“We have the technology to harness the sun to light our homes with solar and we need more solar in our neighborhoods, not less,” said Sonja Robinson, program manager for the Protect Our Communities Foundation, to supporters who gathered in front of St. Stephen’s Cathedral Church of God in Christ.
A vote on an update to net energy metering regulations is scheduled for Dec. 15 by the five members of the commission, known as the CPUC. If approved, the rules change would affect the 1.5 million Californians who have installed solar on the roofs of their homes and businesses.
It’s been six years since the rules were last updated and the new iteration has been colloquially called NEM 3.0.
A CPUC administrative law judge issued a proposed decision released last month that is now before the commissioners. The 241-page proposal would compensate new rooftop solar customers at the “actual avoided cost” of the excess energy their systems send back to the grid, instead of the retail rate which is much higher.
The California Solar & Storage Association has estimated the decision would reduce compensation by about 75 percent and since rooftop systems can cost tens of thousands of dollars, they also say the “payback period” will be extended to such a degree that customers will have less incentive to make the investment in rooftop solar.
“We’re advocating that people get paid 100 percent of the power they’re generating,” said Peter Sloan, campaign coordinator for SanDiego350, an environmental group. “That’s what we’d like to see and we’ll keep pushing for the best possible outcome and we’ll see what the CPUC decides.”
The state’s investor-owned utilities such as San Diego Gas & Electric don’t like the proposal, either — but for the opposite reason, saying it does not go far enough.
The power companies have long argued that the growing number of rooftop systems leaves customers who don’t have solar paying an unfair share of the fixed costs that come with maintaining the electric system — things like wires, substations and transformers.
An earlier proposed decision in December 2021 called for creating a fixed charge of $8 per kilowatt on the solar systems of residential customers to address what’s called the “cost shift.” With typical rooftop installations being 5 to 6 kilowatts, that would have come to about $40 to $48 per month but the provision met with furious opposition from solar advocates and last month’s proposal eliminated it.
Matt Baker, director of the Public Advocates Office, the independent arm of the CPUC that looks to keep ratepayer bills as low as possible, says the proposed decision is a good one and the commission should approve it.
His office particularly likes the proposal’s incentives to pair solar systems with batteries, which allows rooftop customers to store solar during the day when California already has an abundance of energy on the grid and then discharge those molecules in the evening when the grid is most in need of them and help displace natural gas.
Changing NEM compensation to “actual avoided cost” will make solar more valuable at night, which Baker said will result in a payback period in the SDG&E service territory of about four years for solar installations that are paired with storage.
NEM 3.0 “is about the future and it’s about creating incentives so that we can have a future with solar and batteries and do it efficiently,” Baker said.
The CPUC estimates the proposal would save an average residential solar-plus-storage customer at least $136 a month.
If the proposal passes, its provisions would go into effect in 120 days, or April 15, and will affect new solar customers.
As for its effect on existing rooftop customers, that’s a bit complicated.
Solar customers who had their systems installed under NEM 1.0 and NEM 2.0 would still get compensated at the retail rate for 20 years from the time their systems were installed before getting switched to a system that would be based on avoided costs.
For example, a current NEM customer who had a system installed in 2018 would still get credited at the retail rate until 2038. But after that, the customer would be credited at the avoided cost.
It will take a majority vote of the five commissioners to adopt the proposed decision.
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