Florida and California consider changes that could ‘decimate the rooftop solar market,’ experts say

California and Florida are considering revoking a policy that has encouraged homeowners to install rooftop solar panels — causing fear among solar panel owners and installers, and creating divisions in the environmental community.

Utility companies in the two states, some sympathetic politicians and even some environmental advocacy groups are taking aim at subsidies to purchase and install solar panels because they say those costs are ultimately passed on to other ratepayers.

The crux of the issue is a practice called “net metering,” in which the electricity solar panel owners send back to the grid is removed from their monthly bill. The credits are applied at the same retail rate at which electricity is sold to consumers. That’s a higher rate than the wholesale price at which utilities buy electricity from large-scale producers. For example, if the retail rate is 30 cents per kilowatt hour, the amount a utility would pay a bulk producer — like a commercial wind farm — might be 15 cents per kilowatt hour. The difference covers the costs of building and maintaining the electric grid and the utility’s other overhead costs. (Utilities’ profit margins more typically come from their capital investments.)