Well, it could have been worse. Had the new rates that the California Public Utilities Commission adopted this month imposed a fixed fee on solar customers, it would have killed the solar leasing industry. But instead, the CPUC made rooftop solar a bit less attractive:

In a unanimous vote, the California Public Utilities Commission on Friday approved a proposed decision (PDF) that will flatten out the state’s existing four-tier rate structure to two tiers, with a 25 percent difference in cost between the two.

That move, part of a proposal released in April, has been opposed by solar companies and environmental groups, since it will reduce financial incentives for the state’s highest-electricity-using households to invest in rooftop solar and energy efficiency. The existing four-tier structure was set in place after the state’s 2001 energy crisis, and has gradually grown to a difference of about 13 cents per kilowatt-hour for the lowest tier to as high as 42 cents per kilowatt-hour for the highest tier.

The good news is that the new rates encourage utilities to adopt better time-of-use plans, which could encourage solar customers to buy batteries to dispatch their solar electricity at peak times and get paid more for it. And the rates do have a surcharge for “energy hogs.” But it won’t replace the steep Tier 3 and 4 rates that encouraged so many to go solar. Hopefully future declining costs of the panels will now make up for the longer payback periods that these new rates will create for solar customers.