Amy Suarez

A California regulatory judge preliminarily rejected a move by Sunnova Energy, one of America’s biggest rooftop-solar companies, to serve as a micro-utility to new residential communities in the state.  The company was trying to use an obscure law relating to a 1920s ski resort to force its way into the highly regulated electricity Utility business.

A formal rejection would be a blow to residential solar and battery providers that have begun eating into the customer base of California’s big three privately-owned utilities — PG&E Corp., Edison International and Sempra Energy’s San Diego Gas & Electric. All three have fought to protect their territories as new technologies have eroded their monopolies.

Texas-based Sunnova, in September submitted an application to the California Public Utilities Commission to build and operate microgrids as part of new master-planned residential communities. But an administrative law judge said in a proposed decision issued Tuesday that Sunnova had failed to provide the information required for a so-called certificate of public convenience and necessity.

Sunnova is one of the biggest US corporations at the forefront of the struggle for more rights for off-grid energy producers.  It supplies solar rooftops under a variety of innovative financing arrangements, allowing property owners to install now and pay later.

Extreme weather and higher electricity prices are leading American households to bolt a record number of solar panels to their rooftops, loosening ties to the power grid and the utilities that run it. About 5.3 gigawatts of residential solar power capacity were installed in 2022, the biggest year for new installations and roughly equivalent to total rooftop solar capacity nationwide in 2015, the US Energy Information Administration has said. Installations jumped about 40 per cent year on year with about 180,000 US homes adding systems in the second quarter, according to data compiled by consultancy Wood Mackenzie. Home electricity prices rose only 7.5 per cent in 2022 – compared to much steeper rises in Europe,  and 4.3 per cent in 2021.

Rates have climbed largely because of higher prices for natural gas used to fuel power plants. “You’re going to continue to see some pretty big increases in monopoly utility bills over the next few months and quarters and we’re seeing growth because of that,” said John Berger, chief executive of Sunnova.

Berger said the utilities were defending a “Soviet-style” system that prevents competition in the power sector because they worry that the growth of home solar will eat into their market. “Consumers don’t have choices. They don’t get to choose their power provider, and I think they should be able to and I think more and more people are demanding that,” he said.

Executives and analysts also point to the numerous storms, heatwaves and fires across the country that have exposed deep vulnerabilities in the reliability of power grids across the US. Hurricane Ian last month knocked out power to 2.6mn customers in …