20-Year Grandfathering Period Recommended for California Solar Net Metering Customers

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CPUC Commissioner Michael Peevey proposes a 20-year grandfathering period for net metering customers in California. The proposal, which will be voted on by the end of March, is based on system life expectancy and standard lease terms.

 

Many questions remain to be answered about the shape of Net Metering 2.0 in California. And as with many issues in solar, what happens in that state could set the stage for net metering battles around the country.

We reported recently on a number of questions being taken up by the California Public Utilities Commission (CPUC) that will determine the course of the policy and what it might morph into.

 

We can expect action soon on one of those questions — grandfathering. When the current system changes, it’s important for existing customers to know that the net metering agreement they entered into before the change will continue.

 

Now, a proposal is on the table from CPUC Commissioner Michael Peevey. Late last Thursday, Peevey recommended that the grandfathering period be set at 20 years.

 

The recommendation is based in part on a conservative estimate of the life of a solar array — which can actually last much longer than 20 years. Another consideration was the standard 20-year term for solar financing agreements, such as leases. The grandfathering period was designed to ensure customers get a reasonable return on their investment.

 

Solar advocates had hoped for a 30-year grandfathering period, while utilities have lobbied for 10-15 years. Analysts were expecting a proposal between those two, so Peevey’s recommendation is not a surprise.

 

The cutoff date for customers to be grandfathered in is July 1, 2017 — or sooner if a customer is within a utility territory where rooftop solar generation exceeds 5% of peak demand. The proposed grandfathering period would start with the date when a solar array is plugged in.

 

Solar installations would be grandfathered for the full 20 years even if the property changes hands. Repairs and equipment upgrades would be allowed if they don’t expand generating capacity by more than 10% or 1 kilowatt.

 

The five-member commission is due to make a decision on the matter by March 31 but may vote on the measure as soon as March 27.

 

And then there are the other questions to decide — most important among those, What shape will Net Metering 2.0 take? We’ll have to wait till the end of 2015 for the answer to that one.