By Nichola Groom

(Reuters) – California will propose modifications to a policy that permits owners of solar panels in private homes to sell excess energy to the grid for a retail price.

Net metering is a controversial policy that was established decades ago. While solar supporters say it’s been vital in helping the industry grow, critics claim it amounts to an enormous subsidy to wealthy homeowners at the cost of utility ratepayers.

Any changes to this policy can have a huge impact on both the utility and the solar industry, which includes big-panel installers like Sunrun Inc (NASDAQ:) Inc) and SunPower Corp (NASDAQ:) Corp. Experts suggested that it may also serve as a warning to states who tend to emulate California in terms of climate change policies and clean energies.

California accounts for approximately 40% of all the country’s residential-solar energy production capacity.

Public Utilities Commission in the State has been gathering feedback about this issue from solar industry and utilities representatives. They could release an announcement on Monday. Last year, the commission made small changes in net metering.

Critics of net-metering claim that by allowing solar panel owners to trade their electricity at market rates, they are effectively exempt from any responsibility for maintaining the grid infrastructure. These costs are embedded in the electric rate for regular ratepayers.

An earlier University of California, Berkeley research found that customers who don’t have solar in San Diego, which has more than 20% of the residential energy consumption, are paying an additional $230 annually on their utilities bills.

Matthew Freedman of The Utility Reform Network (TURN) in California, said during an interview that “it’s a reverse Robin Hood scenario.” So we asked ourselves: “Should the biggest subsidies be provided to the wealthiest customers in the state?”

According to research, solar panel-equipped households tend to have higher incomes than those without.

State-owned investor-owned utilities recommended lowering solar energy sales rates and charging monthly fees to pay for maintenance of transmission lines.

According to the industry, these reforms would hurt state efforts against climate change. The industry has suggested a gradual decrease in net metering rates over eight year.

“Solar companies would go out of business in towns all over the state and the market would plummet” if ideas like monthly fees are adopted, said Brad Heavner, policy director for the California Solar & Storage Association.