California just slashed rooftop solar incentives. What happens next?

California sharply reduced incentive payments for rooftop solar power Thursday, taking a sledgehammer to a program that helped 1.5 million homes and businesses put solar panels on their roofs and made the state a leader in fighting the climate crisis.

The unanimous vote by the state's Public Utilities Commission to reduce payments to solar customers for the electricity they generate comes after a decade of controversy over the program. Critics say it has resulted in higher electric bills for households that don't have rooftop solar panels, including low-income families that can't afford them.

Solar installers and clean energy activists call that argument flawed, saying the technology's benefits — including less air pollution in low-income communities, and protection against utility power shutoffs — far outweigh its costs.

But the commissioners rejected their protests, arguing the incentive program needs to change to keep up with the times.

They pointed out that California increasingly has more solar power that it needs during the afternoon — a stark contrast to hot summer evenings when the state has sometimes found itself short on power. They said the revamped incentive program they approved Thursday will encourage more people to install batteries that can bank clean power for those hot evenings.

"California is poised to unlock the next phase of our ambitious climate change agenda, and this decision is part of that," Commission President Alice Reynolds said. "We're building a powerhouse of clean energy storage for grid use in the evening."

The redesigned subsidy program approved by the commission will take effect in April — giving homeowners and commercial businesses that want to