In solar lingo, California used to do what's called "net metering" -- it's a phrase that's in an old federal law from when solar was not really a thing (maybe the Carter years) that says if a home owner sells power to the grid then the utility has to pay them the same rate per kWh that the utility charges per kWh when homeowners buy from the grid. Also as part of the net metering federal law the utility can't charge large monthly fees to administer the grid buyback.
Some states did away with net metering (Alabama did many years ago, again before solar became good enough to be worth considering). So when I did the math on whether or not I should go solar, I assumed I'd never sell power to the grid (if I wound up doing so I'd count it as gravy on top). That also meant I had to buy inverters with the feature to optionally turn off the grid sell (putting power onto the grid in Alabama without going through the approval phase automatically signs you up for the grid buyback plan with a default large monthly fee that in my case would have been $130/month). I'm now selling power to the grid the past 2 months only because I've had solar for over a year and know how much I'd make selling power to the grid throughout the year (not much, 1/4th the rate per kWh that I pay for power) and the extra monthly fees added are small (I was able to opt for ones that are based on my grid demand what little I buy from the grid). But if that ever changes I'll turn my grid sell feature back off and cancel my grid sell contract -- making me back to being a normal power customer like everyone else only I pull a lot less power from the grid.
Some people didn't do the math like I did or get inverters with the feature to turn off the grid sell because they anticipated being able to sell power and an obscene rate. (Some of my solar contractors told me I could in Alabama but I knew better and didn't do business with them.) It pays to do your homework ahead of time. And it pays to make sure that, whatever the situation, and however it changes when regulations change, you're always the one in control and can pull yourself away if thing go out of your favor.
Thank you for the detailed explanation. Short of the utilities wanting cheap power, is there any reason that they shouldn’t be paying for electricity at the same rate as they charge for it? Or, is that 25% rate the wholesale rate they pay for electricity?