It seemed like a good idea at the time. But sometimes the best of intentions carry unintended consequences.A case in point is the California rooftop solar market that benefits from abundant sunshine and equally insatiable demand for high-end EVs like Teslas and Porsches.What could go wrong?According to the report from the California Public Utilities Commission (CPUC) taxpayers in the Golden State — those without subsidies for rooftop solar installations — are on the hook for USD$8.5 billion annually in higher electricity costs by the end of this year..That’s because the CPUC in 2022 reformed a policy that allowed customers with rooftop panels to be credited for expenses power their home systems generated at or near the full retail rate.The new policy lowered that amount which in turn made rooftop solar less attractive. Environmental groups said it cost as many as 17,000 jobs and has resulted in the bankruptcies of several high-profile panel providers.But those who joined the program prior to 2022 — early adopters like movie stars and celebrities — still benefit from what many consider as overly generous incentives..That means those without solar panels are picking up the tab for their neighbour’s fixed costs, including grid maintenance, while they’re the ones enjoying lower power bills.That means those who don’t have solar will be paying $8.5 billion in so-called ‘net metering costs’ by the end of this year, or nearly three times the $3.4 billion they paid in 2021, according to the report.It all points to structural problems in the largest rooftop solar market in the US — and the world — that has resulted in the bankruptcies of several high profile providers.Earlier this month one of the largest solar providers in the Lower 48, SunPower Corp., unexpectedly went belly up partly as a result of the California restructuring. California is hands down the largest solar market in the US.SunPower, which was founded as a Silicon Valley startup in the mid-1980s, said in court papers that it’s carrying about $2 billion in long-term debt and has been struggling since October to avoid potential defaults under various financing arrangements. Shareholders in the firm include France’s TotalEnergies SE..As recently as 2022 it hoped to cash in on lavish handouts under the Biden administration’s Inflation Reduction Act that have failed to materialize.It also blamed high interest rates and collapsing demand from the state’s regulatory changes.“SunPower has faced a severe liquidity crisis caused by a sharp decline in demand in the solar market and SunPower’s inability to obtain new capital,” Matthew Henry, the company’s chief transformation officer, wrote in a bankruptcy filing.It follows Titan Solar, which shut its doors in June. Harness Power shut its doors last spring leaving customers with unfinished or nonfunctioning solar systems. More than 100 solar dealers and installers declared bankruptcy last year alone and the crisis is only expected to get worse.“The outright collapse of many once fast-growing solar firms provides a sobering case study on the potential unintended consequences of incentive transitions," solar analyst Ara Agopian wrote in a report.at last count, California had about 47 gigawatts of roof top solar panels installed, or a quarter of its total generating capacity capable of powering 14 million homes.
It seemed like a good idea at the time. But sometimes the best of intentions carry unintended consequences.A case in point is the California rooftop solar market that benefits from abundant sunshine and equally insatiable demand for high-end EVs like Teslas and Porsches.What could go wrong?According to the report from the California Public Utilities Commission (CPUC) taxpayers in the Golden State — those without subsidies for rooftop solar installations — are on the hook for USD$8.5 billion annually in higher electricity costs by the end of this year..That’s because the CPUC in 2022 reformed a policy that allowed customers with rooftop panels to be credited for expenses power their home systems generated at or near the full retail rate.The new policy lowered that amount which in turn made rooftop solar less attractive. Environmental groups said it cost as many as 17,000 jobs and has resulted in the bankruptcies of several high-profile panel providers.But those who joined the program prior to 2022 — early adopters like movie stars and celebrities — still benefit from what many consider as overly generous incentives..That means those without solar panels are picking up the tab for their neighbour’s fixed costs, including grid maintenance, while they’re the ones enjoying lower power bills.That means those who don’t have solar will be paying $8.5 billion in so-called ‘net metering costs’ by the end of this year, or nearly three times the $3.4 billion they paid in 2021, according to the report.It all points to structural problems in the largest rooftop solar market in the US — and the world — that has resulted in the bankruptcies of several high profile providers.Earlier this month one of the largest solar providers in the Lower 48, SunPower Corp., unexpectedly went belly up partly as a result of the California restructuring. California is hands down the largest solar market in the US.SunPower, which was founded as a Silicon Valley startup in the mid-1980s, said in court papers that it’s carrying about $2 billion in long-term debt and has been struggling since October to avoid potential defaults under various financing arrangements. Shareholders in the firm include France’s TotalEnergies SE..As recently as 2022 it hoped to cash in on lavish handouts under the Biden administration’s Inflation Reduction Act that have failed to materialize.It also blamed high interest rates and collapsing demand from the state’s regulatory changes.“SunPower has faced a severe liquidity crisis caused by a sharp decline in demand in the solar market and SunPower’s inability to obtain new capital,” Matthew Henry, the company’s chief transformation officer, wrote in a bankruptcy filing.It follows Titan Solar, which shut its doors in June. Harness Power shut its doors last spring leaving customers with unfinished or nonfunctioning solar systems. More than 100 solar dealers and installers declared bankruptcy last year alone and the crisis is only expected to get worse.“The outright collapse of many once fast-growing solar firms provides a sobering case study on the potential unintended consequences of incentive transitions," solar analyst Ara Agopian wrote in a report.at last count, California had about 47 gigawatts of roof top solar panels installed, or a quarter of its total generating capacity capable of powering 14 million homes.
