California’s Residential Solar Rules Overhauled After Highly Charged Debate – Pasadena Now

Boxes of petitions against proposed reforms that solar advocates claim would cripple the rooftop solar market are displayed before being taken to the governor’s office during a rally at the Capitol in Sacramento on December 8, 2021. Photo by Rich Pedroncelli, AP Photo

The California Public Utilities Commission today overhauled the state’s rooftop solar regulations, reducing payments to homeowners for extra power but providing nearly a billion dollars in incentives to encourage more solar projects for low-income households.

The commissioners called for new rules – unanimously adopted A much-needed course-correction to California’s 27-year-old residential solar rules — after hours of highly charged public comments that were almost entirely opposed.

Both power companies and the solar industry criticized the new rules that outline financial incentives to encourage people to build rooftop solar. Utilities didn’t get all the concessions to lower bills for non-solar customers. And solar developers say the rules will discourage people from installing solar panels.

A victory for the solar industry came earlier this year, when the commission dropped an unpopular plan to charge homeowners an 8% tax per kilowatt-hour for new ones. solar systems.

In remarks before the vote, commissioners acknowledged how divisive the issue has been. Commissioner John Reynolds said the decision was a “tough decision,” adding, “Nothing in energy policy is black and white, and there is nothing in this decision.”

Commissioner Clifford Rechscheffen said the agency faced “competing and challenging priorities.” He called it a “responsible and forward-looking decision”.

The new rules will:

  • For new customers, reduce the amount the utility pays them for additional power by at least 75% compared to current rates, starting in April. The change will not apply to residents with existing solar systems.
  • Fund $900 million in new incentive payments to help residents buy rooftop solar systems. Two-thirds of the funds, $630 million, will be set aside for low-income families. The remaining pair funds solar-battery storage systems.
  • Set rates that aim to shift all customers’ power use to daytime hours, improving grid reliability.

California’s original rules, called net metering, were implemented in 1995. They set up a framework for utilities to buy excess solar power from homeowners and feed the power into the grid.

California needs to lean more heavily on renewable energy to meet the state’s goals of producing zero-carbon electricity by 2045 and ending the use of fossil fuels.

About 1.5 million rooftop solar systems have been installed on California homes, schools and small businesses. About 14% of California’s total electricity comes from large-scale solar projects; Another 10% of the state’s electricity comes from rooftop residential solar.

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Solar companies and environmental groups say the policy could undermine the state’s booming solar industry by increasing the cost of operating panels on homes and small businesses. States that have adopted the same rate shift have seen a decline in solar system installations, they say.

Bernadette Del Chiaro, executive director of the California Solar and Storage Association, called the decision a step backwards.

“The CPUC’s final proposal is a loss for California on many levels,” she said in a statement. “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 even more out of reach.”

“California needs more solar energy — not less,” said Woody Hastings, energy program manager at the Climate Center.

“As more middle- and low-income Californians install solar panels on their roofs, the new rules adopted by the CPUC today threaten to slow the growth of clean energy across the state,” he said.

The years-long battle played out on social media and opinion pages. The complex process of revising the rules received thousands of public comments and, at one point, was mediated by Governor Gavin Newsom.

Today’s meeting began with three hours of lively public comment. Convenors of the virtual meeting heard from five commissioners, with the majority panel calling no.

Some callers made the point that the provision forcing customers to install solar systems with batteries would have the unintended consequence of canceling new solar systems because the cost of storage systems is beyond the financial reach of many homeowners. Current rooftop systems have only 15% storage, the commission said.

Many arguments on both sides focus on justification. Utility companies say demand for rooftop solar in California is strong enough that the industry doesn’t need much help. They say the retail rate they pay solar customers for their excess power is too high and does not reflect the value of their power, which is generated during daylight hours.

Because residents and businesses with solar panels typically have lower energy bills, they contribute less to utility company fixed costs, such as transmission and distribution networks, that are passed on to ratepayers. As a result, non-solar residents, including low-income residents and renters, bear more of the cost burden.

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“This final decision was a missed opportunity that will prolong the harm to low-income California residents and renters for decades to come,” said Kathy Fairbanks, spokeswoman for Affordable Clean Energy for All, a coalition that includes the state’s three largest utility companies.

“The CPUC got this vote very wrong,” said Reverend Frank Jackson, chief executive officer of Village Solutions Foundation, a community development corporation.

“Low-income families are struggling to buy gas, put food on their table and pay for everything, including utilities. It’s unfair to continue to pay hundreds more a year to subsidize mostly wealthy Californians,” he said.

The solar rules have increased bills for customers without rooftop solar by $3.37 billion in 2021, up from $4.5 billion so far this year, according to the CPUC’s Office of Public Advocates.

Solar “customers should pay their fair share of grid, wildfire and other related costs,” the public prosecutor’s office said in the analysis. “Customers with rooftop solar rely on … the grid to use electricity when their rooftop solar system is not generating electricity. The return that (solar) customers receive is greater than the value of the energy.

Office Director Matt Baker said San Diego gas and electric customers pay about 20% of their bill without rooftop solar to cover fixed costs; It’s 12% for Pacific Gas and Electric customers and about 11% for Southern California Edison ratepayers.

Solar advocates dispute the commission’s cost shift equations, challenging the details and pointing out that such calculations fail to take into account the benefits of rooftop solar, including the need to build expensive infrastructure such as power plants.

Advocates say the widespread adoption of rooftop systems provides a valuable service to both the grid and the fight against climate change. He calls the Commission’s new policy “Solar Cliff”.

Rather than seeing the new policy as a punishment for the solar industry, Baker said the new direction highlights the success of solar adoption in California.

“They succeeded, we won, it’s amazing,” Baker said in an interview. “We’ve moved past subsidies for solar-only systems and now it’s time to move to solar plus storage.”

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The commission said the rules would save residents with solar-plus-battery systems about $130 on their monthly bills.

The CPUC is required under state law to update its net metering rules, which triggered a long, complicated and politically thorny process. The commission’s proposal earlier this year was called unfair and inadequate by both the solar industry and utilities.

The changes take into account the evolving habits of consumers: heavy power use has shifted to the evening when people return home and plug in numerous electronic devices.

This demand shift is reflected in the cost of power and the availability of solar energy. Solar energy is abundant during the day and electricity costs about 5 cents per kilowatt-hour. In the evening, when the sun goes down and demand rises, the price of power can go up more than 20 times, officials say.

The commission’s decision to reduce the amount utilities pay for additional power is driven by a revised cost calculator. The lower rates paid to rooftop solar owners take into account the actual cost of power, the commission said, generated on days when electricity is cheaper.

The program had the right intentions when it was founded in 1995, Baker said, by encouraging the adoption of rooftop solar and compensating residents with a retail rate for the power they provide during the day, when the grid carries its heaviest load.

“At the time it was being done it was fair and just,” Baker said, “but the cost to install solar has dropped dramatically in the years since.”

Solar and other sources of renewable energy are gradually replacing power derived from coal and gas, fossil fuels that the state aims to eliminate from the grid by 2045.

While droughts, wildfires, heatwaves and utility blackouts have stretched the lives of some natural gas-fired power plants, the state is moving toward that goal: On May 8, 100% of California’s power grid ran on renewable energy for a few hours, a Record.

CalMatters.org is a nonprofit, nonpartisan media enterprise covering California policy and politics.

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