From pv magazine USA
California Assembly member Laura Friedman has introduced AB 2256, which would require the CPUC to fully consider the costs and benefits of rooftop solar when revisiting its net energy metering (NEM) tariff.
The bill would require CPUC to consider the total benefits of rooftop solar, including better local air and water quality, avoided land use impacts, and associated system cost benefits.
“The CPUC currently only considers some economic benefits of rooftop solar,” said a fact sheet on the bill. “As NEM is not simply a rate structure but rather, a far-reaching policy initiative with goals and outcomes that will shape the future of clean energy and climate change in California, it is critical for policy makers to consider all relevant information in re-designing the tariff that has proven integral to meet our climate goals.”
NEM helped California launch the nation’s leading rooftop solar market, achieving Governor Schwarzenegger’s million solar roofs initiative, and under NEM the state has since reached two million solar roofs.
The California Air Resources Board has projected that the state needs to double its rooftop solar to reach targets of 90% emissions-free electricity by 2035 and 100% by 2045.
California’s rooftop solar market has been screeching to a halt ever since the NEM 3.0 rule-making decision was implemented. The rate structure lowers compensation for exported solar production by about 75% and makes batteries an essential component of a residential solar project. This, combined with high interest rates, has worsened customer economics for rooftop solar, no longer presenting a cash flow positive investment in many cases, said installer HES Solar.
The California Solar and Storage Association (CALSSA) said about 17,000 jobs have been lost, demand for rooftop solar has fallen about 80%, and solar business insurer Solar Insure told pv magazine usa that 75% of its covered companies are considered a “high risk” for bankruptcy. Major publicly traded global equipment providers such as Enphase and SolarEdge have made significant cuts to their workforce.
The California Energy Commission (CEC) projects that the state will need to build 6 GW of solar-plus-storage every year for the next 26 years straight to meet the 2045 target. Over the past five years, California has only averaged about half of the 6 GW deployment figure. The state has averaged about 2.3 GW of utility-scale solar-plus-storage installations over the past few years, far behind the pace to reach that near mid-century goal of 100% carbon free power. CALSSA said the goal is impossible to reach with a utility-scale only model, which the state seems to be hurdling itself toward.
Save Solar coalition
Also this week, more than 60 organizations submitted letters to Governor Gavin Newsom, state legislative leaders, and the CPUC to call for immediate action to restore the state’s rooftop solar growth. The letter to the governor can be found here.
The coalition called out several requests for getting rooftop solar and storage back on track, including:
- First, make sure the state does no more harm. The first order of business should be to put a cap back on the fixed charges authorized by AB 205. High fixed charges discourage energy conservation and efficiency and further harm the economics of going solar.
- Second, delay implementation of the Virtual NEM and Aggregate NEM decision slated to go into effect February 14, 2024 and restore the ability of multi-meter properties such as schools, farms, apartment buildings, and strip malls to self-generate and self-consume on-site solar.
- Battery Rebates: In the Net Billing decision, the California Public Utilities Commission (CPUC) called for $900 million to be allocated for battery rebates for all types of consumers to help cushion the blow brought about by the reduced credits for solar exports. $280 million of those funds, earmarked for low-income consumers, were allocated in the 2023-2024 budget but unfortunately have not yet been disbursed. We call on you to ensure the CPUC immediately disburses the $280 million appropriated in the 2023-2024 budget for residential storage incentives. This funding can go to work immediately and expand the benefits of distributed clean energy to low-income Californians. Further, consider making a portion of these funds available immediately for the already-existing SGIP program that serves working- and middle-class families.
- In the 2024-2025 budget, fulfill the remainder of the $900 million in battery incentives and restore solar and storage funding delays proposed in your January budget. We understand there is a significant budget deficit, but these programs are critical to energy reliability, and delays are far more costly in the long run. If some of the $280 million in funds were allocated to the mainstream market, restore the low income funds to their original amount. Further, investing in solar and storage installations helps grow state tax revenue through solar sales taxes, business income taxes and payroll taxes from solar workers.
- Direct the CPUC to immediately re-evaluate the value of distributed solar and to fully and accurately value all the benefits of rooftop solar energy including societal benefits in the CPUC’s Avoided Cost Calculator.
- Unlock the solar potential of all rooftops in California. The state should encourage solar on large commercial rooftops that can accommodate larger installations by lifting the system size cap. Putting as much solar as will fit on all 66,000+ warehouses and 10,000+ superstores in California could power nearly 6 million homes annually but current rules limit that kind of deployment.
The requests were signed by Laura Deehan, Environment California, Roger Lin, Center for Biological Diversity, Bill Allayaud, Environmental Working Group, and many other California environmental and community leaders.
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What a joke.
Every net-metering proponent wants the grid for transmission and distribution when they need it, but none of them want to pay for it. Just want to pass the cost onto those who can’t/won’t do solar.
Californian electricity isn’t expensive because green or FF generation is costly (utility solar is 2-4 cents per kWh, which is way less than any rooftop installer will do). It’s because the grid is 60-80% of the cost of delivered electricity.
There’s going to be enough problems when batteries+generators soon get cheap enough to disconnect from the grid. No more gifts to inefficient residential solar.
What’s inefficient are long distance transmission lines and the built-in inefficiencies of the 100+ year old centralized-generation monopoly model.
NEM 3.0 was the beginning on the end for the solar industry in California. AB205, which was snuck in the trailer budget bill at the last second pulling the wool over most of the lawmakers eyes, was the final nail in the coffin.
With the current state, California will NEVER reach it’s climate goals.
It sounds like California has enough subsidized daytime grid tied solar. Once the grid is full and there is no storage that power is thrown away.
The genius of NEM was mobilizing homeowner investment in rooftop solar by providing an attractive rate of return. It’s a simple economic concept now beyond the ken of the CPUC, lost in the fashion of using electricity rates to redistribute income. The resulting mayhem was predicted, but doubling-down with income-based flat charges is the CPUC’s priority? Time for adult supervision.
ALL of these things are important to tackle. But the emphasis here seems to be on the disastrous new rules that have come after the NEM3 decision. Most important to me is reaching way back and correcting THAT. Then tackle these latest issues. We seem to be working at correcting only the latest problems, and forgetting about what started this freefall. NEM3 needs to be repealed.
Light drumming on the utilities commission, yass.
Good jobs Massachusetts 🇧🇷👍🏻
Laura,
Thank you for submitting AB 2256.
I’m an electrical engineering and an investor. I’ve worked in the solar industry designing hardware.
There are some economic disconnects with reality that are hurting both residents of California (solar owning and not) and the utility companies. Electricity isn’t priced correctly. This causes usage to be inefficient and drives up costs for consumers and makes generating power more costly for the utility companies.
I’m sure you’ve heard of the duck curve, https://www.eia.gov/todayinenergy/detail.php?id=56880. As you can see, there are times when there is no need for the utilities to generate any power. The law of supply and demand would dictate the pricing should be very low during that time. Allowing the law a supply and demand to function would mean adjusting the price so that people and businesses would see cheaper prices during the solar boom hours of 9am to 5pm. Due to the current pricing structure, I charge my EV from mid night to 5AM. This doesn’t help the grid. We, solar owners and not, should all be able to take advantage of the low electricity cost during the day.
The other advantage of allowing pricing to reflect demand is that it would make a more effective use of the generators on our grid. It is neither good for the utility companies bottom line, pricing for consumers, nor the environment given the resources that went into creating these assets to have them sit idle for a third of the day.
Please ask the CPUC to adjust the cost of electricity to customers to inversely match the demand. Bring NEM 2.0 back, but reimburse people for the retail price of power generation, not delivery. Have pricing adjust by the season, and on seasonal boundaries as consumer behavior changes.
This will create continuously adjusting incentives to make the grid more profitable for the utility companies to run, more cost effective for consumers to use, and a more efficient use of our limited resources.
So the solar industry can get back to making $$$$$$$$$. The industry is ripe with fraud and deceit at best end user gets sold a over priced system where the RIO runs longer the warranty. Worst end user now spending more then they were before they signed that contract to install solar. How many stories have seen on TV were a salesmen is telling people living on a fixed low income they are going to get a check from the IRS that will cover 30% of the price. When their tax is so low they don’t even file a tax return. The solar industry got away with it because they could shift the cost with high net-metering customer was happy paying no electric bill and could use the utility for battery storage. Utilities costs went up and now they no longer want to subsidize the solar industry. Install solar for $1 a watt and that is an honest price.
1. NEM 2.0 was a great way to get solar up on roof tops. Restore that, and
2. mandate support for V2G for the storage component. If EV owners could easily dial in what percent of their battery is available for grid usage, that solves the duck curve issue. (With appropriate incentives for use of their battery, of course).
3. Incentivize business owners and landlords to provide chargers (level 2 bidirectional) and
4. build out the supercharging network to make an EV as your only car practical.
This may not work everywhere, but in sunny states, I think it would be very effective (especially California).
Maybe if solar contractors gave honest pricing to install solar systems it wouldn’t need to shift so much to the utility. The main problem I see is solar contractors are selling the idea that a customer can shift the cost over the next 30 years then jack up the price 100 times what the equipment they are selling. Cost of panels, inverters, and batteries is below $1 a watt yet installers are charging up to $8-10 a watt. This is why there is so much fraud in the industry where a salesmen will tell a customer anything to get them to signup. The end user later finds the system didn’t produce no where near what they were told. Utility is no longer going to subsidize dishonest solar contractors. I think NEM 3 is shaking out the dishonest players maybe we have honest contractors who give honest pricing to people.