“The changes to net metering approved by the CPUC are a step backwards when we really need to be moving forward with solar and battery storage. It is a dark day in California when the utility regulators try to block out the sun.”

Sacramento, CA—The California Public Utilities Commission (CPUC) voted today to approve changes to solar net energy metering that will make rooftop solar much less affordable in California.

Based on an initial analysis by solar advocates, changes to net metering would significantly reduce California’s solar market by slashing the value of solar energy put back on the grid by 75 percent, effective April 2023. It represents the largest cut to the value of solar in U.S. history. The result is an expected cliff in the growth of new solar installations.

The changes also do not do enough to advance energy storage as it extends the payback periods for these combined systems beyond what they currently are. Today, California is installing roughly 30,000 batteries compared to 200,000 solar systems. With high costs, supply chain constraints, inflation and permitting and interconnection delays and challenges, it will take years before the storage market can match the solar market.

Bernadette Del Chiaro, executive director of the California Solar & Storage Association (CALSSA) issued the following statement on the CPUC’s vote to slash solar net metering.

The CPUC vote is a loser for California on many levels. For the solar industry, it will result in business closures and the loss of green jobs. For middle class and working class neighborhoods where solar is growing fastest, it puts clean energy further out of reach. For our grid reliability needs, it fails to promise robust growth in battery storage. And for California’s race to clean energy, it puts us behind our goals and out of step with the national pro-solar agenda. 

Solar advocates are proud we were able to fight back against the most egregious attacks on rooftop solar the CPUC included in earlier proposed changes to net metering. We stopped a discriminatory solar tax and protected current solar users from a broken deal. 

Still, the changes to net metering approved by the CPUC are a step backwards when we really need to be moving forward with solar and battery storage. It is a dark day in California when the utility regulators try to block out the sun. The solar movement will continue looking for ways to keep rooftop solar growing and affordable in California despite this setback. 

Background:

Currently 1.5 million consumers use net metering, including thousands of public schools, churches, farms, and affordable housing developments, and it is the main driver of California’s world-renowned rooftop solar market. As a result of net metering, working and middle class neighborhoods are just under half of the rooftop solar market and the fastest growing segment today.

In total, distributed solar energy systems have added 13 gigawatts of solar energy to the state, roughly the size of six Diablo Canyon nuclear power plants. In addition, consumers have added nearly 1 gigawatt of energy storage which played a meaningful role in keeping the lights on during recent heat waves.

Big utilities want to change the rules in their favor in order to eliminate a growing competitor, keep consumers stuck in utility monopolies, and protect their profits. Utilities claim solar makes the energy bills of non-solar customers more expensive. But in reality, utility profits, infrastructure investment, transmission lines, and paying for their bad planning and the fires they cause are what drives energy rates up. Californians are not fooled, and real equity champions know energy fairness is about “making rooftop solar panels and batteries more—not less—affordable for working families and lower-income Californians.”

A proposed decision released in December 2021, that would have implemented an unprecedented solar tax and drastic net metering credit reductions, was shelved earlier this year after intense backlash and public disapproval from Governor Newsom. Despite that backlash and the overwhelming popularity of rooftop solar in California, the CPUC’s revised proposed decision still included an immediate and drastic slash to the value of net metering.

With rooftop solar’s vital contribution to reaching California’s clean energy goals, the promise of battery storage for grid reliability, and new federal incentives for going solar, a diverse coalition of solar supporters are calling on the California leaders to keep solar growing and affordable for all types of consumers. More than 160,000 people submitted comments to the CPUC and Governor Newsom calling for a strong NEM-3 decision, the highest count in CPUC history.

CALSSA Statement on CPUC’s Vote to Slash Solar Net Metering

GRID Alternatives Statement on the Net Energy Metering 3.0 Final Decision

https://gridalternatives.org/learn/press/press-releases/grid-alternatives-statement-net-energy-metering-30-final-decision

OAKLAND, CALIFORNIA – December 16, 2022. Yesterday, the California Public Utilities Commission voted to approve the final version of the state’s updated net-energy metering proposal (known as NEM 3.0). GRID Alternatives appreciates the Commission’s deliberation and is relieved to see the recognition that more environmental and economic justice communities deserve a fair shot to benefit from rooftop solar and storage. The final decision extends a moderately higher incentive to single-family households in disadvantaged communities and to tribal families living across the State, and is an improvement from the proposal issued in November, which would have provided assistance to fewer Californians. However, the incentive in the final decision did not go as far as to provide support to families that make less than 80 percent of their area median income (AMI), which is disappointing to many communities of concern across California and is inconsistent with the CPUC’s own definition of environmental justice communities. While families making less than 80 percent AMI  will have access to some income-based incentive programs through the Inflation Reduction Act, they will also have the most difficult time benefitting from California’s net billing tariff.

GRID Alternatives believes that the final decision is gambling on a complicated incentive structure that uses a conservative estimate of project installation costs in order to achieve a targeted nine-year payback. It remains to be seen whether this approach will truly achieve more environmental and economic justice through clean energy. Nevertheless, GRID remains committed to bringing renewable energy to all communities by meeting families where they are and is proud of our partners that fought to keep virtual net energy metering (VNEM) unchanged. Two years ago, GRID noted that projects using VNEM were not included in the analysis of NEM 2.0 projects, and thus, reporting on whether NEM 2.0 was equitable was incomplete.

The notable changes of the final decision; allowing more environmental and economic justice communities to access a moderately higher incentive, and continuing to allow renters to benefit from on-site solar and storage is a clear improvement over November’s proposed decision,  however, GRID remains frustrated that the decision is not as supportive as what was guaranteed in December’s PD. If California is to achieve its climate goals in a way that has a meaningful impact on the environment and for people, a one-step forward two steps-back approach will not suffice. As GRID has stated before, California needs more solar, not less. The state must advance policies that truly realize the opportunity for clean energy for all Californians.

About GRID Alternatives
Renewable energy can drive economic growth and environmental benefits in communities most impacted by underemployment, pollution and climate change. GRID Alternatives is a leader in helping economic and environmental justice communities get clean, affordable renewable energy, transportation, and jobs. Internationally, our energy access work is lighting up off-grid communities in Nepal, Nicaragua, and Mexico. GRID envisions a rapid, equitable transition to a world powered by renewable energy that benefits everyone.