Booming rooftop solar installations in California are bringing an unwelcome surprise to the homes and businesses that don┬┤t have the devices: an extra $1.3 billion added to their annual bills.
Power companies in the biggest solar state are required to buy electricity from home solar generators at the same price they resell it to other customers, meaning utilities earn nothing to cover their fixed costs. The rules are short-sighted because eventually rates must be raised to make up the difference, according to Southern California Edison, which has joined with competitors to estimate potential losses.
As more homes and warehouses get covered in solar panels, higher rates imposed on traditional consumers risk a growing conflict between renewable-energy advocates and power companies that foresee a backlash in California and 42 other states with similar policies. The tension has also emerged in countries including Spain and Germany, where solar investments are curbing investment in the power grid.