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California lowers incentives for rooftop solar panels

REGION — The California Public Utilities Commission released new rules for the rooftop solar industry earlier this month, reducing the overall compensation to new customers by about 75% and changing how energy subsidies will be applied in the future.

Net energy metering, or NEM, allows solar customers to earn credits for generating extra power for the grid. The program was commissioned at least 25 years ago to spur mass adoption of rooftop solar.

In 2013, state legislators required the agency to reform the NEM program due to massive cost shifts from rooftop solar owners to property owners unable to install solar panels.

The agency’s Dec. 15 decision, known as NEM 3.0, aims to bolster grid reliability, control electricity costs and solar battery storage. The overhaul will significantly reduce net metering compensation rates for new California solar customers.

The agency will also set aside $900 million in incentives — $630 million for low-income residents — to help adopt rooftop solar.

Under the new guidelines, solar customers will save $100 per month on average and at least $136 per month for battery storage customers.

The new policy has no impact on existing rooftop solar customers and maintains their current compensation rates, according to the agency.

The agency’s decision to exclude existing solar customers from NEM 3.0 was promptly criticized for continuing to embrace the “unfair” cost shift onto non-solar customers.

“The CPUC missed an opportunity to fix the very, very unfair cost shift associated with the rooftop solar subsidy program,” said Kathy Fairbanks, spokeswoman for Affordable Clean Energy for All. “One of the biggest holes in this decision is that no one who has solar right now is affected by the changes. So, 1.5 million customers will continue to generate a $4 billion cost shift every year.”

For example, at least $3.4 billion was shifted from solar customers to traditional (non-solar) ones last year.
NEM 3.0 won’t launch until spring, allowing residents to secure the older rates for 20 years if they apply through April 13, 2023.

State Sen. Scott Wiener (D-San Francisco), a longtime proponent of rooftop solar, complained the agency’s latest move was “tone deaf and just bad.”

“In its never-ending war against distributed energy generation — here, rooftop solar — the CA Public Utilities Commission slashed by 75% the credits solar owners get for excess energy produced,” Weiner wrote on Twitter. “This means less rooftop solar when we need more.”

The state is going all-in on solar and wind production to eliminate fossil fuel power plants, such as coal and natural gas, and meet its green energy mandates.

According to the California Energy Commission, solar (power plants and rooftop) was 17.31% of California’s in-state generation, producing 33.6 gigawatt-hours.

As for the residential cost, many homeowners have said they pay as little as about $50 per year after installing solar.

Fairbanks said that the money needed for upgrades and maintenance to transmission and distribution lines, facilities, wildfire mitigation and prevention is not covered by solar customers.

So, utility companies pass those costs onto non-solar customers.

“The new customers who are bound by the NEM 3.0 requirements will continue to generate a cost shift, although not as big as the current one,” Fairbanks said. “People who don’t have solar — people from disadvantaged communities, renters, seniors and anyone on a fixed income — will continue paying hundreds of dollars per year to cover the costs for those who have rooftop solar.”

The NEM 3.0 program also seeks more battery storage to combat energy blackouts similar to those that ravaged several California cities last summer due to a lack of power generation. Residents with batteries can sell stored electricity back to the utility companies to boost the grid during stressful times.