Net metering is a critical policy to advance rooftop solar, and it has been incredibly effective in California. So effective, that it has driven down the wholesale cost of electricity in the middle of the day. However, because it allows customers to effectively turn their meters backward if they have excess solar power, it gives credit at the retail rate, which has roughly doubled in the last decade.
The Commission issued a proposed framework for NEM 3.0 in December 2021 that introduced a significant Grid Participation Charge of $8/per kilowatt of installed solar and lowered the compensation rate for excess generation, among other significant changes.
The Proposed Decision was widely condemned by the solar industry and viewed as putting a halt on solar rooftop installations, contrary to the State’s clean energy policy goals. Especially those in working- and middle-class neighborhoods where solar is growing fastest. It would also hurt the commercial, government, and agricultural solar markets.
Luckily, with the weeks of industry outcry, public protest, and political leader involvement, California’s Net Energy Metering (NEM) 3.0 was put on hold for an indefinite period. Now, once again the California Public Utilities Commission (CPUC) is about to take another crack at the issue.
On Monday, the California Public Utilities Commission issued a ruling reopening public comment on aspects of its December net-energy-metering (NEM) proposal. The comment period will be open until June 24, after which the CPUC will revise its proposal. That pushes the timeline for the release of a new policy into July at the earliest. The Commission seeks feedback from utilities, solar systems owners, solar companies, and other related organizations on a structure that is agreeable to the nation’s largest solar industry, representing 50% of all US rooftop solar, and its citizens.
According to ROTH Capital Partners, the CPUC is now accepting comments regarding the glide path approach, non-bypassable charges, and community DERs. The CPUC is seeking input on an alternative glide path that would give customers a fixed export adder in addition to the avoided cost calculator (ACC) rate. The export adder would step down over time.
Bernadette Del Chiaro, executive director of the California Solar & Storage Association, issued the following statement on the ruling from the CPUC:
“Our large and diverse coalition of solar supporters is glad the CPUC recognized just how far out of step the first proposed decision was with California’s clean energy goals and equity values. Californians strongly support rooftop solar and will not accept a decision that taxes the sun or slows our state’s clean energy progress by making solar unaffordable.”
Del Chiaro is concerned that Monday’s ruling from the CPUC doesn’t specifically ask for public comment on what her group considers to be the most harmful part of the December proposal: the monthly “grid-access charge” for owners of new rooftop solar systems, which CALSSA and its allies have dubbed a “solar tax.” It would be a fee of $8 per kilowatt of solar production capacity, adding up to an extra $40 to $60 per month for typical systems.
“Some policymakers in California, I would argue, are confused about the principles that have built California’s clean energy success to date,” Del Chiaro says. “Number one is using less energy from the grid is good for everybody. Nobody is talking about the electron not consumed via energy efficiency. Why are we demonizing the self-consumption of solar when we have nothing to say about energy efficiency. Not that we should, just pointing out this hypocrisy.”
Distributed solar is half of California’s market, and it needs much more. The CEC’s forecast shows that 40 GW of rooftop solar is needed by 2045 to meet the state’s clean energy goals. Here’s hoping the PUC recognizes this reality in its next NEM 3.0 proposal and adjusts its models and concept of equity accordingly.
Opening comments in response to the Ruling are due on June 10 and reply comments may be filed by June 24.