Why is California Threatening to End Rooftop Solar?

A steady chorus of California politicians, high priced consultants and labor activists have been singing a similar tune in Sacramento lately. It goes something like this; “Net Energy Metering, or NEM, is a $3 billion subsidy for rich people with solar paid for by disadvantaged communities.” As the owner of Allterra Solar, a 40-person solar installation company that has been installing NEM based solar systems for 12 years, this is the first I’ve heard of this so-called “NEM subsidy”.

But now, suddenly, even City, County and lesser known state elected officials are all parroting the same “NEM is a subsidy” line in unison.  Ask any of them about their position on local solar and they will say, “I like local solar, but we have to do something about the NEM subsidy.”  The NEM subsidy was even discussed last month on the floor of the Assembly and one official called it a “reverse Robin Hood” scenario where the rich steal from the poor. To this I say “Whaaaat?” 

Why are all these politicians saying this now?  And where are these talking points coming from?

First, an important factor is the timing. California’s NEM policy is scheduled to be changed in 2022, with the final decision by the CPUC expected on January 22, 2022.  PG&E and the big utilities have had this date in their sights since NEM 2 was decided in 2016. Since then, they have amassed an impressive lobbying campaign with the right consulting companies and Sacramento insiders to build a kill rooftop solar campaign. 

Second, the talking points are coming from utilities’ favorite consultants and they have been effectively disseminated around Sacramento. These consultants specialize in big utility energy models and the regulatory landscapes that rule them. They bring a very “utility-centric” perspective to the discussion and when they issue a report their conclusions seem to be taken as gospel.

The NEM Debate

Solar industry veterans, like me, expect there to be a healthy debate between the Big Utilities (PG&E) and the small-scale rooftop Solar Industry when it comes to NEM 3.0.  I expect PG&E to try and eliminate us because we are their only competitor.  I expect us to point out all the grid, environmental, and social benefits we provide to all Californians.  Usually, when considering the tremendous public support that solar garners, the elected politicians take a support position with the solar industry.  However, from what I am seeing, the politicians have consumed the utility kool aid and their minds are made up.  

With Democrats backing AB 1139 (I thought opposition to renewable energy was a Republican thing), the Kill Local Solar Bill is moving quickly through the Assembly in Sacramento. Whether the Democratic majority has bought the utility “NEM subsidy” lie or if they just want more union jobs, things look pretty bleak for locally generated solar energy right now. Who would have thought that would be happening in a state that requires solar on new homes? 

Why Rooftop Solar Matters

California’s solar success is idolized across the country as the standard bearer for how policy makers and the private sector can work together to create a game changing industry.  Through 20 years of creative policy making and the solar industry’s hard work, grit, and determination California now has the biggest and best solar market in the country, and arguably the world.  This was all made possible because of the wildly successful NEM policy that allows solar users to share their extra energy with their neighbors for a bill credit.  But NEM isn’t California’s only successful solar policy, others include: the California Solar Initiative (CSI) rebates, SGIP rebates, MASH, SASH, SOMAH, EV incentives, favorable permitting policies, mandates require solar on new construction, job training programs, public outreach, data collection and dissemination…the list goes on.  All these policies were investments made in order to create a solar industry that provides tremendous benefit to all Californians.

How do all Californians benefit from rooftop solar?

• The 12 gigawatts of rooftop solar reduced CO2, keeps our air cleaner, and led to the cancellation of 24 natural gas power plants, which saved Californians tens of millions of dollars in construction costs.
• There are 75,000 solar jobs in California and the solar industry is a major economic force that benefits communities up and down the state. Solar businesses range from large publicly traded equipment manufacturers to small independent contracting companies and the work includes marketing, sales, design, engineering, software, finance, and construction.  The solar industry has been woven into the fabric of California.
• The 1.2 million solar roofs benefit California’s grid because the power these systems generate is consumed onsite without the need for long distance transmission lines. This is a safer and more efficient way to produce and consume electricity. If the goal is to reduce wildfires and create jobs, you must support rooftop solar.

 

Conclusion

With major decisions set to be made later this year with AB 1139 and the NEM 3.0 rate tariff, the fate of solar for homes and businesses hangs in the balance.  If PG&E gets their way, California will throw away 20 years of investments and see the residential and commercial solar industry disappear overnight.  Basically, PG&E will be left with no competitor and Californians will be denied the choice to add solar to their home.