California dealt a major blow to renewable energy, some companies say

California has long championed renewable energy, but a change in state policy last year led to a sharp decline in rooftop solar installation thousands of businesses - including installers, manufacturers and distributors - are reeling from the new policy, which took effect in April and significantly reducing incentives that encouraged homeowners to install solar panels. Since that change, sales of rooftop solar installations in California have fallen as much as 85% in some months of 2023 compared to the previous year, according to a report from Ohm Analytics, a research firm that tracks the solar energy market. Industry groups predict installations in the state will drop more than 40% this year and continue to decline through 2028.

"Solar installations are declining "Michael said. Wara, senior fellow at the Stanford Woods Institute for the Environment. "What's happening now is a painful adjustment process."

Construct Sun, a solar installation company based in Reno, Nevada, has ceased operations in California after its sales dried up four months after the start of the policy; Executives said the company was now focusing its efforts on Florida, North Carolina and Ohio.

“I had a very dismal pipeline and I had to make the decision to close in California. said Thomas Devine, Construct Sun executive vice president of operations. He said the state's rooftop policies are undermining its goal of effectively eliminating greenhouse gas emissions by 2045. “These competing policies are crazy,” he said.

State officials chafe They argued that California was undercutting renewable energy and defended the policy change, which reduced 75 percent the value of the credits that owners of new installations receive for the electricity they send to the grid. They argued that the old rules, which still apply to systems installed before April, offered too generous a subsidy, mainly helping well-off homeowners. As a result, low-income people who couldn't afford panels found themselves shouldering more of the cost of maintaining the state's electricity system.

“California has done more for the solar industry than any other state in the country by offering billions in rebates and incentives since 2006,” the California Public Utilities Commission said in a statement. State, which oversees rooftop solar and investor-owned utilities.

States across the country are grappling with how to compensate consumers for the electricity that their rooftop solar systems send to the grid. And officials have often looked to California for guidance.

Many states, including California before it changed its policy, generally allow owners to receive credits that are roughly equivalent to the retail price of electricity. rate for the energy their systems send to the grid. That has never sat well with most utility companies, who argue that offering homeowners a one-for-one credit for solar power overestimates the value of that electricity. Utilities say they could buy electricity at a much lower price on the wholesale market or by generating it themselves.

Overall , renewable energy is growing and now provides more than a fifth of renewable energy. of the country's electricity. In California, renewable sources produce more than a third of electricity.

But growing carbon-free sources has become difficult as regulators, utilities Public authorities, consumers and renewable energy companies are arguing. its financial advantages. They are also trying to find ways to add not only equipment that can produce electricity, but also batteries that can store it, since solar and wind power are intermittent.

Note from California officials. that even by reducing compensation for rooftop solar, they gave residents more incentives to install batteries. Batteries, they say, can help provide energy to the grid…