The California Public Utilities Commission (CPUC), the entity responsible for regulating the investor-owned electric and gas utilities in California, has launched a proceeding to re-evaluate the current net energy metering (NEM) program and decide upon a new NEM program, to be established as NEM 3.0.
Simply put, NEM is the program that allows rooftop solar customers to be compensated for the excess electricity they send back to the power grid. NEM, paired with solar financing and ratepayer funded incentives, has allowed solar to become increasingly accessible to low-and-moderate income families across California.
California investor-owned-utilities (IOUs), Pacific Gas and Electric, San Diego Gas & Electric and Southern California Edison have submitted a joint proposal that calls for drastic changes to NEM that would make solar energy more expensive, increase the amount of time it takes for customers to pay off the system and ultimately has the potential to eliminate the California solar market.
For a deeper dive on NEM in California, please visit our blog on the history of NEM.
A total of 17 party proposals were submitted to the CPUC for consideration early this year. Each proposal is required to demonstrate the cost effectiveness of their proposal as well as adhere to the guiding principles put forth by the CPUC. These guiding principles include:
Solar friendly proposals were submitted by:
Non solar friendly proposals were submitted by:
*While the final decision is currently "postponed indefinitely", there is some indication that it may be revisited in April or May of 2022. No later than 120 days after the adoption of this decision, the Commission will implement a tariff sunset on NEM 2.0, after which time no additional solar customers will be permitted to take service under the NEM 2.0 tariff. If a customer is seeking NEM 2.0 status, it is imperitive that they have a complete interconnection application filed with their utility no later than 120 days after the adoption of the CPUC's final decision.
On Thursday June 24, 2021 the CPUC voted to approve major updates to the calculator that will be used to evaluate every NEM proposal, called the Avoided Cost Calculator. These major updates undercut the value of solar by two-thirds compared to the 2020 version of the calculator. The calculator was developed by the E3 consulting firm which is the same consulting firm used by utilities that regularly puts out products that are biased against distributed generation.
The commissioners voted unanimously to approve the updates despite the fact that the calculator uses an entirely new and untested model for predicting how wholesale energy pricing will behave in the future. These updates were labeled as minor, and as such did not go through a robust public process where stakeholders can engage and vet the new model. Over 7,000 comments were made by environmental advocates, homeowners, community groups and climate justice organizations urging the commissioners to not vote to make the updates official until after the new model has been put through a public process.
On September 8, the City of Solana Beach became the first city in California to pass a resolution standing up for a strong NEM! We hope this decision will encourage other cities in the region to stand up for rooftop solar and send a strong message to the commissioners before making their proposed decision later this year. In addition to the City of Solana Beach passing this historic resolution, City of San Diego Councilmember Raul Campillo also released a letter that he sent to Governor Newsom and the CPUC. Business for Good San Diego also released a similar letter they sent to the governor and CPUC as well.
On November 9, 2021, the City of Chula Vista voted to approve a resolution and a letter advocating for the CPUC not to make any drastic changes to the current net energy metering policy, which has been very successful in finally making solar accessible to communities of concern.
On November 11, 2021, Imperial Beach Mayor Serge Dedina released a letter to the governor requesting his support to protect the net energy metering program to help expand access to solar and energy storage in underprivileged communities.
On November 15, 2021, the City of San Diego, America’s second-best solar city, became the largest city in the state to weigh in on the proceeding.
Shortly after San Diego’s resolution was approved, the City of Encinitas weighed in with a letter from the city council and Mayor Catherine Blakespear, which stated “the City of Encinitas was proud to be one of the first cities in the region to join a community choice energy program, San Diego Community Power (SDCP), and we have plans for our program to benefit the community in various ways, and net metering plays a role in our impact. The solar fees that are being proposed by the IOUs are fees that SDCP will not be able to avoid, meaning that rooftop solar for our community choice energy program customers may still be inaccessible despite SDCP’s solar-friendly NEM rate, which is bad for our community members, makes it harder and more expensive for SDCP to reach 100 percent clean energy and takes away from potential program opportunities to benefit the community.”
In January of 2022, the City of Carlsbad became the 6th city in San Diego County to formally weigh in on the proceeding and unanimously approved a resolution rejecting the CPUC’s proposed decision.
Read more about our growing local coalition here.
The CPUC’s Proposed Decision
On December 13, the highly anticipated net energy metering (NEM) 3.0 proposed decision was released. It is very clear that the California Public Utilities Commission (CPUC) has sided with the investor-owned utilities and is proposing to make drastic cuts to the benefits of going solar.
The CPUC’s proposed decisions threatens to:
• Reduce solar credits by 80 percent, from around 25 cents per kilowatt hour all the way down to 5 cents per kilowatt hour.
• Mandate solar customers to pay high and punitive monthly fees.
- An average system in SDG&E territory will carry the monthly fee of about $64 per month.
- An average system in PG&E territory will carry the monthly fee of about $48 per month.
- An average system in SCE will carry the monthly fee of about $60 per month.
• Take away protections for existing solar customers, which expected 20-years of so-called “grandfathering.” Under current rules, customers who went solar were guaranteed protections for 20 years. The proposed decision calls for a 25 percent reduction in grandfathering periods for existing customers.
• Increase dirty energy usage, worsening climate injustices and accelerating the climate crisis.
If you would like to speak during the public comment period at the start of the meeting, please participate by phone and call in by 10 a.m. and you will be able to make your comment. Comments cannot not exceed 2 minutes.
1-800-857-1917, passcode: 9899501 (to make a public comment during the public comment period, press *1)
Please help us by calling Governor Gavin Newsom and telling him you are against this proposal and want to see a solar-friendly alternative proposal! Share this information with your friends, neighbors and colleagues!
Call Governor Newsom at (916) 445-2841 or through the Solar Rights Alliance’s calling tool. A sample script is below - feel free to customize this:
“My name is ___ and I live in ____. I am against the proposal to cut the benefits of rooftop solar! The high solar fees and cutting the benefits of solar by 80 percent will kill the solar market and worsen the climate crisis. Nobody should pay a penalty for putting solar panels on their roof and California should be doing more, not less, to promote rooftop solar. Please say no to the utilities’ profit grab, and yes to helping millions of working and middle class people access rooftop solar.“
Additional talking points:
• California has ambitious climate goals that we will not meet with utility-scale solar and wind alone - we need to expand rooftop solar and storage access to communities of concern in order to not only meet our climate goals, but also to help alleviate the burden of skyrocketing energy costs and to provide backup power in case of emergencies.
• Local rooftop solar saves every ratepayer money. Rooftop solar reduces the cost of maintaining long distance power lines as well as wildfire costs associated with long distance power lines that ratepayers must pay. A recent study by Vibrant Clean Energy shows rooftop solar can save California ratepayers $120 billion!
• We are in a climate crisis and should be doing everything we can to expand rooftop solar and energy storage access and transition away from dirty energy, which is contributing to climate injustices and accelerating the climate crisis.
Share this toolkit with family and friends and via social media!
