The California’s Public Utilities Commission (CPUC) voted 5-0 last week to change the existing net energy metering (NEM 2.0) rules to reduce the reimbursement rates for rooftop solar by 75%. The new rules (NEM 3.0) goes into effect in April, and will supplant the existing rules where excess energy produced by rooftop solar was credited back at close to retail rates.
Lucky for solar owners and the planet, new rules could have been much worse. Initial drafts included a steep monthly fee of up to $60, and the new rates would have applied retroactively to all of the current 28,500 Net Energy Metering customers in San Jose. The approved rule is also not retroactive and rooftop solar owners can apply to be grandfathered in under the NEM 2.0 rules for a 20-year period. In another “small” win for solar, net billing will still be settled on an annual basis as opposed to a monthly basis, which is considered more beneficial for solar owners.
Overwhelming opposition goes unheard
An impressive coalition of solar advocates opposed the proposed changes to NEM 2.0. Over 160,000 people submitted comments to both the CPUC and Gov. Gavin Newsom’s office, the most in the CPUC’s history. The rules also received outspoken criticism from high-profile public officials such as San Jose Mayor Sam Liccardo and Newsom.
For a flavor of the sentiment, look no further than the public comments aired during the Dec. 15 meeting. Samuel Wigness, a writer for solar.com, live-tweeted the opinions of callers who levied heavy criticism upon the CPUC. They described the new rules as “misguided,” “too extreme,” and in the words of an experienced solar worker, “a huge step backwards for California, and mankind.”
Other callers focused on the perceived interests at play, arguing that the rule changes are “designed to protect utility profits,” accusing the CPUC of “acting in the interests of the utilities not the will of the people,” and encouraging the CPUC to “stand up for the public to promote solar.” By Wigness’s account, not a single proponent of the new rule called in.
Negative consequences impact solar and non-solar users
The new rule will also seriously hamper California’s efforts to address the climate crisis. According to Karen Warner Nelson, founder and co-chair of the Silicon Valley Chapter of the Climate Reality Project, rooftop solar has an essential role in California’s 2045 clean energy targets. She said, “robust and large-scale rooftop solar is a key solution to fighting climate change which is why it was included.”
According to Dave Rosenfeld of the Save California Solar coalition, states and localities that have made similar changes saw solar adoptions drop by half or more.
For example, Nevada adopted a similar rule in 2015, only to have the Nevada Legislature unanimously pass a bill in 2017 reinstating the previous rules. Unfortunately, it was not soon enough to prevent a sharp downturn in solar installations and the subsequent loss of jobs and income.
Picking up the pieces
Solar advocates put up a stiff fight against these rule changes, and I hope that they continue their efforts. Next steps may include taking up the issue with Newsom and potentially going the way of Nevada and pursuing legislative change.
California could also learn from Hawaii’s turn around on solar. After Hawaii did away with net-energy metering in 2015, energy costs remained high and the solar industry was severely damaged. However, earlier this year, the state approved an innovative rate structure adapting time-varying ‘smart rates’ which reward people for not using electricity during peak demand when energy consumption is at its dirtiest and most costly. These rates are applied equally to all energy users, neither unfairly punishing rooftop solar owners or disadvantaging low-income electricity users. Energy users pay grid maintenance fees based upon their rate and time of usage, meaning they can proactively reduce their energy bill by altering their behavior.
Time will tell what the consequences of the NEM 3.0 rules will be on solar adoption and the solar industry. For those considering rooftop solar, if you act quickly, there is still time to get solar installed under the more-favorable NEM 2.0 rules.
San José Spotlight columnist Erin Zimmerman is a climate reality leader with the Climate Reality Project’s Silicon Valley chapter. Erin, a long-time environmental and political activist, holds a PhD in political science. Her column appears every third Wednesday of the month. Contact Erin at [email protected].