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IRA’s Impact Already Felt in California’s Solar Market
Under the IRA, companies that generate zero-emissions electricity (or others that build batteries to store excess energy from renewable sources like wind and solar) are eligible for tax credits that become more valuable if wage and apprenticeship rules for workers are met — something that applies across the board in the law.
When it comes to solar, large projects with rows of panels in the desert represent only about half of California’s solar market. The other part is distributed (rooftop) solar consisting of panels and energy storage units on a discrete property. The IRA also offers updated credits for individuals to install this kind of small-scale solar.
Federal credits for solar installation are now being shoehorned into a fight at the California Public Utilities Commission, where large utilities — Pacific Gas Electric, San Diego Gas Electric and Southern California Edison — are lobbying to gut separate credits for rooftop solar on the state side.
Unions representing trade workers prefer larger projects because opportunities for industrial work in rooftop solar are scant.
Utilities “are playing a zero sum game: Whatever Congress gave, [Gov.] Newsom should take away,” says Bernadette Del Chiaro, executive director of the California Solar Storage Association, who says utilities are trying to dominate the market by undermining rooftop solar.
Just days after President Biden signed the IRA into law, the three utilities submitted a motion asking the PUC to factor in the new federal credit in its decision on whether to limit state-issued credits.
Unions representing trade workers prefer larger projects because opportunities for industrial work in rooftop solar are scant. Over the last couple years, they’ve fought alongside utilities to end California’s “net metering,” which allows rooftop solar owners to receive a state credit for surplus energy they send to the grid.
On Sept. 19, 16 members of California’s congressional delegation sent a letter to the PUC asking it to preserve net metering, writing that it was “concerning to see entities arguing that the IRA’s passage warrants weakening state-level solar and storage policies.”
A coalition of unions representing utility workers asked the PUC to rescind net metering, arguing it unfairly benefits wealthy households that can afford upfront costs of solar installation. Various health and environmental justice groups say this reasoning has no merit.
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