CA Utilities Want to Replace Net Metering With… What?

Recent filings at the CPUC make it crystal clear that California’s big utilities want to put savings for future rooftop solar customers on the chopping block. It has been evident for years that many big utilities are trying to stall rooftop solar growth because they see it as a threat to their old way of doing business. But now, PG&E, SCE and SDG&E are finally being clear about what they want the future of solar customer compensation to look like—and it’s a disaster.

Substantial group of rally participants for solar

As context, let’s remember that net metering, the current policy in California and over 40 other states, is proven as an effective way of giving solar customers fair, full credit for the clean energy they produce and send back to the grid for others to use. When a customer produces more solar than she can use, her meter runs backward—it’s that simple. Net metering is a big reason why we have more than tripled the amount of rooftop solar in California since 2011 even as solar incentives have essentially ended, and why average installed rooftop solar costs in the state have dropped by over 50% since 2009. But by the end of this year, the CPUC must decide how to compensate customers of the three utilities who go solar after the utilities hit their current 5% program cap in 2016 or 2017. So what specifically have the utilities proposed?

The details vary, but common themes include unfair new fees and lower credit rates that do not adequately compensate customers for the valuable solar power they deliver to the grid.

In a nutshell, PG&E proposes:

  • requiring future solar customers to go onto a time-of-use rate, when this would be optional for other customers,
  • crediting solar customers for their excess clean energy at a rate far lower than full retail – specifically, at a time-differentiated rate that PG&E estimates will average $0.09/kWh,
  • adding a new monthly demand charge for residential solar customers of $3/kW. PG&E estimates this new fee for an average customer at about $13.50/month,
  • requiring solar customers to pay new interconnection costs of $100 or more,
  • changing the netting period, i.e. how long solar customers can carry bill credits forward, from yearly to monthly. In other words, for any excess bill credits in a hot summer month, the customer would get paid about $0.04/kWh, instead of being allowed to carry the full retail credit forward to use it in a future month, and
  • ending virtual net metering – which allows Californians in multi-tenant properties to access bill credits from solar on their shared roof – in all cases except for low-income communities.

SCE proposes:

  • crediting future solar customers for their excess clean energy at a flat rate of $0.08/kWh,
  • adding a new monthly fee for residential solar customers based on the size of the customer’s solar array, at $3/kW. For a residential customer with a 4 kW solar array, that would be a fee of $12/month, and
  • requiring solar customers to pay new interconnection costs of $75 or more.

SDG&E proposes:

  • requiring future solar customers to choose from one of two options: either a buy all-credit all arrangement where all solar generation is conveyed to the utility for a fraction of the retail rate, or a new rate that will include a monthly system access fee of about $21/month for residential customers and $69/month for small commercial customers, and a shockingly high monthly demand charge of $9/kW,
  • requiring solar customers to pay new interconnection costs of $280,
  • like PG&E, changing the netting period, i.e. how long solar customers can carry bill credits forward, from yearly to monthly, and
  • ending virtual net metering, requiring instead the buy all-credit all arrangement at a fraction of the retail rate.

All these new solar fees and complex rate proposals are enough to make anyone’s head spin. The bottom line is that each and every one of the utilities’ proposals would cripple continued solar adoption in California. If utilities succeed in making solar a bad deal for Californians, we lose out on a major opportunity to improve community health and combat climate change during an era of historic drought and runaway wildfires. We put the livelihood of the more than 54,000 Californians currently employed in solar at risk. And we take away the ability of families, local governments, schools and businesses to save on their energy bills through solar power.

That’s why diverse stakeholders – social justice organizations, the faith community, local government officials, educators and more – are all joining together to urge the PUC to stand strong for net metering and keep expanding solar access in our state.

We know that Governor Brown and leaders at the CPUC want to keep moving forward, not backward, on growing rooftop solar in the Golden State for all these reasons and more. The three major utilities clearly have a very different agenda—but what rooftop solar has is overwhelming public support. Sign the petition to urge our leaders to protect net metering and continue to build on California’s great solar success story.

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