Anyone have a sense about what is happening here? - Justin
There’s a battle brewing in California regarding “net metering”. In brief, net metering is the construct that allows homes equipped with solar panels to sell energy into the grid. Net metering is bread and butter for SolarCity, and, by extension, SEDG (SEDG’s claim to fame is its vendor status with SolarCity).
Here’s an article that provides the main points:
http://tinyurl.com/pkcftaz
California Utilities Release New Plans to Replace Net Metering: Conflict to Come?
California’s two biggest utilities have just fired the first shots in a battle over the state’s net metering future by proposing a system that would pay future solar-equipped customers less for the green electricity they feed back to the grid, as well as imposing monthly charges for the utility power they consume.
It’s a big deal for SolarCity/SEDG. SolarCity installs rooftop solar systems under power purchase agreements. That is, the homeowner doesn’t own the system, SolarCity does. SolarCity offered its agreements assuming a certain rate of return from the utilities. Eliminating net metering would throw a monkey wrench into the established order.
For reference, when Arizona eliminated net metering, rooftop solar installations dropped by 90%. On the other hand, more and more states are adopting net-metering plans, so it’s anyone’s guess how all this will play out.
I’m not a big fan of SolarCity’s business model. BUT, I believe the solar sector has achieved critical mass in that the industry employs more people than California’s utility industry, and many more employees than the coal industry. Battles will rage, large sums of money will be doled out to legislators, homeowners will have their say. In the end, solar will prevail and grow. As for SolarCity and its vendors? I dunno.