Protecting Rooftop Solar & Net Metering in California

Today saw a major victory for solar choice in San Francisco. After many months of deliberation, the California Public Utilities Commission (CPUC) voted to adopt new rules that uphold net metering for future solar customers of the state’s large investor-owned utilities (IOUs). The decision, put forward by CPUC President Michael Picker and approved by the Commission in a 3-2 vote, represents a balanced path forward that will support consumer savings, local jobs, healthier communities and climate progress.

Solar roofs in San Francisco
Photo Credit: Solar Tribune

As any of you regular Vote Solar blog readers will know by now, understanding how solar’s benefits and costs fit into our changing electricity system is complex and groundbreaking stuff. Today’s decision was the result of a thorough Commission-led stakeholder process from the state that knows solar best, our nation’s largest rooftop solar market by a long shot, and we hope other states will take note. Here are some key elements of the decision:

  • Rejects demand charges, fixed charges and standby charges proposed by the utilities and the Office of Ratepayer Advocates that would apply only to solar customers, and finds that none are reasonable or cost-justified.
  • Upholds net metering for customers who go solar in 2016 and beyond. That means future solar customers who send excess clean energy back to the grid to be sold to their neighbors will continue to receive a kWh-for-kWh credit for that energy (though they will also pay some new charges on those exports too– see below for info on new non-bypassable charges).
  • Ensures that customers who go solar under the new net metering tariff can stay on that tariff for 20 years from the date their solar array is interconnected – which is key for reducing customer uncertainty around future policy changes. The Commission will review the net metering rules again in 2019, but any changes would not apply to customers who have already gone solar before that date.
  • For the first time, extends eligibility for the new net metering tariff to customer-sited facilities larger than one megawatt in size, so long as the customer pays all interconnection and distribution system upgrade fees.
  • Removes a utility-imposed roadblock to virtual net metering in multi-tenant buildings, requiring that the utilities’ virtual net metering tariffs must allow one solar array to serve multiple service delivery points in multi-tenant buildings.
  • Establishes a Phase 2 of the proceeding to develop new policies to expand solar access for residential customers in disadvantaged communities.

The decision doesn’t keep everything as it was under California’s current net metering program. Instead, it makes a few compromise changes that will apply to customers under the new IOU net metering program:

  • Requires solar customers to pay non-bypassable charges on all the energy they consume from the grid, regardless of how much clean energy they export back to the grid. We consider it reasonable that solar customers contribute in this way to public purpose programs, like energy efficiency rebates and rate subsidies for low-income residential customers. These new charges are expected to add approximately 2-3 cents per kilowatt hour for energy exported back to the grid, equivalent to about $6-8/month for an average residential solar customer.  (The Commission removed two categories of charges from the list included in the December proposed decision, following clean energy advocates’ argument that rooftop solar reduces the need for new transmission and new large-scale power plants.)
  • Puts a small interconnection fee in place to ensure that customers cover the costs to the utility of plugging into the grid, another reasonable compromise. The amount of the fee may only include the following Commission-approved utility costs: Net Metering Processing and Administrative Costs, Distribution Engineering Costs, and Metering Installation/Inspection and Commissioning Costs.
  • Requires all residential customers who go solar under the new net metering tariff to take service on a time-of-use (TOU) rate schedule, meaning rooftop solar generation will be credited more during times of peak electricity system need. (Note: current NEM customers will be able to stay on their rate design plans) We commend the Commission for moving towards TOU rates, which if properly designed empower customers to respond to price signals, and which demand charges or other fixed charges largely fail to do. Vote Solar will work with the Commission to help shape future TOU rates that are fair for solar customers, and we will strongly advocate for programs that begin to shift load, with the help of demand response, storage and other innovations, to the hours when solar produces most energy.

There are ways we think this decision could have been even stronger, but all in all the CPUC has provided a solid foundation for keeping rooftop solar growing in California. In doing so, the CPUC has stood strong against intense pressure from the state’s three powerful utilities — PG&E, SCE and SDG&E — which have attacked net metering for years and in the last few weeks even mounted a last-ditch, inside-outside campaign to weaken the Commission’s strong proposed decision. The CPUC also chose a markedly different path from Nevada’s Public Utilities Commission, whose recent decision to weaken Nevada’s net metering program has resulted in the loss of hundreds of local jobs and significant new costs for residents and small businesses that go solar.

Instead, the Commission stood with hundreds of social justice, faith, environmental, business, labor and health groups, schools and local elected leaders, as well as with California ratepayers from all across the state, who late last year delivered more than 150,000 petitions in favor of protecting net metering and expanding solar access — by far the most public input the CPUC has ever received on any issue. In recent months, major newspapers including the LA Times, San Francisco Chronicle and the San Jose Mercury News have all editorialized in favor of upholding net metering and continuing the state’s push on solar progress. Last weekend, rock legends Bob Weir, Sammy Hagar and Michael Franti joined the campaign, hosting a pop-up performance celebrating California sunshine that ended with a march to the CPUC steps in support of net metering.

Bob Weir, Michael Franti and Sammy Hagar #RocktheSun for California solar progress from Vote Solar on Vimeo. So the list of those to thank for today’s historic solar victory is inspiringly long. It starts with forward-thinking Commissioners and staff at the CPUC as well as Governor Brown, whose vision of leading the world in clean energy and climate progress this decision helps achieve. It includes all the clean energy and public interest advocates who worked tirelessly in the Commission proceeding to build the case for keeping rooftop solar affordable and expanding access to more Californians, and the many more community leaders for whom this was the first time they’d participated in a CPUC proceeding. But we couldn’t have achieved this victory without the hundreds of thousands of ordinary Californians who heard what was happening and spoke up for solar. Today’s vote really was a win for all of us – our communities, our state and our planet. Thank you!

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