US Climate Law Means California Can Cut Solar Perk, Group Says

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The landmark climate legislation signed this week adds a potential wrinkle to a fight over a California incentive that made rooftop solar flourish in state.

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(Bloomberg) — A utility-backed coalition in California has a new argument to slash incentives for rooftop-solar systems in the Golden State: The renewable sector, it says, doesn’t need the subsidy to grow because of support in the new federal climate bill.

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“With more generous federal subsidies flowing to the solar industry, it is now indefensible for renters and low-income Californians to continue to pay higher electricity bills simply to pad the projected profits of publicly traded rooftop-solar companies,” said Kathy Fairbanks, a spokeswoman with Affordable Clean Energy for All, in a statement Thursday. The group also includes electrical labor unions, business and community groups.

Read More: California Seeks More Time to Overhaul Rooftop-Solar Subsidy

The landmark climate legislation, signed into law by President Joe Biden this week, adds a new potential wrinkle to a fight over a California incentive that helped mainstream rooftop solar in the state. The so-called Inflation Reduction Act ensures years-long tax credits for home solar and batteries. The rooftop-solar industry contends that those federal benefits would be canceled out if California adopts a plan proposed by a regulator to cut the existing state-level incentives that haven driven growth in the industry.

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An initial proposal by the California Public Utilities Commission would reduce rooftop incentives by as much as 80%—and required a new monthly fee for residents who install solar. The utilities generally back this proposal. Wood Mackenzie, a research firm, said that plan would have cut that market in half by 2024.

“In California—which drives the rooftop-solar market nationwide—all of that promise will be lost if the CPUC makes rooftop solar too expensive for regular consumers,” said Bernadette Del Chiaro, executive director of the California Solar & Storage Association, in an email Friday.



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