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Sunnova: Rainy Days Are Not Necessarily Bad - Implications Of The Proposed Bill On Rooftop Solar In California


  • Californian authorities have suggested to reduce subsidies for rooftop solar.
  • Although no final decision has yet been made, battery storage solutions might see an increase in demand as customers would try to circumvent negative consequences of the new rules.
  • Sunnova does not see its residential solar and energy storage business at (significant) risk, short-term growth could be hit though.
Orange und weiße Compliance-Bücher stehen auf orangefarbenem Hintergrund

atakan/iStock via Getty Images

On December 13, 2021, Californian regulators released a proposed decision. While this bill leaves, at first glance, major California utilities such as Pacific Gas & Electric Company (PCG) and Southern California Edison (SCE) as winners, rooftop solar owners and the solar industry

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Comments (7)

While a reduction of incentives over time is expected the current proposal goes to far and I think utilities are just trying to find a way to pay for all the fire lawsuits in solar fees since they aren't allowed to charge more to the general population from the lawsuits.
Key overreaches in the current proposal
-lower existing grandfather agreements for 5 years(changing new is ok but changing agreements made 5 or 10 years ago should be avoided)
-adds a charge for line maintenance for solar customers when we already have a separate line on our bills for this exact charge. If this needs to be adjusted up then it can be apart of the rate structure everyone pays instead of solar fee that's larger than some people's full bill.
-creates more complex laws with temporary credits and low income qualifications for both your regular bill and another for low income. Over complex regulations that give special rates to only companies that know how to work the system will probably get abused like the fire zone rebates. Keep it simple rates for all and low income programs separated from the base electric rates.
-rate structure for electricy gets reviewed every year or 2 as utilities need to do them and gets legaslative approvel and them trying to lock in steady increase to the amount of fees solar systems have over the next 10 years is not necessary and goes beyond normal industry checks as there will be another 2 nem updates and 7 rate changes in that time that can be adjusted with real data not hype.
Arenberg Equity Research profile picture
@Tommy-2 Thanks for your comment. Sounds like you are one of those California rooftop solar owners who would be affected. Have you already thought about any individual strategy for yourself of how to avoid these changes? (whatever they might look like in the end)
Clearly, the push to "Green" energy has consequences for existing infrastructure systems. Case in point, solar panels do take revenue away from the existing grid for maintenance and expansion. Higher fuel efficient cars and EVs take money away for highway expansion and maintenance. So, California now wants to impose a per mile tax on the miles driven to recover tax revenues lost by less gasoline usage. The EV cars still use the freeways and roadways and bridges but are not paying for that wear and tear. So you are helping to protect the environment but there is a charge for that. California is waging war on the conservationists.
The one thing that needs to be looked at is this so called federal tax credit. It reduces the need for solar panel companies to be price competitive. They always start their sales pitch with the "rebate' for solar panels. But, why not let them compete strictly on price? The Federal rebate should go back to the states to rebuild the grid infrastructure. BTW, no one has brought up the fact that with the increase in EV cars in California, the Utility Companies now have another source of revenue they never had before from all the charging being done versus filling up at the pump.
Solar will not be the answer that everyone wants due to climates being so diverse all over the world but it is another tool to get away from fossil fuels.
Arenberg Equity Research profile picture
@Bobbie B That's indeed a nice parallel. I agree with your comment, however, there is one point I am not sure if I understand it correctly. You state that "with the increase in EV cars in California, the Utility Companies now have another source of revenue they never had before from all the charging being done versus filling up at the pump".

I'd argue that this is not necessarily the case as EV owners might just go for full energy independence by buying not only the EV, but also the solar panels on the roof and a battery storage facility. This might accelerate with laws like the one discussed in the article appearing on the horizon (even if it is modified, the damage is made = trust in politics evaporates even further). If this is the case, no grid is required. I mean, yeah, there could be exceptions such as public EV charging stations or winter season with less sun, but is this enough to outweigh the overall decentralization trend?! It's sort of funny as decentralization makes the grid less and more important at the same time. It's a dilemma. The old world is moved upside down.
@Arenberg Equity Research You make a very good point. The people who are in the upper income bracket would definitely afford to acquire solar panels, batteries and EV. But I think they are in the minority of people. As EV become more affordable, more middle class people will be owners and needs to charge up in the local charging stations. But, no doubt the dependence on the grid is growing from activities like charging EVs. Solar panels have limited markets.
DonPaul Olshove profile picture
So first they entice you to part with a hard-earned $20,000+ with the promise of low electric rates for decades to come. Then they pull it back saying "Sorry! We lied. You must give to the poor people instead. You're rich. You can afford it."

Charlie Brown and the football...

You can't trust Newsom's California. Got to get out.
Craig69 profile picture
@DonPaul Olshove
"No man's Life, Liberty or Property are safe when the Ca Legislature is in session".
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