Utilities to Pay for Solar Generation

Gary Fairhead
Dec 2010

California passed a law in 2010 that will require Public Utilities to pay for excess solar generation. The bill, AB 920, sponsored by Jared Huffman (D-San Rafael), was signed into law by Governor Arnold Schwarzenegger.

Currently, if you generate more electricity than you use in a year, the excess simply goes to the Utility for free. This bill is the equivalent of a feed in tariff. However, briefly reading through the bill, we didn’t see at what rate the electricity would be reimbursed. It may end up being a feed in tariff that doesn’t have much value.

Pacific Gas and Electric, (PGE) is claiming that the electricity will be paid for by people who don’t have the resources to purchase solar for themselves. This is just ridiculous. If you look at the tiered rate schedule, people with larger homes and pools pay a substantial percentage more for their electricity, and in some cases are being crushed by the size of their electric bills. For these people, who are already subsidizing the solar rebates, it makes sense to buy solar. The only reason a person with resources or not would generate more energy than they need would be because the feed in tariff makes good economic sense.