Hot Topic: California Needs Continued Growth in Our Local Solar Sector

Rooftop solar is a “hot” topic in California this year – no pun intended. California has more than one million solar installations generating over 10,000 megawatts statewide, and thousands of small businesses around the state employ over 77,000 Californians. To meet the ambitious climate targets we need for a livable future, California needs our local solar sector to continue to grow.

That said, rooftop solar does more than avoid greenhouse gases and create green jobs. It reduces the risk of wildfires that ravage our state by reducing the need for transmission and distribution lines. It’s infrastructure like this – connecting homes and businesses to distant power plants – that can sometimes spark wildfires. Rooftop solar also provides communities and individuals the benefit of resilience – solar systems paired with battery storage can stay on even when electric grids go down. And a rooftop solar system can power other climate change-fighting solutions, like electric cars and appliances that don’t run on natural gas.

Which is why, with all the positive shine about solar in the Golden State, you’d be surprised that some people would want to dim the good news on this green technology. And yet, 2021 is a “NEM year” – or Net Energy Metering year – because the California Public Utilities Commission (CPUC) is taking a fresh look at the way that utilities give rooftop solar customers fair credit for their extra solar power. The various actors that are engaged on what should be a simple and positive issue. But these interests have already had one legislative battle about the program in Sacramento and the skirmish now continues at the regulatory level. 

In Sacramento, Assemblymember Lorena Gonzalez introduced AB 1139, which would have effectively ended the rooftop solar market in our state. While it started out framing its effort as a way of protecting the poor, the later iterations stripped out the parts that helped low income customers afford energy. It then focused solely on limiting the growth of the rooftop solar market. 

It only got worse from there.

One provision removed the requirement already in statute to “ensure that renewable distributed generation continues to grow sustainably.” Another would have worsened the terms for almost all existing customers to receive credit for feeding energy back to the grid. Each time the bill was amended, it attracted greater opposition.

The public outcry of existing customers isn’t surprising when you look at it from their perspective. Those customers faced decades-long extensions in their payback periods to pay off their systems. Their ire at the unfairness of changing the deal on the solar they signed onto helped to sink the whole proposal. 

For those reasons and more, Silicon Valley Leadership Group opposed the bill along with a large, diverse coalition of environmentalists, environmental justice organizations, and business groups. But ultimately it was thousands of constituents asking legislators to preserve their rooftop solar contracts that killed the bill.

But, in spite of the will of the people, there might still be another way that interests might still slow the growth of our local solar. The CPUC was already in the process of considering what the next iteration of compensation for rooftop solar customers should be. In that proceeding, which is wrapping up shortly, the Leadership Group submitted testimony in support of rooftop solar and promoting the proven success of net metering. Our goals in the testimony were severalfold: 

  1. To oppose solar-specific fees proposed by rooftop solar’s opponents which – if implemented – would be the highest punitive fees in the US.
  2. To create a gradual glidepath for net metering credits from current values to lower values, with steps down that are triggered by customer adoption levels.
  3. To preserve promises to those who helped grow this successful market and uphold agreements with existing solar customers.

One argument that opponents like to make against rooftop solar compensation is that it shifts the costs of operating the grid onto non-rooftop solar customers. The Leadership Group does not think this argument justifies the punitive fees proposed in the CPUC proceeding. Customers are not obligated to buy a certain amount of energy from their utilities and should not be penalized for generating their own electricity via rooftop solar or other distributed resources. 54-65% of the energy generated by a rooftop solar system is used onsite, by the solar customer.(1) This self-generation is essentially the same as energy efficiency and conservation. 

If everyone in California suddenly consumed half as much electricity on hot summer days when the grid is most stressed, costs for everyone would come down thanks to supply and demand economics. Distributed generation produces the same effect. Further, the grid itself could be smaller and require less transmission infrastructure if distributed generation was more widespread, saving everyone money in costs associated with transmission buildout. The state grid operator acknowledged as much in 2018, when it said that efficiency and distributed energy resources in the state allowed us to avoid an extra $2.6 billion in transmission investments needed.(2)

Finally, it is worth noting that rooftop solar has strong symbolic value. Rooftop solar customers are offering to pick up part of the tab for addressing climate change with their own private capital and show enormous pride in their installations. When it comes to supporting a greener future, they are putting their investment into the places they live, work and worship. Promoting rooftop solar is enormously popular in California, in part because it is a way that a business or a family or a church or a school can say “this is what we are doing to help the planet.” 

We hope the CPUC follows these guideposts as it makes its upcoming decisions and creates the solar future for the next generation of Californians. The Leadership Group asks that the CPUC keep in mind the success of rooftop solar today and the proven track record of net metering in getting us there. Rooftop solar fits sunny California hand in glove – it would be a great shame to see the market for it crash due to misguided policies.

Check out the CPUC proceeding here.

(1) Net Energy Metering 2.0 Lookback Study, page 32.

(2) California ISO Board of Governors Approves 2017-18 Transmission Plan