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.
Public comments
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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Federal government should standardize what NEM means.
It should be a one for one kWh received per kWh delivered credit, PERIOD! That’s how NEM started out with 2005 FETCs incentivizing residential rooftop solar. Don’t change rules after the game has started.
Get local politicians, anti-solar-NEM activitists and deregulated utilities out of the political stew pot.
There should be no penalty on NEM customers just as there is none for anyone using less electricity by switching to heating water from electric to natural gas or roof-top water bags…or incandescent and fluorescent lamps to LEDs.
Utilities can make up their revenue losses associated with reduced usage due to rooftop solar by adopting large scale solar farms or nuclear that benefits everyone with lower cost carbon-free generating sources.
PS: Don’t tell California’s or nuclear-free-zone Berzerkley’s politicians that solar energy is from a nuclear fusion reactor called “THE SUN.”
You are absolutely right! DO NOT CHANGE THE RULES AFTER THE GAME HAS STARTED!
All of us who have invested in solar did it because of 2 reasons: Contribute in a small way to save earth and save some money really , really long-term. It is not like you rake in money the first day! You may start to see pay back after 5 to 8 years! And now, all of a sudden the politicians start to lick the electric companies because they get less revenue. How fake can this country’s politicians and public servants get.
It is like listening to a snake, with a cloven tongue. We invested in solar based on one set of rules and now the rules are changes to benefit power companies that do not care about anything but their profits, with no consideration how power is generated, polluting or not. Politicians seem to have no backbone to stand up for us, the public against the SCE’s of this world!
The entrenched interests want to kill residential solar. Unless we fight tooth and nail, and hold them accountable, we’re not going to rid these corrupt people from utility regulatory commissions. From a 2019 Ventura County Star article about the CPUC – “Meet the new boss; same as the old boss,” went the refrain in the 1971 hit record “Won’t Get Fooled Again” by The Who. It’s also a pretty fair description of today’s situation at the California Public Utilities Commission, now staffed partly by new commissioners not present during most of the agency’s debacles of this decade.
California regulators have approved a measure allowing Pacific Gas & Electric Corp. to immediately obtain credit and loans while the company is under Chapter 11 bankruptcy protection.
Things look very different on the surface in part because the five-member commission now has four female members for the first time since its founding more than 100 years ago.
The trouble is, things really are not very different. This agency, which regulates prices and practices at most of the state’s electric, natural gas, water and some telephone operations, has been caught favoring and colluding with electric and gas companies repeatedly. Many see its rate-setting proceedings as charades akin to a Japanese kabuki dance that features lots of activity, but a predetermined outcome
Today, I am enjoying 100% off grid electrical from my solar system for Air conditioning, lighting cooking and other electrical needs. Why do we need utilities breathing down our necks on how we produce out power and how we use it? My off grid, retail purchased system of solar panels, charge controllers, batteries and inverters cost me 19 cents per kilo watt hour to generate, store and use my very own electricity pro-rated over 25 years. PG&E charges anywhere from 28 cents to 40 cents per kilo watt hour depending on the time of day. I still have my utility hook up for cloudy days or when I need a little extra, but I no longer pay the average $200.00 per month electrical utility bill but now just save up $100.00 per month for the needed replacement batteries when the time comes to replace them.
“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.”
This proposal is worse than Communism. Leave it to California to come up with such a stupid idea.
“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.” . . . GOOD LUCK! The CPUC is a corrupt organization. . . https://www.sfpublicpress.org/how-california-utilities-commission-undermines-the-public-records-act/
I Have just signed an agreement with a local solar company an awaiting installation. I have been advised this could take 12 weeks. I am very concerned that the PUC will approve NEM 3.0 before installation. How can that approve this “tax on the sun”? Only in CA😡
Don’t worry, you not only will get the new 30% tax credit, but the CPUC is up against a very liberal, pro-rooftop solar legislature and a Governor that stood in front of the Zero Net Energy Center, in San Leandro, California, and said he is for Rooftop Solar. Any changes would be gradual and not detract from the good thing you are doing for your energy usage, your neighbors daytime usage, and for our planet.
I would be really upset if NEM 3.0 applies to existing installations at any time (including after a certain grandfather transition grace period in the future). When we signed up for a big expensive solar contract, the long term economics were factored in (savings over 20+ years). How can the state play this bait-and-switch game for green energy and change the whole economics for someone who got an install under false promises of a certain economics calculation, and had no idea that changes could be coming? They better allow indefinite duration grandfathering of existing installs or else a lot of people will be very pissed.
Because the Federal Government does Bait and Switch all the time. We were taxed on all the money we put into Social Security at the time we paid into it and for 60 years it was tax free money when we took it as benefits. Congress changed that and now charges you income tax when you take your money out also as you draw those benefits in your old age. Double taxation is not fair, but it is being done. This is why you need to do everything you can to cover your own investments by being able to take your solar system off-grid if necessary. Can you imagine paying $64.00 per month, for the rest of your life, because you have to pay a size of solar panels system fee? In just 25 years, the fee alone would be $19,200.00 out of your pocket going into the pockets of those billionaires who own the utility. An off-grid system, not connected to the grid, would have no fee and just think off all the batteries you could buy with $19,200.00 after the 30% tax credit that does not have to be connected to the grid to qualify for.
Edward, this is not true: “We were taxed on all the money we put into Social Security at the time we paid into it…” Social Security is taken out of our pay BEFORE income tax is calculated so we’re not double-taxed on it.
Look at your paycheck stub and you will see the SS as well as SDI, Union Dues and State income taxes, medical insurance plus your federal income tax are all deducted but it does not tell you how they are figured out. Then look at your W2 you get at the end of the year, and you will see that the Total Earnings, including all of the deductions they took out, are taxed. You have to file a tax return to get a credit or deduction on schedule A, for State income Taxes, SDI, Union Dues but there is no credit or deduction for the Social Security part. You pay income taxes on that. In 1969 I called the IRS and asked them where I could deduct the Social Security contribution and they said I could not because I would get the money back “TAX FREE” when I retired. It was true in 1969 for someone retiring then but not in 2022 where they tax you going into the program and tax you when pulling your money out in retirement benefits if you make more than $25,000.00 per year. Social Security was like the Roth IRA where you pay after tax money into the Roth, and it grows “TAX FREE” because Congress says it will. But what if congress puts and income test to Roth IRAs like they did Social Security? Congress can re-write any law and it can benefit or detract from the current law. Look at the capital gains Federal income tax rates have changed 3 times in my lifetime and could change again.
I guess you’re right Edward. I hadn’t looked at that before. And even with all that, they say the fund is still running out in not very many years. I imagine they’ll do something to shore it up before that but if it’s done by cutting SS payments, it’s going to hurt a lot of people – not exactly what’s going to get politicians reelected.
I have solar a 20kw system. If Nem 3.0 passes, we plan to disconnect from the city grid completely and go fully off grid in a well populated city we live in. I will need to buy my own batteries. But I rather do this then pay these dystopian CPUC solar taxes and fees.
Is this what CPUC really wants? For solar owners to disconnect from the grid? We will no longer be supporting the PG&E grid. No longer providing the extra power generation that benefits the grid and everyone.
The whole point of Nem is to make home owners go solar and provide a public benefit of a decentralized power grid, regardless of what PG&E thinks since they are a company and are driven by profits. PG&E doesn’t believe in rooftop solars and will keep pushing for centralized power generation since they can buy power for 3 cents or less.
If CPUC gives into PG&E influence over rooftop solar with it’s proposed NEM 3.0. Then we might as well dismantle NEM and call it a complete failure. Solar owners are much better off going completely off grid and fend for our own energy.
Anon – I agree and that’s what I did already.
If NEM-3.0 passes but you are grandfathered into the NEM-2.0 for at least 15 years or the duration of your contract with the utility, then wait on the batteries since you would need to re-build your system from scratch to incorporate batteries and re- wire the parts of your home you would power with them.
In 2007 I started building my off-grid system and completed it in 2018, a little bit at a time, and moved lights and appliance over to it, and off the grid, until only the refrigerators and major 220-volt appliances were left to hook up. I then hooked them into my Tesla Solar Glass Roof since 220-volt appliances can be replaced by 110-volt convection ovens, 110-volt microwave ovens, 110-Volt induction plate cook tops and the electric dryer wan be replaced by a clothesline. I could then bank up the extra summertime power for wintertime electric heating and end the use of my 50-year old inefficient and dusty forced air gas furnace.
Consider first building the battery system that will power your off-grid home and use the cheapest lead acid batteries on the market to start with. They can be changed out later with Lithium Iron Phosphate ( LiFePO4 ) batteries when the prices come down. Use the excess power produced from your existing solar panels using 12-volt battery chargers hooked up to time clocks from 9:00 AM to 4:00 PM daily and start by running a few lights and appliances with them through a 3,000-watt pure sine wave 12 volt to 120 volt off grid inverter. Add a few ground mount solar panels with charge controllers to help with the charging and keep everything at 12 volts DC to start with for safety and much of the RV world already has 12-volt DC appliances and lights you can purchase on-line. This way, you can see all the extra work and costs of batteries are compared to the paying of the fees or lower compensation the utility is allowing.. and see if it is worth it to totally convert to off-grid.
Wait until you see the extra taxes piled onto mandated electric vehicles. The green state taxes the good people of the state again. Green is not for the environment. It is for excess profits to the utilities and excess taxes to the state.
Nobody explained why a state that drills and refines gasoline in state costs more than any other state in the US. The oil companies get less greedy when they cross the state line?
Soon enough, they will send people around to siphon your gas in the name of the environment.