The future of Solar Power for Businesses
Monday, August 31, 2015
by: Kevin Weinberg, Baker Electric

Section: Leadership Spotlight

The State of California has incentivized solar power installations for more than a decade, helping to reduce the cost of solar for consumers more than 50% since 2006. The federal government still provides a generous 30% federal tax credit and accelerated depreciation (MACRS) for renewable energy assets. These two factors alone can decrease the cost of owning solar by almost 70%. What changes do we expect in the next few years?

Changes to Net Energy Metering (NEM)

Currently under Net Energy Metering (NEM) public utility customers (SDG&E, SCE, and PG&E) are credited at the same rate they otherwise would consume the energy, at the time you produce power.  In January 2014, AB 327 passed which requires a new NEM (2.0) tariff by the end of 2015. NEM 2.0 will change the equation, currently, for the worse for consumers.  The tariff has not yet officially been released, but the solar industry expects a fight to protect consumers from aggressive changes to the NEM policy.

Increased electricity rates

Specifically in SDG&E territory, many customers are already being switched over from their small commercial rates (A) to a Time of Use rate (ALTOU) with ‘demand’ charges.  In many cases this increases customer’s bills by 60-80%+.  This is in additional to continued rate increases expected from the public utilities.

Tax credit reduction for businesses

The 30% tax credit for commercial solar customers slated to decrease to 10% after December 31st, 2016. The solar industry is lobbying to extend this deadline.

Batteries may become more cost effective

As the utilities change the way solar customers get credited for power generated, expect to see batteries play a larger role in renewable solutions for commercial customers.

Kevin Weinberg is a NABCEP Certified Solar Professional and services the commercial solar industry for Baker Electric, one of San Diego’s oldest and most trusted electrical contractors, since 1938.

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