REGION — Assembly Bill 1139, introduced to the California State Assembly by Assemblywoman Lorena Gonzalez (D-San Diego), will have significant impacts on the solar industry statewide and has left some feeling like they are being made out to be the enemy.
The bill, which was read for the third time Wednesday on the Assembly floor, received just 28 votes in support — not enough for passage, but more amendments are expected.
The bill focuses on net energy metering (NEM) rates paid to solar customers as credit for any extra energy their system produces and eliminates other benefits, such as recouping the customer’s original investment, that potential customers look for when choosing to install solar panels on their homes.
Michael Powers, co-founder of San Diego-based Stellar Solar, was there at the very beginning of consumer solar energy.
“At that time it was taking about 12 years to get a return on your investment because solar was still pretty expensive,” Powers said. “So if you bought a solar system, you could save enough on your electric bill through net metering within 12 years to recoup your investment. Now it only takes 5-6 years to recoup your investment.”
Essentially, the bill is purported to fix equity concerns. According to Gonzalez, non-solar customers, many of whom cannot afford solar panels on their home, pay upwards of $200 a year to their utility company to subsidize homeowners with rooftop solar.
Severin Borenstein, professor of business administration and public policy at the Haas School of Business and faculty director of the Energy Institute at Cal Berkeley, recently made public comments in agreement with Gonzalez’s analysis regarding the current state of solar.
“It has been well documented – and surprises no one – that households with solar are disproportionately wealthy, as well as disproportionately White,” Borenstein wrote in a blog post. “So, when a customer installs solar, their share of the fixed costs are shifted to other ratepayers who are poorer on average. Net energy metering hurts the poor. It’s that simple.”
But according to Powers, the biggest draw to households choosing to install solar, which is widely applauded as a way for individuals to fight climate change by reducing their carbon footprint, is the ability to recover their investment in a relatively short amount of time.
AB 1139 would make it much more difficult for homeowners to recover those costs in a timely manner.
“What they’re proposing with AB 1139 is to make it a 20-50 year payback because there are going to be these fixed charges,” Powers said. “That’s why we keep saying that these rules as they’re proposed would literally kill the solar industry as we know it.”
The solar industry, and Stellar Solar specifically, has been growing in recent years but Powers is concerned about what the passage of AB 1139 could mean to his business and the industry as a whole.
“We were really on a very good path for continued stable growth and then this bill seemingly came out of nowhere it seemed to us,” Powers said.
Bill Walton, former NBA star and “solar evangelist” for Stellar Solar, recently announced he is teaming up with California Solar Storage Association, solar consumers and environmentalists to actively oppose AB 1139, according to a recent release.
“The terrific, upward and dynamic trajectory of the solar, battery storage and electric vehicle industries has been the realization of a long time dream,” Walton said in a statement. “And now this potential reversal — from the state that leads the nation in solar? This is a travesty.
“This is my personal appeal to the California State Assembly, Senate, and Governor Newsom. Don’t be bullied by the utilities. This bill is not about the people, it’s about corporate greed and a profit grab.”
Another concern for the solar industry will come even if the bill is ultimately unsuccessful — there will still be fighting with the investor-owned utility companies who have proposed very similar rule changes to the California Public Utilities Commission.
“Even though we’re fighting this battle in Sacramento now, we’re going to have to fight the same battle with the Public Utility Commission,” Powers said. “The proposed rules are still awful whether they happen at the commission or the State Assembly.”
Representatives for Gonzalez did not respond to questions or interview requests for this story.