The rules of solar are changing in California, and property owners that wait to go solar in the future will not receive the favorable conditions of today. The billing arrangement that provides solar owners full retail credit for the energy they put on the grid, called net energy metering, is ending. Industry experts suggest that homes and businesses that wait until the peak summer months to install a solar power system will likely miss their chance.
“The upcoming changes for solar producers will undoubtedly create an unprecedented demand,” said Daniel Sullivan, founder and president of locally-based Sullivan Solar Power, whose clientele includes UC San Diego, the Port of San Diego and San Diego State University. “Property owners that wait until June to sign up to go solar may miss their chance to receive the full retail credit that current solar producers receive.”
Net energy metering will end once a certain amount of solar is installed in each utility territory, and San Diego Gas and Electric (SDG&E) will be the first utility to reach its cap. Anyone that installs solar before the cap is hit will receive full retail credit for energy they produce, and will be grandfathered in for 20-years. Once net metering ends, new homes and businesses that install solar will receive less credit for the energy they produce.
“The period for going solar under the current net metering rules could end for SDG&E customers by December or even earlier, depending on how many people install solar this year,” said Bernadette Del Chiaro, executive director of the California Solar Energy Industries Association (CALSEIA).
In order for property owners to get grandfathered in to current rules, the projects must be installed. A signed contract will not reserve a property’s space in the queue. Under normal market conditions, it takes an average of 120 days for a project to be delivered from the time paperwork is signed to installation completion. The solar industry is anticipating a bottleneck for installations, city permitting, and utility inspections.
“We are informing all San Diego property owners that are interested in going solar that they need to sign up by May in order to receive the current favorable rules and grandfathering protections,” said Sullivan, who has been providing solar to the region for a decade, “September is when there’s the greatest demand for solar, but it is unlikely that people who wait until then will be installed before the rules change.”
In addition to the local changes, solar policy is going to become less favorable on a national level as well. The tax credit, which covers 30 percent of a solar project, is currently the largest incentive available for property owners that invest in solar. The federal tax credit for solar is ending in 2016 for residential properties, and will be reduced to 10 percent for commercial property owners.
“Given changes that will be coming next year and favorable conditions right now, there has never been a better time to go solar,” said Del Chiaro.