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Solar to start new year with some long shadows
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Rooftop solar companies aren’t exactly starting out the new year with the sun shining on their faces.
Shares of residential solar companies Sunrun and Sunnova have fallen 19% and 14%, respectively, since the California Public Utilities Commission put subsidies for rooftop solar—known as net metering—on the chopping block in December. The commission plans to vote on Jan. 27 after taking public comments. Florida is also considering legislation that would cut such subsidies.
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The shock to their share prices isn’t surprising given that the two rooftop solar companies don’t yet generate a profit; their shares trade largely on growth prospects. BloombergNEF expects total installations in 2023 to be 19% less than under its base-case scenario without rule changes. California is a leader in rooftop solar adoption and as of 2020 accounted for roughly a third of all new residential solar installations in the U.S., according to Wood Mackenzie and the Solar Energy Industries Association. The state’s customers comprise roughly 40% of Sunrun’s installed base and a quarter of Sunnova’s, according to estimates by RBC Capital Markets.