As controversies continue over the growth of residential solar-power installations and the various policies that support them, one state is standing by its program. In doing so, it has set an example for how to strike a balance between the needs of customers and utilities.

In January, the California Public Utilities Commission (CPUC) adopted a successor to its net energy metering (NEM) program. The new program replaces an existing one, with some adjustments and changes. The action was taken to comply with state legislation passed in 2013, Assembly Bill 327 (Perea), which required the CPUC to encourage residential solar-power installations but to ensure that customers pay their appropriate share of costs.

Net metering programs allow customers with solar rooftop installations to be compensated at retail rates for the power they send back to the grid. Utilities argue that compensation at retail rates is overly generous and does not account for the fact that solar customers are not paying their fair share of the grid maintenance cost. Solar proponents, on the other hand, argue that net metering is an essential part of the cost-benefit calculation that all potential solar customers make. Without it, they say, demand for solar-power installations would suffer.

With its recent decision, the CPUC sent a message that the conflict between utilities and solar customers over net metering is not intractable. The new NEM program imposes two fees. Solar customers will pay a one-time interconnection fee of $75–$150 to ensure safe interconnection to the grid. They will also pay so-called, nonbypassable charges of about 2 cents of energy consumed to fund low-income and efficiency programs. Previously, they only paid the charge if they consumed more electricity from the grid than they sent back over the course of the year. Under the new plan, they will be required to pay the charge on all energy they consume from the grid, regardless of how much energy they export back to the grid over the course of the year.