The solar industry, especially in California, has been having quite the year, most of it not good for many people in the local industry.
First, there was a scare regarding the state's net metering program, in which the California Public Utilities Commission was set to consider dramatic changes to the financial structure of residential solar. Changes to the program proposed to cut the value of generated energy that residential customers could sell back to the grid by more than half, threatening to cripple California's nation-leading solar industry. A poll showed that 95 percent of would-be solar customers said they would lose interest in pursuing an at-home solar system under the proposed rule changes. The CPUC has shelved the proposal for now, but it's likely to come up again in the near future.
Atop supply chain issues that were delaying new solar projects by months and sometimes more than a year, the U.S. Department of Commerce launched a surprise investigation into solar technology imports from the four Southeaster Asia companies the U.S. and Californian markets have come to rely on since Chinese products were slapped with deterring tariffs. The investigation temporarily stalled imports of these solar cells, further delaying projects and throwing the entire industry into chaos. That is until the Biden Administration ordered tariff-free imports from the Southeast Asia country while the investigation was pending.
On Tuesday, California legislators appeared to acknowledge solar's difficult and uncertain run. The legislature decided to extend an expiring law that excludes solar projects from property taxes. Installing a solar system on a property often increases the value of the property, whether it is commercial or residential. The extension passed by California legislators this week assures property owners, especially those welcoming large-scale commercial projects on their property, that the increase in value will be excluded from the property tax calculation. The bill aims to maintain interest in solar systems by not creating an additional tax burden. With the financial future of the industry so uncertain, this exemption offers some predictability at a critical time.
Rick Umoff, senior director and counsel at the Solar Energy Industries Association, said in a statement that the property tax exclusion extension will do much to keep solar investments in California.
"This near-term extension of the property tax exclusion will provide companies with much-needed certainty to keep building solar and storage projects to help California meet its reliability and clean energy challenges," Umoff said.
Now, eyes will turn back from this expiring tax benefit to the outcome of net-metering and fixes for the gummed up supply chain.