Sundown on PG&E's Solar Subsidy?

By Aria Pearson Sentinel correspondent(Solar Energy News) California's landmark efforts to increase solar power, supported by environmentalists, state leaders and the governor, could be in peril.



In the next few months, PG&E, the largest utility company in the state, will reach the cap on how much solar energy it will buy back from customers. If the Legislature fails to pass a new bill raising that cap, new solar users in PG&E's territory won't be eligible for the benefits currents users enjoy, which some fear could bring the rise of solar energy in California to a grinding halt.



"It will destroy the industry," said Ken Adelman, a retired high-tech exec and resident of Corralitos who has the largest residential solar power system in the state.

The California Solar Initiative, a top environmental goal of Gov. Arnold Schwarzenegger, was approved in January by the California Public Utilities Commission as a way to bolster the growing solar industry. It allocates $2.8 billion in incentives for solar projects of all sizes over the next 11 years. The objective is to bring 3,000 megawatts of solar energy online, enough to power about 3 million homes.



Many experts say the goals are feasible under current law, which allows individuals and businesses with solar power systems, called photovoltaics, to connect to PG&E's grid and sell back any extra power they generate.



The process is called net metering. The solar power system is fitted with a meter that runs forward and backward. During the middle of the day, when the sun is shining, the solar panels often produce more energy than the customer can use, and the meter runs backward. Then, at night, when the panels are not generating any electricity, the customer takes energy from the grid and the meter runs forward.



At the end of the year, the customer gets one bill, with all the debits and credits tallied up. Though the law says the bill can never end up in the negative, with PG&E owing the customer money, it can equal zero, making solar panels cost effective over time.



But as a compromise to the utility companies, the law also has a cap. When enough photovoltaic systems have been installed that the total capacity reaches 0.5 percent of each utility company's peak demand, then the utilities no longer have to provide net metering to people or businesses who install new systems...read more