San Diego Utility Tax for Solar – What Gives?

If you live in San Diego, you may have caught wind of a new proposal threatening the renewable energies market. Proposed by San Diego Gas & Electric (SDG&E), a new rooftop solar tariff could raise expenses for consumers as well as make local changes regarding climate change more difficult. Here, we look closer at this proposal and what it means for San Diego residents.

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About the Proposed Tariff

Currently, California utility regulators provide a “net metering” tariff to solar consumers. That means they receive a bill credit for the amount of solar energy produced. Today, this bill credit is at the full retail electricity rate.

However, SDG&E argues that this is unfair to non-solar customers who have to pay for utility programs and infrastructure to the grid. Instead, they’re suggesting that solar customers pay a $21 fixed access fee (since they’re also connected to the grid).

Another proposed option is that solar customers would pay a regular utility bill and then sell back their solar energy at a rate of 11 cents per kilowatt hour.

In addition, it’s suggested that solar customers pay the currently waived $280 interconnection fee when setting up their system. Charges based on peak periodic energy use have also been proposed.

Should this go into effect, there is good news for current solar customers. As the San Diego Union Tribune reports, current solar customers would be grandfathered in and would continue to receive the full retail credit of their energy for the first 20 years of service.

Concerns of this Proposal

Consider that many solar customers produce more energy than they need, and that energy goes back into the grid, allowing them to eliminate their energy bills almost completely. Many people fear that charging fees like this would discourage solar use and effectively reduce solar growth.

However, it’s speculated that discouraging solar power may be the main motive. Solar companies such as SolarCity and Sunrun have accused utility companies like this of trying to minimize the competition by killing off the solar industry with high fees. One might be suspicious considering SDG&E had the highest rate of solar deployment of all of California’s major utilities. This includes both household customers and larger institutions and businesses.

If proposals like this did go through and damaged the solar industry, it could reduce California residents’ cost savings as well as cause numerous people to lose their jobs. In an area where solar power is a very viable and cost-effective option, there are currently 54,700 people employed in solar in the state, but if fewer people are adopting solar power, it’s not just a compromise to the environment, but it threatens the economy as well.

Will it Go Into Effect?

It’s important to note that this tariff is only in the proposal stage. As of now, legislators, consumers, utility companies, and environmental groups are still debating the issue, and it’s likely to take months to reach a decision.

Other groups have also placed proposals, such as the California Solar Energy Industries Association, which proposed extending the current solar tariff to at least 2019. They suggested this because several tax credits that help offset the cost of solar installation will be expiring soon, and maintaining the current tariff would help the industry endure through these changes.

The city has expressed an interest in maintaining cost-effective solar options for customers throughout San Diego. The city also plans to integrate more solar solutions to offset the city government’s energy demands. Whether this proposed tariff goes into effect has yet to be seen.

What do you think about this proposed solar tariff? Do you think it’s fair, or would it do more harm than good?

2017-06-07T22:31:22+00:00 Industry News|