Notes from the Solar Underground: California Public Utilities Commission considers changing the state’s net metering law

The CPUC is set to vote NEM 3.0 into law, changing the math for prospective residential solar customers. Commissioners will hold a hearing on December 20 and vote in January 2022. Once NEM 3.0 is adopted, the commission will choose a date to sunset NEM 2.0 and transition solar system owners to NEM 3.0.

Currently, solar system owners are compensated at retail rates for electricity generated by their systems. NEM 3.0 will compensate system owners at rates less than retail. The new rates have not been established. NEM 3.0 will change the payback time for system owners. Solar system owners will also pay a grid benefits charge and a monthly grid participation charge. The proposed charges are in the following tables.

Comment: The CPUC is relying on low system price data that is not reflective of the average to shore up their assumption that payback times will not increase. The commission’s data does reflect higher prices for system components that are currently driving system prices up. The commission’s analysis fails to consider the effect of tariffs and bans on modules shipped from Xinjiang and how a supply shortage could affect the future price of components. NEM 3.0 will arrive just as system prices increase and inflation increases prices for groceries and other necessities, thus complicating the system buying decision. 

Commissioners also see inequity in how grid operation charges are spread among ratepayers and seem to assume that adding grid charges to the bills of solar system owners will level the playing field and potentially result in lower electricity rates for all ratepayers. 

Bluntly, are the commissioners even slightly familiar with the utilities they oversee? Because even a casual observer would assume that rates will not go down, and in fact, utilities will soon be bellying up to the bar for another increase. 

Meanwhile, climate change worsens while the commissioners continue enabling the polluters. 

Bernadette Del Chiaro, Executive Director, California Solar & Storage Association (CALSSA), said: “This is, frankly, not a sound public policy proposal. It penalizes consumers who invest in clean energy, which is insanity as the country continues to be pummeled by ever-present climate disasters. It rubber stamps the investor-owned utility’s gutting of NEM, cutting export credits 80% overnight. And it makes retroactive changes to 1.3 million early adopters moving the timeline up five years. This proposal would devastate tens of thousands of jobs and hundreds of small businesses. It is now up to the other four commissioners and the governor to course correct.”

Barry Cinnamon, CEO of Cinnamon Energy Systems, said: “PG&E has dumped a ton of coal in the stockings of all California customers who do not yet have solar. Going solar under NEM 3 will more than double the payback time for all new solar customers. Moreover, by retroactively reducing the grandfathering period by 5 years for existing solar customers they take away 25% of the value of all existing solar systems.

Congratulations, PG&E! With one fell swoop you manage to maximize your profits, reduce benefits for existing solar customers, double the payback for new customers and make it impossible for California to meet its zero carbon emissions goals.

The two departing CPUC commissioners who oversaw this potential destruction of the largest solar market in the U.S. are punishing current and future solar customers, and dooming California’s climate change efforts.”

Lesson: What the government giveth, the government will find an excuse to taketh away.