California regulators approve net metering 2.0

A long and contentious process over the future of net metering came to a close this morning in San Francisco, with the California Public Utilities Commission (CPUC) voting 3-2 in favor of a Proposed Decision for a successor program to net metering which was produced the previous afternoon.

The decision preserves many of the basic features of retail-rate net metering, and rejects utility attempts to change the program in ways that would significantly weaken the economics of customer-sited solar. The new program will begin in July 2017 or as soon as net metering caps are reached in the service areas of the state’s three large investor-owned utilities.

California Solar Energy Industries Association (CalSEIA) estimates that net metering caps will be reached in San Diego Gas & Electric Company’s (SDG&E) service area in April and in Pacific Gas & Electric Company’s (PG&E) service area in August.

Utility customers who own PV systems at their homes or businesses will receive retail-rate credits for the electricity they generate, minus “non-bypassable” charges of around US$0.02 per kilowatt-hour, which CalSEIA says is a workable solution. These non-bypassable charges will also be applied to virtual net metering systems.

PV system owners will also move to mandatory time-of-use rates in 2018, except San Diego customers, who will have a five-year period to transition from tiered rates. This will not affect businesses and farms which participate in net metering, as such customers are already on mandatory time-of-use rates. Finally, the commission imposed a $150 application fee for new customers in the program.

“It’s hard not to feel good right now in California,” CalSEIA Executive Director Bernadette Del Chiaro told pv magazine. “It was a 3-2 vote and a real nail-biter, but at the end of the day California just protected net metering and that’s huge.”

Consensus from the solar industry is that while the decision is a step down from the earlier program, that the market will still be able to move forward. “While today’s decision is a compromise that will require the solar industry to adapt, it rejects the utilities’ anti-solar proposals and continues California’s renewable energy leadership,” said Bryan Miller, senior VP of public policy and markets at Sunrun and president of the Alliance for Solar Choice.

Given a strong push by utilities, the decision was a hard-won struggle. Vote Solar Initiative mobilized California residents in a number of actions including a petition drive which delivered over 130,000 petitions to the CPUC, and the group cites the broad support and civic engagement for the outcome.

"This issue set records for citizen participation before the commission,” says Vote Solar Executive Director Adam Browning. “Californians overwhelmingly spoke in favor of continuing strong solar policies. Environmental justice organizations, communities of color, tribes, farmers, faith leaders, educators and even the Office of Ratepayer Advocates spoke out to maintain fair net metering credit and keep California solar shining."

The policy will be reviewed in 2019, and in the interim CalSEIA notes that there will still be issues around rate design.

“Our work is far from over,” says Del Chiaro of CalSEIA. “The fight now shifts over to these rate structures, and what time of use looks like, and how can we manage within a mandatory time-of-use world.”