On Jan. 27, California’s Public Utilities Commission (CPUC) will vote on a revised set of rules applying to Net Energy Metering (NEM 3.0). If you care about climate change, are considering investing in solar or are one of the approximately 28,500 Net Energy Metering customers in San Jose, NEM 3.0 will impact you.
Under current NEM rules, rooftop solar customers pay a small grid access fee and are reimbursed for the excess energy generated by their solar panels.
The new version of the rules would have a “sizable negative impact” on California’s solar industry. Why? Because it would reduce the incentive for people to adopt solar by adding a steep monthly fee and drastically cutting the amount solar owners are reimbursed for selling back their electricity. Adoption of this rule would institute the highest solar “penalty” in the nation, damage California’s strong solar industry and foster continued dependence on the for-profit energy monopoly.
Increasing the price of solar to protect profits
The CPUC and utility companies claim fee increases are intended to prevent utilities from having to pass the “burden” of supporting solar power on to non-solar users. However, according to a report published by the CPUC, the rise in rates is largely driven by wildfire mitigation efforts and investment in long-distance power lines. Recent increases can also be attributed to the growing cost of natural gas. None of the identified costs are driven by solar, and in fact many of these problems could be mitigated by increased solar adoption.
Utility companies are using rooftop solar as a convenient scapegoat for their proposed rate increases. Dave Rosenfeld, executive director of Solar Rights Alliance, notes that “at a time when Californians are struggling with endless rate hikes, annual blackouts and air pollution, it is insane that the CPUC is proposing to essentially tax people $60 a month just for putting solar panels on their roof. It’s clear Governor Newsom needs to step in and right the ship.”
Loss of solar jobs and industry
There are currently thousands of small solar businesses in California providing approximately 68,000 jobs. These businesses and jobs are directly threatened by the proposed rule.
We know this because a similar rule was adopted by Nevada’s Public Utilities Commission in 2015. This rule tripled fixed fees for solar customers and reduced their energy credit by three quarters. Unsurprisingly, the number of rooftop solar installations fell, major installers left the state and local installers had to reduce staff.
Eventually, the Nevada Legislature passed a bill in 2017 reinstating many of the previous rules and creating a Solar Bill of Rights to protect customers’ ability to generate their own solar power and receive commensurate benefits. Hawaii and South Carolina have endured similar declines after moving to new tariff structures.
An open letter to Gov. Gavin Newsom, signed by San Jose Mayor Sam Liccardo and other big city mayors in California, called upon the governor to reject the proposed changes. The letter noted that “over the last ten years nearly every (investor-owned utility) proposal to impose a solar specific fee on residential customers has been rejected, withdrawn, or subsequently overridden.”
Continued energy monopoly
Utility companies targeted rooftop solar because more solar leads to lower utility bills for everyone. Lower bills equal less profits and undermines utility companies’ monopoly on energy. As Karen Warner Nelson, solar advocate and chair of the Silicon Valley chapter of the Climate Reality Project, states:
“The California Public Utility Commission is aligned with the monopolistic investor-owned utilities that choose profit over the needs of California’s people to have reasonably priced energy and harvest the sun’s energy with their own solar panels. Rooftop solar is a success in California and is helping shape a more livable world built on the use of renewable energy to reduce (greenhouse gas) emissions.”
What you can do
There are many ways to contact the CPUC and share your opinion on this topic. Visit this site and search for the issue using the proceeding number—NEM3 docket number is R2008020. You can also reach out to Gov. Newsom here, and ask him to veto NEM 3.0 should it be approved by the CPUC.
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].