(Reuters) – A subsidy for residential solar power in California will cost electricity customers without their own rooftop solar panels about $8.5 billion annually by the end of the year, leading to higher electricity prices for consumers, according to an analysis released on Thursday by the consumer watchdog group in the leading U.S. solar state.

WHY IT IS IMPORTANT

The new rule lowered the rate, making the switch to solar less attractive and angering environmental groups and the solar installation industry, which said it lost more than 17,000 jobs as a result of the change.

Customers who joined the program before the change will continue to benefit from the previous incentives. The CPUC’s Public Advocates Office said the cost of these subsidies would be borne by customers who do not have rooftop solar panels, as they would pay the utility’s fixed costs, such as grid maintenance, while solar system owners would enjoy lower bills.

IN NUMBERS

According to the analysis, net energy metering will cost consumers without solar systems $8.5 billion by the end of 2024. In 2021, it was $3.4 billion per year.

Customers continue to benefit from the net metering program for up to 20 years.

WHAT’S NEXT?

The Public Advocates Office has proposed several changes to the net metering program to reduce so-called cost shifting to customers without solar systems.

Recommendations include transitioning net metering customers to the new program after 10 years or after they sell their home, and setting net metering payments based on electricity rates in effect at the time of joining the program, rather than current higher rates.

(Reporting by Nichola Groom, editing by Deepa Babington)

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