REGION — The California Public Utilities Commission continues to deliberate rooftop solar reform, targeting the industry’s popular and controversial net energy metering program, resulting in one of the agency’s most anticipated rulings in years.
The net energy metering, or NEM, program was initiated 26 years ago to spur mass adoption of rooftop solar. As a result, more than 1 million homes in California now have rooftop solar.
However, once the state regulatory body announced submissions for rooftop solar reform early last year, many in the industry drew lines and prepared for battle. The CPUC released its draft proposal in December and those advocating for rooftop solar saw it as an attack on the industry, adoption and ability to meet the state’s climate goals.
Reform advocates said the proposal didn’t go far enough, while others believed it was a good start to combat the $3.4 billion cost shift and to allow more opportunities for low-income homeowners and renters.
Alex Williams, of Solar Energy Partners in Oceanside, said while some reforms are needed, rooftop solar is the best way forward. Williams acknowledged the need to address the cost shift and some reforms, while others in the solar industry have not.
“It’s a great sign for the consumer, for me,” Williams said of the delay. “Where’s the value going to land? It’s indisputable that solar creates a ton of value. The question is who captures that value? Are we going to allow the utility companies to take all the value and profit from solar or are we going to allow the customer … to participate in it.”
The NEM program offers customers a much cheaper option to owning and paying utility companies through subsidies.
Haney Hong, CEO of the San Diego Taxpayers Association, recently revealed in an op-ed in the San Diego Union-Tribune his total bill for 2021 was just $56.56. He said he was floored at how little he had to pay San Diego Gas & Electric.
Part of the NEM program is those who install rooftop solar are paid a retail rate of about $0.31 per kilowatt-hour of excess electricity from SDG&E. The utility, along with others in the state, has long complained the retail rate is too excessive and shifts the burden of fixed costs — grid upgrades, wildfire mitigation and others — onto those without rooftop solar.
CPUC’s proposed decision exploded as celebrities and politicians, including NBA legend Bill Walton and Gov. Gavin Newsom, voiced their opinions for the state utility agency to step back and reconsider the proposal. While the effort seemed to work, Kathy Fairbanks, of Affordable Clean Energy for All, said the delay was mostly due to the seating of two new commissioners appointed by Newsom.
Hong, meanwhile, said he wrote his op-ed piece to show there is a problem with the current NEM structure. He said it’s not fair for him and others with rooftop solar to pay pennies on the dollar compared to low-income customers and others without solar.
“Like most things in public policy, they are much more complicated and different once you look under the hood,” Hong said. “Once you start to look under the hood with solar, you find some interesting things.”
According to Hong, some of those “interesting things” are unintended consequences of the NEM program’s incentivization. The rate structure includes $0.20 of every dollar of a non-solar customer’s electric bill is financing rooftop solar customers, Hong said, while citing studies from Berkeley and elsewhere.
Hong believes CPUC is not going far enough with rate reform, and once a hearing is set, Hong and the San Diego Taxpayers Association will support such action.
“You go into solar because you’re trying to escape the growing rates,” Hong said. “The pressures keep pushing rates up. That happens because we keep asking for things. We want more solar, we want more wildfire (mitigation). That cash has to come from somewhere.”
Williams noted the NEM program established early on that if it gave the customer value, they would adopt solar. But if it’s pushed to the utility, the consumer will not adopt.
The Public Utilities Commission of Nevada stopped its NEM program several years ago for similar reasons and issues currently facing California (Nevada has since relaunched its NEM program to help implement a state law)
Williams said in Nevada, the utility regulatory authority pushed the value back to its side of the meter, which crushed the state’s solar industry. However, Williams believes CPUC understands the value should instead be proportionate and favor the customer, not the petroleum industry, which already receives large subsidies.
“I think that the utility deserves and needs to participate in some of the value, but they need to be able to fan some of that value to the customer as well,” Williams added.