PG&E’s “Solar Friendly” Commercial Tariff Will Close to New Accounts
Earlier this year PG&E changed the eligibility requirements for their “solar friendly” A-6 tariff. The change means that many new industrial and commercial solar projects will lose significant value because they are no longer able to take advantage of the substantial net metering credit offered by the tariff. Originally this change was slated to take place July 23rd, 2015, but thanks to vehement protests from solar industry advocates and commercial solar installers explaining that the abrupt closure of the tariff would greatly harm the financial returns of their commercial solar installations, the tariff closing has been delayed until December 31st, 2016.
What is the A-6 Tariff?
PG&E’s A-6 rate is the “solar-friendly” tariff that allows certain industrial and commercial solar customers who export energy from noon to 6 P.M. (during peak demand) to earn a significant net metering credit (61¢/kWh). Thanks to the extension of the closing until December 31st, 2016, new solar projects should have more time to switch to the tariff. While transitioning an account to the A-6 tariff before the project is complete is an option, doing so will greatly increase the cost of electricity for commercial solar installers until the new solar project comes online and net metering under the A-6 tariff for energy exported back to the grid is able to compensate. Essentially, the payback for commercial solar installations could increase by years thanks to the closing of the A-6 tariff.
The Future of the A-6 Tariff
As of this writing, PG&E has not proposed or promised a “next best” tariff to fill in the gap for medium industrial and commercial solar customers left behind by the closing of the A-6 tariff. Those who do switch to the A-6 tariff before its closing will continue to receive service for a currently uncertain number of years. Due to the dramatic decrease in value the closing of the tariff will have on many commercial projects, the coming end of the Federal Investment Tax Credit for solar, and the somewhat uncertain end date of Net Energy Metering, the pressure is on to complete solar installations, especially medium commercial ones, before the end of 2016.