From pv magazine USA
California, once a leader in residential solar, is feeling the effects from unpopular policy changes like the introduction of Net Energy Metering (NEM) 3.0 and more recent market rate cuts for rooftop solar generation by renters, schools, and farms.
The two policy changes cut compensation rates for exporting local, clean solar generation to the grid by about 75%. State regulators said the change facilitating was a necessary evolution in the grid, but opponents argued that the move was a thinly veiled move to protect the profits of major utilities.
“We are launching the solar and storage industry into the future so that it can support the modern grid. The new tariff promotes solar systems and battery storage with a focus on equity,” said the California Public Utilities Commission (CPUC) upon passing NEM 3.0.
“The CPUC’s final proposal is a loser for California on many levels. For the solar industry, it will result in business closures and the loss of green jobs. For middle class and working-class neighborhoods where solar is growing fastest, it puts clean energy further out of reach,” said the California Solar and Storage Association (CALSSA).
Which prediction came true?
Unsurprisingly, gutting the return on investment for solar for homeowners, renters and small businesses in California did not encourage installations.
Utility interconnection request data shows that solar sales have fallen between 66% and 83% year-over-year following NEM 3.0.
What’s more, there have been massive layoffs industry wide. CALSSA said over 17,000 solar jobs have been lost in 2023, representing 22% of all solar jobs in the industry.
Based on interviews of residential solar installers across the state, CALSSA found that 59% of installers expect more layoffs ahead, and 63% expect to have cash flow issues over the next three quarters. About 70% expressed concern about their business outlook, while 43%, or about 300 businesses, said it will be difficult to remain in business.
To meet its clean energy goals, California needs to install 3.5 times as much solar and seven times as much energy storage as what is cumulatively installed today. With minimal demand, layoffs and business closures, it will be very difficult to meet these requirements.
CALSSA said that short of reversing the decision altogether, there are a few things CPUC can do to repair the damage done. First, it recommends rejecting the Income Graduated Fixed Charge proposed by utilities that would assess minimum bills on all customers, regardless of whether they pull electricity from the grid or not.
Other recommendations include:
- Simplify AB 2143 (Carrillo) to protect small businesses installing solar and storage
- Do not limit licensed solar contractors from installing solar + batteries
- Launch The Million Solar Batteries Initiative: Create new, massive investments in energy storage for all consumers (low-, working-, middle-class and non-residential consumers).
- Cut red tape
- Eliminate interconnection delays and establish penalties for utility non-compliance
- Simplify permitting at city and county level by fully implementing SB 379 (Wiener)
“CPUC commissioners claimed their decision was about ‘launching the solar and storage industry into the future.’ Instead, they caused the nation’s largest-ever loss of clean energy jobs, pushed once thriving businesses out of the state or into bankruptcy, and derailed California’s fastest and most accessible path to a clean energy future,” said Bernadette del Chiaro, executive director of CALSSA.
Watch the October 2023 pv magazine USA Roundtables discussion of the California rooftop solar and storage market, including commentary from del Chiaro and other market experts below:
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Everybody knew net metering was going to be a disaster. Everything California does, ends up with many more drawbacks than benefits.
California is light years ahead of the rest of the US in many ways, (efficiency, certainly, & renewables in some ways). Texas leads in some aspects, but as in California the insane rulers of the intertwined establishment fossil fuel industries & the governments they essentially own are trying to quash renewables by every means available to them. Your comment is more indicative of your hatred of progressives than any correct assessment of results.
Net metering is a necessary way to encourage solar energy & pay back people willing to do it, for their enormous contribution to the state, country & global civilization. There is no amount big enough to fairly reward people for adding solar energy that doesn’t require transmission, or for organizing to stop fossil fuels ICEVs, & other existentially destructive practices.
Too long didn’t read it, California is going broke.
That is the reason I did not put a solar roof. The installers never tell you the price the utility will pay for the excess coukd change in the future. I heard stories that they would limit payment to a 10th of their market rate. If you install a solar roof have the installer make a worst case scenario and you will see it will take 30 years to break even. No thanks.
Between the governor and CPU have single handedly ruined the solar system. I just wish that there was a way of ridding ourselves of the CPU. Forget the governor his career will be short lived once he leaves office. He by far is the worst governor that the state of California has ever had. The only winners here are the utility companies, for by having the CPU in their back pockets, have guaranteed a huge profit for them.
Let’s be real our Government is bought out from the State to the National level politicians are not honest as long as they can make profits off the American people’s backs! Solar is groundbreaking from being overridden by the Utility Companies who lobbyists and pitch their poison to our governments at the local and National level always making sure Big corporations are Billions sound and leaving the working class behind purposly. We the People need to Clean up and get people who cannot be bought out we need laws to protect the people and a balance between the entities so jobs don’t suffer at any level unless bad businesses are being done. I have solar and batteries I can see it does work, but I can’t get PTO (Permission To Operate) denied 3 times by Xcel Energry stating the the wiring is not correct but our local inspector gave it two thumbs up approval… What is the crap going on? because the installers and Utility Companies are not aligned purposely to keep the Utility making their big dollars… Damn! The Sun is Free and Solar does work to eliminate the Utility Companies from stealing our hard-working money… The Sun is Free Damn it!!! Just like the air we breathe is FREE!!!.
The biggest problem in California (and the rest of the US, in general) is that, in most cases, the electricity suppliers are private monopolies. Pg&e, for example, have the media spin”we love solar” but what they really mean is they love *their* solar and they want you to buy it from them and not for you to generate your own.
The next lie is to insist you change your heat from gas to electricity. They will then raise the cost of your electricity. The state is in bed with the corporate boards and shareholders. None of them care about you.