This February, following several weeks of industry outcry, public protest, and political leader involvement, California’s Net Energy Metering (NEM) 3.0 was delayed, and then opened for public comment.
As proposed, NEM 3.0 would have slashed the payments made by utility companies to rooftop solar owners for exporting their excess PV production back to the grid. EQ Analysts said the proposal would lead to a 57% to 71% overall reduction in solar savings across the state.
A revised proposed decision was released after the original was condemned as “a tax on the sun” and a “proposed dystopia.” The revised decision that was sent out this May packaged rooftop solar-slashing provisions in a different form, and it continues to draw the ire of solar-supportive Californians, environmentalists, industry members, political leaders, and those who oppose utility monopoly.
The proposal includes a “glide path”, that would taper down payments for solar customers in increments over a four-year period, eventually reaching the “avoided cost” rate to the utility. The “avoided cost” is a very low rate that does little to support the value that solar owners bring to the grid by exporting local, clean energy to their neighbors.
Under even sharper scrutiny are the “non-bypassable charges” that were added in the revised NEM 3.0. These charges would add a proposed $0.05/kWh to all customers, whether they have solar on their roof or not. The charges would even apply to power generated by the customer’s home solar system, which is unconventional considering the utility does not have ownership over the solar array and did not invest in it.
For context, the average American pays about $0.145/kWh for electricity, so the addition of a $0.05/kWh non-bypassable charge would be a heavy-hitter on Californians’ utility bills.
More than two dozen city governments, 43 mayors, and 40 city or county councilmembers from across the state have signed on to support protection of the solar industry and oppose the attempt by utilities to impose a solar tax and slash the net metering credit for California consumers. Their statements can be found below.
The CPUC “threatens to kill rooftop solar in CA with cost-prohibitive fees,” said Mayor Sam Liccardo of San Jose. “Gavin Newsom, now is not the time to lose California’s clean energy leadership.”
“The CPUC and Governor Newsom should listen to what local leaders across our state clearly want on behalf of their constituents: more local solar and batteries,” said Dave Rosenfeld, Executive Director of the Solar Rights Alliance. “This statewide solar tax would destroy the momentum these California communities have so successfully started.”
“This is the wrong approach when our City and State goals tell us we need to accelerate our clean energy transition,” wrote the City Council of City of Petaluma.
“The proposed decision to increase the costs of solar adoption would jeopardize the installation of future solar projects and penalize those who have already adopted solar energy systems,” South Bay Cities Council of Governments (SBCCOG).
Over one hundred city and county governments have signed on in support of rooftop solar, and hundreds of local businesses and organizations have done the same. The California Public Utilities Commission will review these, and many other comments, before deciding on the proposal, which could occur as soon as late July.
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