California’s PG&E has one in four rooftop solar customers in U.S.

Utilities may do well to watch Pacific Gas & Electric as a model for a utility that is grappling with an enormous amount of rooftop solar customers. At the beginning of April the California utility announced that it has over 100,000 customers generating their own solar power. That’s the most of any utility in American and a quarter of all rooftop solar systems in the U.S.
The declining cost of solar along with subsidies has sent installation rates throught the roof. PG&E’s 115,000 solar customers represent a gigawatt of power and are double the number of solar customers the utility was facing at the end of 2011. PG&E customers are adding rooftop solar systems at the rate of 2,500 per month.
Similar to other states the massive growth in solar is forcing California to reconsider its current net metering program. Other states are looking at going to a “value of solar” system in which customers sell back solar to the grid at an established rate rather than a credit system. The second question will relate to how far utilities can go in establishing time of use (TOU) pricing, which tie electricity prices to the marginal costs associated with generating power during certain times of the day. Some analysis has shown that such a system would help net metering customers because they could sell their power back to the grid at peak times, generating additional credit.
So far PG&E appears to be rolling with the punches as it must be seeing its revenue erode. One looming fight will remain with regard to connection charges that utilities want from rooftop solar customers, which to my mind amount to payments for maintaining the distribution and transmission operations of the grid. Solar customers are fighting them as they do hamper solar deployment but it seems at least in California that one utility has accepted that it’s going to have work with the reality that cheap rooftop solar is now part of the competitive environment.