Could PG&E's New Rate Structure Stall California Solar Market?

A new rate plan introduced by Pacific Gas & Electric could hurt the California solar market, solar advocates say. PG&E, the nation’s most solar-powered utility, is planning to simplify its five-tiered rate structure by downsizing it to a three-tiered plan. Most residents would see their electricity bills rise, except for the highest energy users, who would see their rates drop by almost 40 percent. california solar powerTherein lies the problem for concerned solar proponents. The current five-tiered structure is designed to promote energy conservation by penalizing the highest energy consumers whom currently pay up to 50 cents per kilowatt-hour. These high rates have been a big driver of the solar industry in California. For example, Bill Schrader, owner of a 5,200-square-foot house in Alamo, reduced his monthly electric bill from $450 to an average of $45 per month. Schrader was definitely motivated by his standing in PG&E’s top rate tier. There are growing fears that people like Schrader won’t be motivated to go solar under the new plan. According to The Oakland Tribune, households that use 1,500 kWh per month would see their bills drop from $480.08 to $371.46. That’s about $108.62 per month. Meanwhile, PG&E customers who use 550 kWh per month would see an increase of $10.73 (from $77.40 to $88.13). PG&E simply claims that it is responding to a number of complaints about its inequitable rate structure and exorbitantly high rates for high energy users. The utility has asked state regulators to rule on the proposal by the end of the year and, if they comply, the new rate structure would go into effect in May 2011. PG&E territory alone houses 40 percent of residential solar power in the nation, and there is little doubt that the utility’s current rate structure played a large part in that success, in addition to federal and state rebates, of course. So the question now is whether the new structure, if approved, will truly stall California’s solar market. David Hochschild, Vice President for Fremont solar manufacturer Solaria, believes that the new structure would be like having “one foot on the gas and one foot on the brake at the same time.” Others urge Californians not to panic just yet. Adam Browning, Executive Director of the Vote Solar Initiative, pointed out that while the new structure lowers the top tier, it expands the middle tier, which could promote solar power on a new level. He also pointed out that nothing is set in stone. Now that PG&E has proposed their plan, the public has a chance to weigh in. He adds that, “What we don’t want is for people to freeze in their tracks.” Source: The Oakland Tribune

Posted on April 9 in Solar News by .

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