99.
I want to go solar. Is it still a good idea?
You can definitely still save money with a rooftop system. It just might take longer than it did before.
Under the old rules, the expected “payback period” for homes served by Edison and PGE was five to six years, according to an industry trade group. That means Edison and PGE customers who bought solar panels — a purchase typically in the 20,000 range, once federal tax credits are taken into account — could expect to make back their upfront investment in five to six years through lower electric bills. After that, they’d continue to accrue bill savings for as long as their systems lasted.
SDGE customers could expect an even shorter payback of four years, due to the utility’s especially high electric rates.
Starting in mid-April, when the new rules take effect, the calculation will change. The Public Utilities Commission has estimated a payback period of nine years for Edison and PGE residential customers who go solar after April 13, and six years for homes served by SDGE.
Solar installers say that’s too long for households that don’t have money to burn. They also think the commission used a lowball figure for the cost of solar, and thus underestimated how long it will take consumers to make back their investment.
Commission members have made the opposite argument, saying payback periods will probably be shorter than they’ve calculated. That’s because the agency’s calculations don’t account for the near-inevitability that electric rates will continue to rise, leading to higher monthly bill savings than they’ve estimated.
Are there extra incentives for low-income households?
Yes. Under the new rules, low-income homes enrolled in subsidized electricity programs known as CARE or FERA will receive higher payments for solar energy they export to the power grid — about 9 cents per kilowatt-hour above base payment rates for qualified Edison and PGE customers who go solar during the first year after the new rules kick in. Higher-income Edison customers will get an additional 4 cents per kilowatt-hour, and higher-income PGE customers will get just 2 cents.
But payback periods for low-income homes served by Edison and PGE will still be an estimated nine years — no shorter than for higher-income homes. That’s because lower-income homes pay lower electric rates to begin with, and thus have less room to save.
Low-income SDGE customers will see an estimated solar payback of 8.5 years, much longer than the six years projected for everyone else in the San Diego region.
Those numbers are a sore point for activists and companies focused on bringing clean energy to non-wealthy communities. In a written statement, the nonprofit solar installer Grid Alternatives said state officials are “gambling on a complicated incentive structure that uses a conservative estimate of project installation costs in order to achieve a targeted nine-year payback.”
“It remains to be seen whether this approach will truly achieve more environmental and economic justice,” the installer said.
In a last-minute change approved by the Public Utilities Commission, the higher payments to low-income homes won’t be available only to CARE and FERA customers. All homes on tribal lands and in communities considered “disadvantaged” will be eligible.
Activists applauded the change but said it wasn’t enough. Some had urged the commission to expand the higher payments to all households that earn 80% or less of area median income. But the agency declined to adopt that proposal, which Grid Alternatives criticized as “inconsistent with the [commission’s] own definition of environmental justice communities.”
Start with a home assessment to understand your home’s condition and eligibility.
If your roof needs renovations, it makes sense to replace it before installing solar panels to avoid having to remove and reinstall the panels at a later date. Make your roofing company aware that you will be installing solar panels and ask them if they will come back after they are installed to ensure the panels have not damaged the roof.
The direction and pitch of your roof are important. The amount of energy produced is impacted by how much sun the panels receive, so shadows, trees, other homes or buildings can impact your ability to maximize solar production. Google Project Sunroof is a tool that can address most of these concerns. This tool uses images from Google Earth and analyzes the roof shape to provide you with a personalized solar plan, taking local weather patterns into consideration. PVWatts is another tool from the National Renewable Energy Laboratory (NREL), which uses information you provide to help you determine if solar is right for you.
It is important to understand the regulations in your area (even down to whether the Homeowners Association has any guidelines surrounding the installation) and to know your electricity consumption (kWh) and rates.
Net Metering is an utility policy which allows consumers in some areas to receive a credit on their electricity bill by returning any unused solar electricity they generate back to the grid. Some states and service territories are compensating for excess electricity at rates lower than what a customer would typically pay for electricity. To maximize the financial benefits, it is recommended that the system is designed in accordance with your electricity usage to ensure optimal savings over time.
Buy or Lease? What is the best option for you?
The decision to buy or lease a solar system will depend on your finances, state laws and utility policies.
If you decide to buy a system, you:
- reap the benefits of the electricity produced;
- would be entitled to tax credits or other incentives;
- are responsible for system maintenance;
- can sell the system, if you move.
On the other hand, if you lease a system:
- the solar system company owns it and is responsible for its maintenance.
- You can enjoy cheaper electricity with very low or no upfront costs and monthly payments at agreed rates.
Before signing the lease, ask about your options in the event you decide to sell your property. Zillow has estimated that homes with solar panels sell for 4.1% more compared to homes that are not powered by solar power.[2]
Buying the solar panels directly could unlock additional dollars. First, if you purchase the system there are federal tax incentives through 2023. Your local area may have additional incentives in place to further reduce the cost of the system. Also, there are benefits through Renewable Energy Credits (RECs), that may be sold. The rates received from the RECs vary greatly by state so it is good idea to discuss with your solar provider on what those numbers are. Finally, there is also the electricity generated which will lower some or perhaps all of your electric bill depending on the month. Keep in mind that solar production will be dependent on the season so you should expect more production in the summer and less in the winter. The sum of these savings (tax incentives, RECs, and electricity generation) can be great. In 2016, Consumer Reports estimated that a New Jersey home which purchased a solar roof in cash could result in about 60,000 of savings over 20 years. If the family took out a loan for the entire project, there were still 20,000 in savings over the same 20 year period. [3]
If you lease solar panels, you generally pay the solar company a monthly rate and the solar company continues own the panels and provide maintenance. You can get the benefits of the electricity generation without the upfront cost. However, there are fewer direct financial benefits as customers in the leasing model do not have access to the RECs nor the tax credit and other state financial incentives. With that said, there are still benefits. In this case, Consumer Reports estimated the benefits from leasing to be at 25,000 in savings over 20 years.[4]
Questions to ask your solar provider when getting a proposal.
As with any large purchase, it pays to get multiple quotes. NREL recommends requesting multiple quotes. Remember that there is likely to have been someone else in your neighborhood that has installed solar on their home so check your neighborhood listserv for recommendations. As you obtain quotes from those solar providers, consider this list of questions to ask so that you can get a sense of their work quality and the financial benefit of the system.
- How many systems has the solar provider installed in the past year?
- What is the system size and total installation cost?
- How much electricity will the system generate over the course of a year and what will be the total approximate savings of the system?
- What upgrades does my home need? Would I need a new roof, updated wiring, clearing of trees updated utility interconnection?
- How will I be reimbursed for any excess electricity produced? Does my jurisdiction allow net metering?
- What does the warranty cover and who is responsible for maintenance and cleaning?
- Who is responsible for utility interconnection, permissions, and inspections?
- What happens if I decide to sell my home? What are the conditions for new occupant?
- Who should I contact if my system fails?
- What to do in the event of a blackout?
- If you are considering leasing as a model, consider:
- What is the length of the lease?
- What is the upfront cost and how much do I need to pay over time? The terms may be different depending on the provider so make sure to do the math on how it breaks out.
How to select a solar provider?
Once you have your quotes, it is important that you get the best deal and closely examine the underlying terms and conditions. Look for an installation company that is licensed, has credentials from a certified body, such as the North American Board of Certified Energy Practitioners, and is insured. A good solar provider will offer you a variety of panels and inverters adhering to your aesthetic requirements with appropriate performance warranties. Have them walk you through the options and think about how the panels will look on your home so that you are happy with the result. Keep the warranty in mind. String inverters typically carry a 10-year warranty while micro-inverters can go all the way up to 25 years. Solar panels usually carry a 20-year warranty.
Make sure to compare the average wait time, scheduling, and project completion times for different providers. Lastly, the best provider will be completely transparent about savings, associated assumptions, system monitoring, maintenance and all the estimated costs. The Solar Energy Industry Association’s (SEIA) National Solar Database includes a list of manufacturers and installers across the United States.[5]
Solar Share
Solar is a sustainable, emissions-free energy source that is an investment in your future, the environment and your community. Solar also can save you money on your energy bill when you install or select the right amount of solar for your home or business.
Upfront rooftop solar costs depend on what size system you need and your installer’s costs, and Solar Share costs depend on how much solar capacity you purchase.
Our Distributed Generation Rider allows customers to sell their excess solar generation back to Santee Cooper. The rider also provides a standby fee to cover fixed costs, such as maintenance of generation, transmission and distribution systems, that wouldn’t otherwise be fully collected from solar customers. The standby fee ensures those fixed costs are not shifted to non-solar customers.
- Residential Standby Fee: 4.40 X size of system (kW)
- Commercial Standby Fee: 4.70 X size of system (kW)
- Metering Fee: 5000.00
- Energy Credits (June-Sept.):
Distributed Generation Explained
Santee Cooper first offered distributed generation options to customers in 2010, when we launched a pilot rooftop solar program. Learn more about how we integrate distributed generation resources on the Santee Cooper power grid.
Solar can be a great investment. Before making a decision, do your homework, check from several sources, understand upfront and ongoing fees, and carefully consider what is right for you. As with all big-ticket purchases, beware of misleading sales tactics and scams.
.0416 per kilowatt hour returned
- Energy Credits (Oct May):
Frequently Asked Questions
The size of the system you choose will depend on a few factors, such as the amount of money you want to invest, the amount of electricity you want to produce, and the amount of space you have for installing solar panels. You should review your old electric bills to help determine how much electricity you business or home typically uses. Santee Cooper urges customers to size solar systems with the “offset” in mind. Below is a table comparing system size and “average” customer energy needs. For further assistance, a qualified Santee Cooper Solar Trade Ally or NABCEP Professional can help you determine what size system is right for your home/facility. For a list of qualified Santee Cooper Solar Trade Allies, please contact solar@santeecooper.com or (843) 946-5951.
This chart can give you an estimate of the size array you may need.
MEL users can find their average monthly usage under the Usage tab. All other customers can call us at 800-804-7424.
The type of maintenance that may be required of a system is dependent on the particular system you purchase. Please consult your solar installer and manufacturer to find out if any additional maintenance will be needed.
It depends on your system. Systems with battery backup will continue to have power. Systems without battery backup must shut down until the outage has been restored. Having electricity run into the grid from a solar electric system is a safety hazard for anyone working on the power lines.
Rebates are available for the solar electric portion of a system but not for the battery portion of the system. The rebate is based on the installed capacity (kW AC).
Financing options are available for Santee Cooper’s residential customers only. Santee Cooper also offers on-bill financing for qualifying residential customers through the Smart Energy Loan Program for Renewable Energy for up to 40,000. Learn more information about the loan program here.
If your building is not suitable for solar panels for any reason, participating in the Solar Share program may be a more viable option for you. Solar Share is a community solar program that allows Customers to subscribe to a portion of the energy generated by a Santee Cooper-sponsored community solar farm, without having to install a solar PV system at your home / facility. Customers subscribe to a certain number of blocks (measured in kW) to support the community solar farm, and receive a pro-rated share of the energy produced by the solar farm in the form of bill credits.
A REC represents the property rights to the environmental, social, and other non-power qualities of renewable energy generation. In exchange for rebates offered by the programs, Santee Cooper will retain the ownership of all RECs associated with customer installation of rooftop solar electric system and customer subscription through the Solar Share program.
Yes, applications for increasing the size of a system are subject to the Program Manual, rebate caps, Terms Conditions and other rebate program criteria in place at the time of acceptance of the rebate application. The total rebate per customer over the life of the program is capped at 6 kW.
All qualified Santee Cooper Trade Allies can assist in the rebate application process. Starting Dec. 1, 2019, only solar arrays that are installed by Santee Cooper Trade Allies will be eligible for program incentives.
Please check with your Homeowners Association or any Restrictive Covenants and Conditions first. If there are covenants and/or restrictions in your neighborhood regarding solar electric systems, and you are prohibited from installing a system, you will be ineligible to receive a rebate.
Solar Share – If you move out of Santee Cooper’s territory, Santee Cooper may buy back your solar subscription at a depreciated value, depending on the number of years you have held the subscription. Email solar@santeecooper.com for more information.
Solar Home – If you move out of Santee Cooper’s territory, the next homeowner will be required to sign an amended Interconnection Agreement and receive the credits outlined in the current DG Rider if the next homeowner is interested in retaining the PV system interconnected to Santee Cooper’s grid.
Solar Business – If you move out of Santee Cooper’s territory, the next Business owner will be required to sign an amended Interconnection Agreement and receive the credits outlined in the current DG Rider if the next business owner is interested in retaining the PV system interconnected to Santee Cooper’s grid.
No, the Interconnection Request Application and the Rebate Application are two separate components of the program. Rebate approval is contingent upon fulfilling all of the program requirements. Customers are eligible for rebates if they use a Santee Cooper Trade Ally.
The solar PV system rating must have a minimum rating of 1 kilowatt alternating current (“kW AC”) and must not exceed the lesser of 20 kW or the Customer’s annual peak electrical demand recorded over the past 12-month period from the date on which the Solar Home Application was signed.
.0384 per kilowatt hour returned
Commercial Solar Panel Rebates, Tax Credits and Other Incentives
The solar investment tax credit (ITC) is a federal initiative that incentivizes business owners for installing solar panels on their commercial properties.
The tax credit started at 30% for the total cost of solar photovoltaic (PV) systems installed in the current tax year. However, in December 2020, Congress passed an extension of the ITC, which would lower the tax credit over subsequent years. For system installations that were begun in 2020 through 2022, the credit is 26%; in 2023, it will decrease to 22%; and in 2024 and later, the credit will be 10%.
If you’re thinking of commercial solar installation for your own business properties, it pays to get those projects started as soon as possible. According to the US Department of Energy, a solar installation project is considered to be “started” if significant progress has been made in the installation, or if 5% of the total costs have already been paid out for work that is “integral” to the installation and services have been rendered within 3.5 months of payment.
Best Solar Companies By State
Residential vs. Commercial Solar Panels
Solar panels do the same thing for both residential and commercial applications—they absorb sunlight and transform it into clean energy. However, that is where their similarities likely end.
Due to the sheer size of some commercial properties, there are more ways and places to install panels. Since a commercial enterprise needs far more power than a typical residence, commercial panels will most often be larger and/or more powerful than those used in residential applications.
The average solar panel for a home will have 60 or 72 cells, while a commercial solar panel will have 96 cells or more.
THIS IS AN ADVERTISEMENT AND NOT EDITORIAL CONTENT. Please note that we do receive compensation for any products you buy or sign up to via this advertisement, and that compensation impacts the ranking and placement of any offers listed herein. We do not present information about every offer available. The information and savings numbers depicted above are for demonstration purposes only, and your results may vary.
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Best Commercial Solar Companies
Solar power is still an emerging energy source. Some commercial contractors do offer their services in all 50 states, while some FOCUS on particular regions of the country. The variety of options you will have may very well depend on the region where your commercial enterprise is located.
According to Solar Power World’s national ranking of solar contractors, here are the top 10 largest commercial solar companies in terms of the number of kilowatts they installed in 2021:
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THIS IS AN ADVERTISEMENT AND NOT EDITORIAL CONTENT. Please note that we do receive compensation for any products you buy or sign up to via this advertisement, and that compensation impacts the ranking and placement of any offers listed herein. We do not present information about every offer available. The information and savings numbers depicted above are for demonstration purposes only, and your results may vary.
Frequently Asked Questions (FAQs)
How are commercial solar panels installed?
Commercial solar panels are typically installed using heavy weights (ballasted racking) to secure them on flat roofs or with roof-penetrating hardware (attached racking) on sloping roofs. Given the size and the nature of these installations, trained professionals are required to put them in place.
How do you size a commercial solar system?
Though commercial solar systems are complicated to install, figuring out how large a system you need is actually not too difficult. To do it, multiply your business’s hourly energy needs by the number of hours of peak sunlight in your area. Then, divide that number by a panel’s wattage to determine how many total watts you’ll need for your commercial solar system.
How many solar panels do I need for commercial use?
Once you figure out how large your commercial solar system needs to be, you can divide the total wattage by the wattage of the individual panels. Depending on the size of these panels, this will determine how many of each you will need.
Is there a difference between commercial and residential solar panels?
Commercial and residential solar panels are similar in that they both absorb sunlight that is transformed into energy. However, like most commercial products and applications, everything is done on a larger scale than those for residences. Commercial panels will likely be larger/have more wattage than residential solar panels.
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