The California Public Utilities Commission (CPUC) on Thursday approved the continuation of the state’s net metering program until 2019. The ruling allows homeowners with rooftop solar installations to continue selling surplus electricity to their utility company at full retail rates.
This is a victory for solar energy advocates and companies, and a perhaps temporary defeat for utility companies that want the net metering rate to be reduced to the wholesale rate and to charge homeowners for maintaining the power grid.
Shares of SolarCity Corp. (NYSE: SCTY) jumped 8.5% on Thursday to close at $35.62 and traded up another 2.7% early Friday at around $36.58 on the news. SolarCity pulled out of Nevada’s solar market in December when that state’s public utilities commission adopted a change to the net metering program that would have cost homeowners with solar installations to pay regardless of when their panels were installed. NV Energy, the state’s largest utility, said earlier this week that it supports grandfathering installations for up to 20 years.
In a statement issued Thursday, SolarCity CEO Lyndon Rive said:
Since December we have seen a paradigm shift on the world’s approach to electricity, with the Paris climate agreement, extension of the federal Investment Tax Credit, and now a decision from California that will continue the successful net metering policy while ensuring rooftop solar users begin to provide valuable services to the grid. This new paradigm is one in which our most important goal is to deploy renewable energy as fast as possible. SolarCity looks forward to working with everyone to exceed the world’s expectations on how fast we can do it.
Shares of Sunrun Inc. (NASDAQ: RUN) jumped nearly 21% on Thursday to close at $10.05. Senior vice-president Bryan Miller said in a statement:
Sunrun commends the Commission for upholding net metering and protecting solar choice for Californians. While today’s decision is a compromise that will require the solar industry to adapt, it rejects the utilities’ anti-solar proposals and continues California’s renewable energy leadership.
Shares of Vivint Solar Inc. (NYSE: VSLR) rose about 3.6% following the CPUC’s announcement to close at $8.33 on Thursday. Vivint is still in the process of being acquired by SunEdison Inc. (NYSE: SUNE) for around $2.2 billion. That offer totaled $16.50 per Vivint share in cash and stock in both SunEdison and its TerraForm Power Inc. (NASDAQ: TERP) yieldco. The Wall Street Journal reported in early December that the offer had been adjusted, but at Thursday’s share price, Vivint is still pretty costly.
Under the new California rule, solar customers will pay a new fee of between $75 and $150 to connect a system to the grid and will be required to move to time-based utility rates, which means they’ll pay more for power during peak hours. Additional fees of about $6 a month also have been added for some utility programs.