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California state Senator Josh Becker is anxious that the Golden State is undermining a pillar of its clear vitality transition: distributed photo voltaic energy.
Though California has extra large-scale photo voltaic and battery initiatives than simply about every other state, smaller-scale vitality — primarily rooftop photo voltaic — has contributed almost as a lot to its vitality transition up to now. But over the previous yr, a string of utility-backed choices from the California Public Utilities Commission have come “dangerously near discouraging much-needed distributed vitality on this state,” Becker, a Democrat, mentioned.
That’s why he — and a rising variety of California politicians — are proposing laws to reverse that pattern.
The first blow to distributed photo voltaic was the CPUC’s resolution to change California’s decades-old net-metering regime in ways in which have slashed the worth of rooftop photo voltaic for single-family properties and business properties. Two payments launched this yr are taking purpose at that coverage, which has decimated the state’s once-thriving rooftop photo voltaic business because it went into impact a yr in the past in the present day. And past legislative fixes, a lawsuit looking for to reverse the choice was simply granted overview by the California Supreme Court.
But much more dangerous choices have adopted, Becker mentioned. In November, the CPUC ordered adjustments that may derail the economics of shared-solar packages utilized by condo buildings, faculties, farms, municipalities and shared business properties, he mentioned — a coverage he hopes to reverse with laws he launched final month.
And then, in March, the CPUC proposed insurance policies that might undermine a neighborhood photo voltaic plan backed by environmental justice organizations, client advocates, labor unions and the state’s homebuilding business. That plan was seen by many photo voltaic business teams as a final probability for California to throw a lifeline to its distributed photo voltaic sector, which accounts for almost half of the state’s nation-leading photo voltaic capability.
Taken collectively, these choices look like resulting in a regulatory regime that may stop distributed photo voltaic from persevering with to play a function in assembly the state’s clean-energy objectives, Becker mentioned in an April interview.
“We ought to be clear, that’s the message we’re sending proper now,” he mentioned. “With a neighborhood photo voltaic ruling that’s opposite to what 22 different states are doing, with a ruling that daunts faculties and municipalities from with the ability to self-consume their very own photo voltaic that they generate — I actually suppose we now have to take a step again and say, what are our objectives right here?”
Becker will not be the one one asking that query. Solar business teams, environmental justice organizations, state and native elected officers and different entities are throwing their help behind the assorted legislative and authorized efforts to place the state’s distributed photo voltaic business again on monitor.
The stakes are excessive, not solely as a result of California emits extra planet-warming carbon dioxide than most international locations, but in addition due to its place because the nation’s local weather chief. It’s widespread for California local weather coverage to be exported to different states and even the federal degree.
California’s new distributed photo voltaic laws have additionally made life harder for the photo voltaic business writ giant. They’ve crimped gross sales for nationwide rooftop photo voltaic suppliers reminiscent of Sunrun, Sunnova and SunPower in what’s been by far the nation’s greatest rooftop photo voltaic market. And they’ve brought about much more hardship for the bigger variety of smaller photo voltaic installers within the state.
“We’ve heard from a lot of our prospects throughout the business in California,” mentioned
Fox Swim, coverage researcher at photo voltaic software program firm Aurora Solar, which tracked a important hit from the CPUC’s resolution in its lately launched report on 2023 nationwide photo voltaic set up knowledge. “There are only a lot of firms hurting, a lot of firms having to chop again on employees, and having to make a lot of laborious decisions.”
The coverage push to get California rooftop photo voltaic again on monitor
In February, the primary invoice to try to proper the itemizing ship of California distributed photo voltaic was launched: AB 2619. The laws would “be sure that incentives are restored for residents who generate clear energy for the grid,” in accordance with a assertion from Assemblymember Damon Connolly (D), the invoice’s creator. It would repeal the “damaging” resolution — generally often called “NEM 3.0” to tell apart it from the state’s two earlier web vitality metering (NEM) regimes — and drive the CPUC to create new guidelines geared toward maintaining rooftop photo voltaic progress on the trajectory wanted to satisfy California’s long-range local weather objectives.
Connolley cited the need of reversing the financial fallout from the CPUC’s new guidelines and highlighted the significance of distributed photo voltaic in “reaching 100 % carbon-free vitality by 2045,” the aim set by the state’s landmark clear vitality legislation SB 100.
A separate invoice, AB 2256, would order the CPUC to restructure its insurance policies by working an unbiased cost-benefit evaluation of the function rooftop and distributed photo voltaic can play in reaching the state’s clear vitality objectives.
Authored by Assemblymember Laura Friedman (D) and supported by nonprofit teams together with Environment California, the Center for Biological Diversity and Environmental Working Group, AB 2256 would require that the CPUC contemplate a variety of values these teams say had been ignored of its net-metering evaluation, together with improved native air and water high quality, prevented land use impacts and different “non-economic” advantages.
California’s massive three investor-owned utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, are the first opponents of those payments. But the laws additionally faces pushback from utility ratepayer representatives and a few vitality coverage consultants, which again the CPUC’s rooftop photo voltaic resolution.
These teams say that California’s earlier insurance policies shifted service prices from prospects who had rooftop photo voltaic (and subsequently a lot decrease month-to-month payments) to those that didn’t. That’s a main downside, they are saying, since prospects of those utilities already pay among the highest electrical energy charges within the nation and people charges are set to extend even additional.
These teams additionally dispute the photo voltaic business’s claims that the CPUC’s resolution is guilty for the drop in photo voltaic installations over the previous yr — or that the business’s earlier tempo of progress was wholesome for the state’s long-term vitality fairness and local weather objectives. They level to large-scale photo voltaic, which prices much less to construct than rooftop photo voltaic, as a preferable choice.
“The rooftop photo voltaic market isn’t dying,” Severin Borenstein, head of the Energy Institute on the University of California, Berkeley’s Haas School of Business, wrote in an April weblog publish. “It is coming down from the 2021–2023 sugar rush when web metering insurance policies mixed with quickly climbing electrical energy charges, current energy shutoffs and the approaching change from NEM 2.0 to NEM 3.0 to supply progress that merely couldn’t be maintained.”
Borenstein argued that, as an alternative, the brand new coverage has merely “stepped us again from the current exponential progress in new techniques,” which have led to “exponential progress in price shifts onto different ratepayers.”
The dreaded “price shift” argument
Borenstein’s case that California’s earlier net-metering guidelines result in dangerous “price shifts” represents one aspect of a hotly contested debate that has been raging in regulatory battles throughout the nation.
On the opposite aspect of the controversy, environmental teams, neighborhood advocates and vitality analysts have argued that utilities have misrepresented the underlying knowledge to counter a set of insurance policies they oppose for different causes — largely that utilities can’t earn a living on rooftop photo voltaic.
In California, utilities have cited findings from the CPUC’s Public Advocates Office, an unbiased group tasked with defending utility prospects, that the CPUC’s earlier net-metering insurance policies have led to billions of {dollars} of prices being shifted from photo voltaic to non-solar prospects.
But these cost-shift calculations are flawed, critics say. They argue that CPUC has overestimated the prices that rooftop photo voltaic imposes on utility operations and undercounted the societal advantages, as highlighted by Friedman’s lately proposed invoice.
