The Details: CPUC’s 2022 Updated Solar Net Metering Proposed Decision
Background
Governor Newsom’s California Public Utilities Commission (CPUC) issued its updated proposed decision in the net metering proceeding on Thursday, November 10th, 2022, almost a full year after the first was released. Net metering is a foundational clean energy policy that allows customers with onsite solar to save on their electric bill by receiving a credit for the excess clean energy they send back to the grid. The popular policy has helped propel California to the national leadership role it holds in rooftop solar adoption, with over 1.5 million solar roofs installed statewide.
The CPUC, which regulates the state’s investor-owned utilities, opened a proceeding to update net metering in August 2020. Stakeholders submitted and debated a range of proposed policy changes for how to keep rooftop solar growing and at the same time make rooftop solar generation more valuable to all utility ratepayers. The CPUC issued a disastrous proposal in December 2021, which was met with fierce opposition from the general public, environmental organizations, celebrities, and the solar industry. In response, the CPUC withdrew its proposal, accepted additional comments, and issued this new proposal last week after the 2022 Midterm election had completed. Vote Solar was a stakeholder in the CPUC proceeding in 2021 and 2022 and has played an influential role in shaping NEM policy in California for over 15 years. The CPUC will take stakeholder and public comment through their website, email, physical mail, and phone line on the updated proposed decision for at least the next 45 days, including oral arguments from parties that occurred on Nov. 16th and a final vote expected in late 2022.
Problematic Elements of the New Proposal
The complex new proposal does not effectively support low-income and other disadvantaged communities who wish to adopt solar and benefit from the same bill savings and local environmental benefits that many other Californian’s have received. The proposal both narrowly defines who qualifies as low-income and fails to acknowledge the true additional costs these customers face when going solar. Specifically, more than 2 million customers have household incomes below 80% of the area median income (AMI), but do not qualify for low-income incentives under the CPUC’s definition. In addition, we know installing solar for low-income families comes with extra burdens, and not capturing those within the cost of solar results in a much lower cost than is realistic in California. The CPUC used the same cost of installed solar ($3.30 per watt) for low-income as for all other households, when the real cost is closer to $4.28 according to the July 2020 Disadvantaged Communities Single Family Affordable Solar Housing Semi Annual Progress Report. This will result in longer payback periods for low-income households, who already face burdens in accessing solar and seeing the benefits.
“The biggest thing I see that we’re still not grappling with is access for low-income and disadvantaged communities,” Sachu Constantine, Vote Solar’s Executive Director, said in an interview with the LA Times.
The proposed ‘glide path’ which is a step down in the export rate amount solar customers will receive when they send solar back to the grid, is intended to help transition the solar market to this new policy paradigm but includes a sudden and significant initial reduction in value of solar exports. This combined with the inadequate low-income solar assistance provisions hinders rooftop solar expansion at a time when the federal government has committed to monumental investments in clean energy progress.
Further, the proposed diminished export rate minimizes savings for all rooftop solar customers, especially low-income families whose energy bills account for a larger portion of their income. In effect, the proposed decision would create considerable barriers for millions of low-income families who already face additional barriers in considering rooftop solar.
Improvements to the PD
The proposal does reject a solar fee, includes a glide path for the solar export rate, and refrains from infringing on customer’s behind the meter consumption, all improvements over the last PD in December 2021.
While changes are clearly needed to the PD to reach a fully supported transition to a solar and storage market in California, the improvements do show the CPUC is thinking in the right direction on some of these ideas.
What you can do
Vote Solar is encouraging its members to call on the CPUC in written comments to expand the definition of who is considered low income and adjust the solar costs to ensure that everyone, especially our low income and disadvantaged families and neighbors, have access to solar and storage. To reach our climate goals in the state over the next few decades, we need solar to grow, and providing more opportunities for people to put solar on their roofs along with the wider range of solutions California is embracing, will allow us to get there.