Pacific Gas and Electric Co. has agreed to use more electricity from home solar systems than California law requires, the company and Gov. Arnold Schwarzenegger announced Tuesday.
The agreement addresses a key concern of the state's growing solar energy industry. It also buys time for Sacramento to settle some unfinished business from the last legislative session.
California law allows homes and businesses with solar systems to get credit for excess energy that they deliver to the state's electrical grid, under a system known as net metering. More than 52,700 buildings throughout the state sport solar panels.
But the law limits the amount of electricity that the utilities are required to take from such customers. Each utility must accept up to 2.5 percent of its total peak electricity load from net-metering customers. PG&E, based in San Francisco, expects to hit that limit in 2011.
A bill to raise the cap to 5 percent stalled in the waning days of the last legislative session. Because of their failure, solar companies feared their sales would suffer as a result, because potential customers would no longer have as much financial incentive to install solar systems.
So PG&E, after discussions with the Republican governor, has agreed to accept as much as 3.5 percent of its total load from net metering customers. The change will require the approval of the California Public Utilities Commission.
"We believe this cap will ensure that investment in solar is not slowed by any concern with the cap and would allow us a sufficient amount of time to work with the governor and others on the broader issues related to net metering, including any cost shifts that place a greater burden on non-participating customers," PG&E Chief Executive Officer Peter Darbee said Tuesday in a prepared statement.
Debate over changing the cap is not over.
Schwarzenegger on Tuesday said he wanted to do away with the limit altogether. But California's major utilities this year opposed raising the cap as high as 10 percent until the full costs and benefits could be studied by state regulators. They argued that the state already provides financial incentives for homeowners to go solar, and adding more incentives might be unfair to customers who can't afford solar systems.
"I commit to introduce legislation that will permanently eliminate all caps on net metering in California so there are no arbitrary limits on the amount of solar we can install, the number of jobs we can create and the amount of energy we can save," Schwarzenegger said in a prepared statement.
