Mar 02 - San Jose Mercury News



California's solar industry is celebrating a ray of good news: the cap on so-called "net metering," which allows homes and businesses to earn credit for any excess solar power they generate, has been doubled.

Currently, utilities give net metered customers a credit on their monthly bill if they generate more solar power than they use. The credit can be used to offset higher energy consumption at other times of the year, like the darker winter months. At the end of the year, any leftover credits are zeroed out.

State law had required California's three largest utilities, including PG&E, to credit customers for renewable power they send to the grid, but limited the program to 2.5 percent of a utility's peak demand. That meant that as soon as a utility got 2.5 percent of its electricity from solar customers, they would no longer be required to sign new contracts.

On Friday, Gov. Arnold Schwarzenegger signed legislation that doubles that cap to five percent, a move widely supported by the solar industry and statewide environmental groups.

 "It really sends a long-term signal to solar companies that California is open for business tomorrow and for years to come," said Sara Birmingham, director of Western policy for the Solar Alliance, the chief sponsor of the legislation.

Indeed, many solar industry executives say the raising of the cap takes away much of the uncertainty that was hampering the market.

"The fear that people

had was that we were coming up on hitting 2.5 percent in PG&E territory," said David Kaltsas of SunWize, a solar installer in San Jose that is so busy it has a dozen job openings. "Now I can hire people without having to worry about what's going to happen when we hit 2.5 percent. It helps us create jobs."

In California, over 50,000 customers, including homeowners, businesses, schools, and cities, participate in net metering, collectively generating over 500 megawatts of power. One megawatt of electricity is enough to power 750 to 1,000 homes. The bulk of the state's net metered customers are within PG&E's territory in northern California.

PG&E ultimately sponsored the legislation but has expressed concerns that net metering effectively subsidizes solar customers, who tend to be more affluent, at the expense of other ratepayers.

"Longer-term policy discussions must address the cost shifts that place a greater burden on non-participating customers," said PG&E spokesperson Cindy Pollard.

Contact Dana Hull at 408-920-2706.

Net Metering in PG&E Territory

PG&E leads the nation in the number of solar installations in its northern California service area. As of January 30, more than 37,000 retail net metering customers produced a total of nearly 309 megawatts of clean, renewable energy. PG&E is currently at roughly 1.5 percent of its peak demand from net metering customers. The utility estimates that it would have reached the 2.5 percent cap sometime in late 2011. On Friday, Gov. Arnold Schwarzenegger signed Assembly Bill 510, which raises the net metering cap to five percent.

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