The California Public Utilities Commission on Thursday dramatically altered the structures by which new solar customers are compensated for the energy their solar panels produce. The commission slashed net metering rates for new solar panels by about 75%, replacing the old rates with varying payment rates based on the time of day and electricity demand.

The solar industry, which opposes the changes, warns the changes will be devastating to the sector and will hamper the expansion of clean energy. Climate and consumer groups also argue the changes would undermine the statewide benefits of increased renewable energy generation, including improved grid resiliency and greenhouse gas pollution reductions.

For their part, proponents of the changes say the more effective way to displace fossil fuel-generated electricity from the grid is to increase storage capacity so that the surplus solar electricity generated during the day can be used in the evening, when grid operators are currently forced to rely on fossil-fuel generation to meet demand as solar generation goes down with the sun. Utilities, which view distributed solar as a threat to their bottom line and supported cutting net metering rates even further, claimed the old net metering regime disproportionately burdened low-income Californians who can’t afford to install solar panels — climate and consumer groups disagree.

The new rules apply to customers of SCE, PG&E, and SDG&E. Rooftop solar currently supplies about 10% of the state’s energy, more than hydro and nuclear power. The changes may have ripple effects as many states look to California for guidance on energy regulation. (AP, LA Times $, Sacramento Bee $, LAist, CAL Matters, Canary Media, NPR, Seeking Alpha, The Hill, CNBC, PV Magazine, Reuters, New York Times $, Inside Climate News, Bloomberg $)