California, a pioneer in solar energy adoption, is facing a pivotal moment as the state’s Public Utilities Commission considers substantial changes to incentives for rooftop solar installations. The success story of nearly two million homes equipped with solar panels has inadvertently excluded a significant portion of the population—renters. With the imminent decision on the proposed alterations to “Virtual Net Energy Metering” (VNEM) and “Net Energy Metering Aggregation” (NEMA) programs, the potential impact on solar adoption in apartments, businesses, and schools looms large.
Challenging the Solar Landscape for Renters and Schools
The existing programs, VNEM and NEMA, have been instrumental in allowing properties with multiple electric meters, such as apartments and schools, to receive compensation for surplus electricity generated on-site. However, the proposed revisions threaten to reshape this landscape, particularly impacting renters and schools. Apartment residents may still receive credits, but at a reduced rate, and shared spaces like laundry areas, gyms, outdoor lighting, and electric vehicle charging stations would be excluded. This exclusion raises concerns about the economic viability for apartment owners and the potential stalling of solar adoption in rental properties.
For schools, the proposed changes not only reduce compensation for excess electricity but also mandate full retail price payment for the electricity they consume during the day. This could hinder the progress of school districts mandated by state law to pursue sustainable initiatives. Despite the importance of such projects, schools face financial challenges, with solar installation costs drawn from their facilities budgets, which are dependent on periodic school bond measures.
Echoes of Past Impact and Utility Industry Perspectives
The reduction in solar incentives for single-family homes last year resulted in an 80% year-over-year drop in the solar market, according to the California Solar and Storage Association. The nation’s largest solar installer, Sunrun, reportedly laid off 1,000 employees following the policy change. The proposed changes have sparked concern among solar advocates and industry associations, fearing a similar downturn and setback in achieving California’s clean energy goals.
Utility companies, including Southern California Edison, argue that the changes are necessary to prevent a perceived “cost shift.” They claim that those without solar installations bear the burden of higher electricity rates and fixed costs. Additionally, they emphasize the complexity and added costs of accurately crediting multifamily properties, citing the difficulty in determining energy usage patterns in such buildings.
Perspective from Renters and Schools
From a renter’s perspective, the proposed changes pose significant challenges. Sean Draper, a renter in Simi Valley with seven years of experience in the solar industry, expresses concerns about the feasibility of discussing solar installations with his landlord under the proposed policy. While credits for residents are maintained, the exclusion of credits for shared spaces, especially amid rising gas prices, raises questions about the practicality of solar energy for apartment dwellers, impacting their ability to adopt sustainable practices like using electric vehicles.
Draper’s concerns extend to small businesses, as the proposed credit applies only to residential tenants in rental properties and not commercial tenants. He emphasizes the importance of continuing onsite netting of power for all tenants, both residential and commercial, striking a balance between providing benefits to tenants while offering some relief to utilities in terms of compensation for power generation.
School districts echo these concerns, emphasizing the potential negative effects on their ability to reach climate goals and invest in sustainable learning environments. Rising energy costs, coupled with the obligation to electrify school buses and add solar panels, present financial challenges that could impact the overall quality of education.
The Path Forward: Balancing Fair Pricing and Sustainable Growth
As California stands at this solar crossroads, the decision by the California Public Utilities Commission carries significant implications for the state’s renewable energy future. Striking a balance between fair pricing for power and continued support for solar adoption is essential for sustaining the momentum toward a cleaner, more sustainable energy landscape. The collaboration between government policies, utility companies, and individuals is crucial, and any disruptions in incentives and subsidies could jeopardize the progress made thus far.
Further, if you are thinking of going solar, this is your last chance.
