COVID-19 – WHAT DOES IT MEAN FOR SOLAR?
The Coronavirus pandemic has affected the entire world. It has shut down sports leagues, canceled events, and has millions of people sheltering-in-place. Everyone is feeling it, and it has devastated the economy. It has also changed the way that we use energy, and there could be ramifications for years to come.
During certain times a year in California, there is already a discrepancy between how much energy we produce and how much energy we need. When there is too much solar energy on the grid, the grid operator has to curtail solar production or send it to other states at rock-bottom prices. This is neither efficient nor economical, and the utility companies have used this as evidence in their argument against net metering, the process by which homeowners and businesses are compensated for the excess power that they generate from their onsite solar energy system.
Most non-essential businesses in California are currently closed, which has reduced demand for electricity by five to eight percent. This dynamic is magnified by the fact that we are in the middle of the peak generation period for solar. The sun is shining, and California is generating more solar power than ever, but who is going to use it?
This is an especially critical time for solar. In June, the California Public Utilities Commission is expected to start talks with the state’s utility companies to develop the next net metering program, NEM 3.0. This third version of net metering is likely to be far less favorable to homeowners and businesses from a financial perspective than the previous two, and this pandemic is providing the utility companies with plenty of ammunition to make that happen. When the pandemic is over, it is unlikely that things go back to the way they were. More people will work from home, more students will learn online, and there will be many other aspects of sheltering-in-place that will remain. This will all be considered when the new net metering program is released.
The good news is that NEM 3.0 won’t be implemented until the end of 2021 at the earliest. Homeowners and businesses can go solar now and be grandfathered in under the existing rules. When the changes do come, the solar industry will evolve. The technology is improving and the costs are coming down. Regardless of what the utilities do, solar will always be the best option.
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