December 23

Insurer: 75% of California rooftop solar companies are high risk, more bankruptcy on the way

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Solar Insure told pv magazine USA the financial stability of rooftop solar companies operating in California is in question. Despite this, California reaffirmed recent anti-solar decisions in a recent appeals court hearing.

A year ago, the California Public Utilities Commission (CPUC) approved NEM 3.0, a rulemaking decision implemented in April 2023 that slashed compensation for exported rooftop solar generation by roughly 80%.

Now, several months after implementation, the effects of NEM 3.0 have become clear. Utility interconnection queues show an 80% drop in installation applications. The California Solar and Storage Association (CALSSA) reported that nearly 17,000 rooftop solar jobs, about 22% of the workforce, were lost this year as a result.

Solar Insure, which backs many installation companies in the state, told pv magazine USA that its data shows 75% of solar installers are now in the “high risk” category following CPUC’s decision to implement NEM 3.0.

“We have seen a wave of recent solar installer bankruptcies and believe another wave will come in Q1 2024,” said Ara Agopian, chief executive officer, Solar Insure.

Despite public protest and industry warnings of devastating effects, the CPUC ruled in favor of its private investor-owned utilities. These utilities pushed forward the assumptions of NEM 3.0 based on a call for equity and fairness, saying that renters were being left behind by rooftop solar. Not long after pushing the policy through, CPUC revealed the equity concerns were merely talk, and it moved through further rulemaking decisions that made it harder for renters reap the benefits of rooftop solar.

Thanks to the help of Governor Gavin Newsom’s appointed CPUC board, Pacific Gas and Electric (PG&E), San Diego Gas and Electric’s parent conglomerate Sempra, and Southern California Edison (SCE), achieved the market conditions they desired. The three companies have a market cap of roughly $120 billion, and they have successfully fixed the market to punish small rooftop solar installers and support utility-scale development instead.

In a decision this week, the Court of Appeal of the First Appellate District reaffirmed CPUC’s decision to implement NEM 3.0, despite the bankruptcy and job loss data. CALSSA said this came as no surprise, as the 2013 legislation requiring a reevaluation of net metering and the CPUC rulemaking process itself has been “stacked against solar since the beginning.”

The devastating job losses, bankruptcies, and unabashed regulatory moat building around the profits of a hundred-billion-plus corporate beast calls into question the legislative foundations of Gavin Newsom’s appointed CPUC board. 

California’s electricity prices have exploded over the last three years, far outpacing inflation. Without rooftop solar as a thorn in its side, the state’s utilities can continue to reap profits in a de facto monopoly.

The market conditions have led to a rise in “grid defection,” where customers cut the cord and rely on their own solar assets to power their home. As solar equipment costs inherently go down over time, grid defection could represent an existential threat to private utilities. Current legislation makes it very difficult to defect from the grid, and CPUC’s pro-utility attitude could likely place this at risk for being legislated out in the future, further placing Californians at the mercy of rising utility prices.

Source: PV Magazine

The post Insurer: 75% of California rooftop solar companies are high risk, more bankruptcy on the way appeared first on Energy News Beat.

  


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