The California Public Utilities Commission today released a long-awaited revision of its proposal to regulate rooftop solar systems, scrapping an unpopular new fee but reducing the amount that utilities homeowners would pay to put electricity into the grid .
Efforts to overhaul the management of California’s residential solar program have stalled for more than a year. The CPUC’s challenge is to encourage more rooftop solar production without disproportionately burdening low-income residents with higher energy bills.
Increasing the use of solar energy as a substitute for fossil fuels is considered critical to reducing greenhouse gases in California. State law has set a goal of 90% carbon-free energy by 2035 and 100% by 2045.
The revised proposal addresses some – but not all – concerns of solar advocates. Energy companies say it’s not difficult to spot the governor’s fingerprints on the changes. Newsom, who appoints the five members of the CPUC, chimed in twice and suggested revising the original proposal.
“The changes are significant,” said Kathy Fairbanks, a spokeswoman for Affordable Clean Energy For All, which represents 120 organizations including Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. “It’s clear that there was some influence.”
The CPUC will hear oral arguments at a public meeting next Wednesday and is scheduled to vote on the measure on December 15. If approved, the new rules would come into effect next April.
The revised rules would:
- Remove a proposed $8 monthly fixed fee, called a solar tax, for new condominiums.
- Reduce utility company payments to homeowners for excess electricity they sell by up to 75% compared to current rates. The change would not apply to residents with existing solar systems.
- Fund $900 million in new stimulus payments to support rooftop solar purchases, with $630 million earmarked for low-income households.
- Promote the installation of solar panels and battery storage.
- Set lower tariffs to shift consumer power consumption to times of the day that improve grid reliability.
The CPUC is required by state law to update its net metering rules, triggering a lengthy, complex, and politically sensitive process.
Bernadette Del Chiaro, executive director of the California Solar & Storage Association, said reducing credits for new solar customers by 75% meant utilities would pay residents less for the electricity their rooftop systems feed into the grid.
The proposed rules “would really hurt,” she said. She estimated that new customers would receive a base fee of 5 cents per kilowatt-hour for electricity they generate but do not consume, compared to around 30 cents currently.
Del Chiaro said the latest proposal “needs more work or it will replace the solar tax with a precipitous decline in solar.”
The solar industry is pleased that the monthly fee has been abolished. They said the surcharge would have prevented solar panel installation and hurt the growing clean energy sector.
However, state utilities are disappointed that there are no changes that would better manage the shared cost of residential solar power.
“We expected that [Commission] to do more. It’s frustrating,” said Fairbanks of Affordable Clean Energy For All.
Fairbanks said the amended proposal does not address so-called “cost shifting,” referring to solar customers not paying their fair share of the cost of providing residential electricity and the impact on the functioning of the power grid. Utilities say these costs are now being unfairly shared among all tariff payers.
According to CPUC’s Public Advocate’s Office, more than $3 billion was passed on to non-solar customers in 2021. The new proposal “went backwards” to fill that gap, Fairbanks said. Rooftop solar customers “have been getting a good deal for decades.”
The original proposal largely reflected the interests of the state’s three largest utilities. It has been attacked by the solar industry, clean energy advocates and consumers, and environmental justice organizations.
Solar advocates rallied before the state Public Utilities Commission in San Francisco on June 2, 2022 to push for cheaper payment rates for homeowners with rooftop solar panels.
Justin Katigbak
The proposal was ill-timed: As the state ramped up its renewable energy ambitions, Newsom reiterated that rooftop solar power was “essential” to meeting California’s clean energy goals. The state’s popular incentive program has installed solar panels on 1.5 million home and small business rooftops.
The policy, called net metering, was introduced in 1995 and created a framework for large utilities to buy excess energy from homeowners and feed electricity into the grid. The program was supported by incentives that lowered the upfront cost of purchasing the systems.
The new proposal mentions the development of clean energy and its impact on the power grid. Officials say the rule would align state policy with a grid that’s bloated with solar energy during the day and overloaded with electricity demands by sundown.
Julie Cart is a project and environmental reporter at CalMatters, where this article first appeared. Email: [email protected]