This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Solar to Start Year With Some Long Shadows
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Solar to Start Year With Some Long Shadows
Markets

Solar to Start Year With Some Long Shadows

Editorial Board Published December 31, 2021
Share
Solar to Start Year With Some Long Shadows
SHARE

Rooftop solar companies aren’t exactly starting out the new year with the sun shining on their faces.

Contents
Newsletter Sign-upHeard Alert

Shares of residential solar companies Sunrun RUN 0.85% and Sunnova NOVA 1.60% have fallen 19% and 14%, respectively, since the California Public Utilities Commission put subsidies for rooftop solar—known as net metering—on the chopping block in December. The commission plans to vote on Jan. 27 after taking public comments. Florida is also considering legislation that would cut such subsidies.

The shock to their share prices isn’t surprising given that the two rooftop solar companies don’t yet generate a profit; their shares trade largely on growth prospects. BloombergNEF expects total installations in 2023 to be 19% less than under its base-case scenario without rule changes. California is a leader in rooftop solar adoption and as of 2020 accounted for roughly a third of all new residential solar installations in the U.S., according to Wood Mackenzie and the Solar Energy Industries Association. The state’s customers comprise roughly 40% of Sunrun’s installed base and a quarter of Sunnova’s, according to estimates by RBC Capital Markets.

Much of California’s rooftop solar growth has been fueled by the net metering system, which allows solar customers to sell the excess electricity they don’t use back to the grid at a pretty generous value, the same retail rate they are charged for their home electricity. That has helped spur solar adoption as intended, but someone else has had to pick up the tab.

Since rooftop solar customers pay less on their utility bills, they end up contributing less toward maintaining the grid, which they still use. That has meant the cost burden was shifted to those without rooftop solar, and often those who can’t afford it. Various groups peg that cost shift at between $1 billion and $3.4 billion a year.

The new rule would cut the rate solar customers get for selling their excess energy by a fair chunk. The rate will decline to 3 to 4 cents per kilowatt-hour during most sunny hours of the day, down from 17 to 44 cents per kWh previously, according to estimates from Pol Lezcano, North America solar analyst at BloombergNEF. It also adds a carrot in the form of a credit for installations and a stick in the form of a “grid charge” for solar users. The bottom line is that it will take new solar customers about 11 years to make back their upfront investment in their solar panels through reduced electricity bills, a substantial jump from the seven years it currently takes, according to BloombergNEF estimates.

Net-metering rules have always been contentious across the country, but an overhaul seemed inevitable in California. Its solar-heavy grid has an abundance of electricity during daylight hours but a steep drop once the sun sets. That creates strains. Hawaii, which saw furious growth in rooftop solar before getting rid of net metering in 2015, had to do so largely out of necessity—parts of its grid were overwhelmed by a surge of solar electricity generated during the day.


Newsletter Sign-up

Heard Alert

The first word on what Wall Street is talking about.


There are some silver linings to this. One is that California’s rooftop solar market is no longer at the peak of its growth, which has slowed in recent years. Solar systems are already installed on roughly 15% of California households living in single-family detached structures, according to the National Renewable Energy Laboratory. That means growth, to some extent, has to come from selling battery storage to those existing solar customers. The new rules create a price incentive for households to add storage to solar systems, according to Mr. Lezcano. BloombergNEF estimates that with the new rules, the payback period for solar-plus-storage will decline to six years by 2027, down from eight years now.

For rooftop solar companies, generous incentives were the training wheels that had to come off at some point. Expect some wobbles ahead, but not a crash.

Write to Jinjoo Lee at [email protected]

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Stocks Edge Lower in Year’s Last Session Stocks Edge Lower in Year’s Last Session
Next Article Why Student Debt Keeps Growing—Even When Borrowers Keep Paying Why Student Debt Keeps Growing—Even When Borrowers Keep Paying

Editor's Pick

Alyssa Farah Griffin: ‘The View’ Co-Host is Pregnant With Child #1!

Alyssa Farah Griffin: ‘The View’ Co-Host is Pregnant With Child #1!

Studying Time: 3 minutes The View co-host Alyssa Farah Griffin is pregnant! On ‘The View,’ Alyssa Farah Griffin breaks the…

By Editorial Board 3 Min Read
Melissa Rycroft Admits to Actually “Struggling” in Wake of DUI Arrest
Melissa Rycroft Admits to Actually “Struggling” in Wake of DUI Arrest

Studying Time: 3 minutes Melissa Rycroft is in a darkish place proper…

4 Min Read
Man fatally shot throughout argument over lady at gathering at Tuscaloosa storage unit; suspect jailed
Man fatally shot throughout argument over lady at gathering at Tuscaloosa storage unit; suspect jailed

One individual was killed and a number of other others injured in…

2 Min Read

Oponion

Warriors management play-in future after dealing with Blazers

Warriors management play-in future after dealing with Blazers

PORTLAND – With the specter of the dreaded play-in match…

April 12, 2025

30 Issues Each Man Ought to Personal To Get By means of Life in 2024 | Fashion

The issues each man ought to…

October 15, 2024

Jimmy Kimmel’s Out As Oscar Host, Deadpool & Wolverine In?!

The 2025 Oscars wants a bunch,…

October 15, 2024

One of the best ladies’s chambray shirts for easy on a regular basis type

Which chambray shirts for girls are…

March 19, 2025

For BART, a brand new strategy to buy tickets is anticipated to be a time saver

For BART riders, the necessity for…

August 20, 2025

You Might Also Like

Jamie Dimon warns of main market threat in subsequent few years
Markets

Jamie Dimon warns of main market threat in subsequent few years

CPA and market analyst Dan Geltrude joins ‘Mornings with Maria’ to interrupt down the record-setting rally fueled by synthetic intelligence,…

4 Min Read
Meme inventory mania 2.0
Markets

Meme inventory mania 2.0

Pacer ETFs President Sean O’Hara discusses the advantages of ETFs and lays out his favourite investments on ‘The Claman Countdown.’…

4 Min Read
Traders have fun Japan’s ‘Iron Lady’ election win
Markets

Traders have fun Japan’s ‘Iron Lady’ election win

Federated Hermes CIO Stephen Auth weighs in on Japan's first elected feminine prime minister and provides an concept on what…

3 Min Read
Tesla teases Tuesday announcement with social media movies
Markets

Tesla teases Tuesday announcement with social media movies

Niles Funding Administration founder and portfolio Dan Niles discusses Tesla’s potential $1 trillion compensation plan for Elon Musk on ‘The…

5 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?