For years California has led the nation in rooftop solar energy installation, in large measure because California’s Net Metering law. This guarantees that building owners with photovoltaic solar systems can sell electricity back to their utilities at the same rates that the utilities sell to them, and that they can sell the utilities as much in a year as they buy, but no more.

This Law had one Achilles heel, it capped the number of customers who could use net metering to just 2.5 of the total utility customers. Years ago, when there were just a few thousands of solar power systems, 2.5% must have seemed like a large number. Now that number is too small. California’s (and the nations) largest Utility, Pacific Gas and Electric, was getting very close to the 2.5 cap. PG&E even took the bold step of announcing that they would honor the law up to 3.5%, just to maintaining the momentum of solar installations in Northern California. The solar boom in California was in great danger, because many new projects would not be built without net metering.

That danger is now passing because of the determined efforts of Assemblywoman Nancy Skinner of Berkeley, California. She sponsored, fought for and ultimately passed AB 510 – which raises the cap to 5%, and opens the door for years of continued expansion for Solar Power in California. The bill passed with an overwhelming majority in the state Assembly, after an earlier version of the bill (AB 560) failed to pass. The original version was set to lift the net metering credit cap from the current rate of two and a half percent to ten percent.

AB 510 sets the new rate at five percent - half of what proponents originally wanted, but a rate that the Assembly can agree on. It has already passed the Senate, and Governor Arnold Schwarzenegger has signed the bill into law.


The new law was vital because the amount of power contributed is going to exceed the original cap in relatively short order. Solar advocacy groups estimate that parts of California may receive enough applications to hit the two and a half percent cap in just a few months. Almost fifty thousand homeowners and several hundred businesses currently rely on the net metering program to reduce their electric bills. Net metering also means green jobs locally - an important part of California's new energy economy. A low cap constrains growth to a low level.

Consumers will now be able to get twice as much credit for the power they already contribute. People who've been debating installing that solar panel system or wind turbine might find that this is just the boost they needed to make the decision. This credit can help offset their energy usage when their green energy systems aren't producing enough to meet their demands.

A huge part of the appeal of switching to solar or wind energy is the ability to offset power bills by earning credit for the power that's generated. Many homeowners and businesses invest in solar to reduce their electricity costs in the long run. Without laws that require energy companies to provide this credit, consumers who go green would be on their own. Is this the right time for you to invest in a green energy system ? With the increase in net metering credit, it might be!

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