June 28, 2022
In ESG news, The California Public Utilities Commission (CPUC) plans to establish a California solar tax on solar users in the state. Specifically, those who put solar panels on their roofs and put energy back into the power grid are being taxed. These solar cells are a significant source of clean energy, but some San Diego residents feel like they’re being penalized.
The Previous Attempt For a California Solar Tax
This attempt is not the first time the CPUC has tried to tax consumers. In December, they proposed a tax of up to $700 a year for those using solar panels. That proposal also cut the amount that solar power users were paid for the energy they added back to the grid. The justification for the levy was that solar panel users weren’t paying their fair share of maintenance costs towards the power grid. The public sharply criticized this proposal, causing the bid to be withdrawn. It is now back again with only a few changes.
The “New” Proposal
The new proposal only taxes between roughly $300 and $600 per year, but aside from that, it’s, essentially, the same. In fact, the new proposal will charge more for using less energy from the grid. Advocates of solar energy argue that solar panels don’t need expensive infrastructure to work and, therefore, shouldn’t have to fund a grid they don’t need. Under the new proposal, the CPUC would start taxing new panels immediately and old panels after 15 years. Retroactive charges may be on the table, as well.
A lack of fairness isn’t the only problem people have with this proposal. Critics are concerned that it discourages people from switching to solar power and threatens the jobs of solar panel installers. Additionally, the time it would take to recoup the expense of the solar panels would expand by over a decade. This would price out many working families from being able to afford solar panels. With a lower demand for solar panels, the loss of jobs for thousands of solar panel workers in California would be imminent
California already has some of the highest utility rates in the country. The California solar tax proposal is being presented to ensure that solar energy is not completely subsidized by non-solar consumers. Proponents of the bill believe the tax will be minimal, due to preexisting incentives and a decrease in costs associated with solar panel systems. Opponents, however, believe this could have negative effects on citizens who wish to improve their home’s energy efficiency through solar power.