California’s legacy as the undisputed world champion of solar is in jeopardy. PG&E and the CPUC are hoping to soon deliver a knockout blow to rooftop solar. On Dec 13 2021, the California Public Utilities Commission (CPUC) issued its long-anticipated proposal for the transition from Net Metering 2.0 to a new solar “Net Billing Tariff” program. The CPUC claims this new program, or NEM 3.0 as we call it, is an ‘improved version of solar net billing’. A final vote by the commission is expected to take place later this month.
UPDATE 1/28/22 - THE CPUC removed the Net Energy Metering proposal from its agenda this week, pushing it back to a possible vote on 2/10 or 2/24. This news is promising!
This It’s my opinion and that of the entire CA solar industry, this proposal in its current form will significantly hamper the growth of rooftop solar moving forward. I'll highlight 3 MAJOR CHANGES that could affect your home and who is to blame.
1. GRID PARTICIPATION CHARGES
Solar homes currently pay around $10 a month for “minimum electric delivery charges” which is a fair convenience fee that’s agreeable to most of us. NEM 3.0 abolishes the fee and replaces it with a more punitive ‘grid participation charge’ of $8.00 per kW. What’s that amount to? Last year the average solar system size my clients invested in was 9 kW, about 25 panels. $8.00/kW equates to a giant monthly Grid Participation Charge of $72.00 moving forward under the new Net Billing Tariff.
2. SHARP REDUCTION TO ENERGY CREDITS
Net Energy Metering (NEM) was first adopted by California in 1996 as way to encourage private investment in renewable energy and has since provided the opportunity for many thousands of homeowners to go solar. Under the existing Net Energy Metering program, NEM 1 and 2.0 customers receive an average of 26-28 cents for every solar kilowatt-hour (kWh) sent back to the grid when panels overproduce. The surplus energy not only feeds the grid with power but helps offset the cost of importing power from PG&E at night when the sun goes down. NEM 3.0 drastically slashes the energy credits by as much as 80%. Solar homes might receive as little as 5-6 cents per kWh.
3. ASSAULT ON EXISTING SOLAR HOMES
Already have solar and thought you were exempt from this onslaught by the utilities? I did, but apparently, we’ve been lied to. Alarmingly, this proposal suggests the CPUC has sole discretion to retroactively alter NEM 1and 2.0 agreements. The 20-year grandfather clause you were promised with PG&E the day you went solar; the CPUC would like to reduce it to 8 years but are willing to settle for 15. Their reasoning suggests Net Metering in its current form unfairly harms those utility customers that don’t have the means or desire to invest in solar. Basically, net metering is inequitable because credits earned from your home’s solar energy forces PG&E to raise its rates on other customers. They know it’s BS and I doubt they actually push this one across the finish line without major litigation, but if the CPUC is unsuccessful with this preposterous ask they do have a sly ‘backup’ plan. That plan would include luring NEM 2.0 customers into unwittingly ripping up their existing agreements and this is how they hope to trick us - Existing NEM 2.0 customers will be presented an option to upgrade their home with backup battery storage (which automatically triggers voluntarily enrollment into NEM 3.0) and by doing so will receive a small cash rebate paid out over 4-8 years. It’s a deft move by the utility to get existing solar customers to opt in to NEM 3.0, but don’t be gaslighted. I’m willing to bet when those minimal rebates are finalized and set it stone, they’ll amount to chump change compared to the years of dollars lost from reduced net metering credits and imposed grid participation charges.
HOW DID THIS HAPPEN AND WHO IS TO BLAME?
Where previous governors Arnold Schwarzenegger and Jerry Brown were champions of rooftop solar, Gavin Newsom has inarguably been the complete opposite. For years the utilities have been trying to curtail the adoption of roof top solar and it appears with Newsom’s assistance, the CPUC may finally grant PG&E’s wish. It doesn’t make sense to gut Net Metering in California and implement what will be the country’s largest tax on solar, but if we take a closer look at Newsom’s relationship with one of his largest campaign donors it’s clear how we got in this mess. Going back to his days as a San Francisco supervisor, PG&E has contributed more than $10 million to his political campaigns. I can’t think of another corporation that has benefited more from having Newsom serve as Governor. PG&E is also a major sponsor and contributor to his wife’s nonprofit and his sister’s organization. Newsom has a long history of bestowing gifts upon PG&E. It was just 3 days after he celebrated his gubernatorial victory in 2018 when PG&E killed 84 people in the tragic Camp Fire. Luckily for PG&E and its impending bankruptcy they had a white knight in Newsom. He subsequently initiates the “California Wildfire Fund”; concocted not by state legislators but instead the governor’s personal consultants and attorney team. The fund is a $21 billion safety net for PG&E to recover costs and settlements that may arise from future wildfires - even if those catastrophes are found to be the fault of the utility! A bailout that shields PG&E entirely and guess who is tapped to pay for this fund? PG&E customers. As continuous favors are inexplicably doled out to PG&E it only reinforces my belief that Newsom is never going to change his tune on rooftop solar. If the utilities want to kill it, he’s going to do everything within his power to aid and abet PG&E.
The question now is to what degree will this Net Billing Tariff impact new and existing solar homes? At this stage nothing has been finalized, so I don’t have all the answers yet, but we’ll know more when the final decision is voted on by the CPUC around January 27.
UPDATE 1/28/22 - THE CPUC has not yet made a decision and a final vote is expected to take place on 2/10 or 2/24. I anticipate NEM 3.0 will be implemented by early summer of this year. It’s all in the hands of five CPUC commissioners who have final say. Unfortunately, those five are NOT publicly elected officials. Take a wild guess at who appoints them. Newsom.
UPDATE 1/28/22 - THE CPUC removed the Net Energy Metering proposal from its agenda this week, pushing it back to a possible vote on 2/10 or 2/24. This news is promising!
This It’s my opinion and that of the entire CA solar industry, this proposal in its current form will significantly hamper the growth of rooftop solar moving forward. I'll highlight 3 MAJOR CHANGES that could affect your home and who is to blame.
1. GRID PARTICIPATION CHARGES
Solar homes currently pay around $10 a month for “minimum electric delivery charges” which is a fair convenience fee that’s agreeable to most of us. NEM 3.0 abolishes the fee and replaces it with a more punitive ‘grid participation charge’ of $8.00 per kW. What’s that amount to? Last year the average solar system size my clients invested in was 9 kW, about 25 panels. $8.00/kW equates to a giant monthly Grid Participation Charge of $72.00 moving forward under the new Net Billing Tariff.
2. SHARP REDUCTION TO ENERGY CREDITS
Net Energy Metering (NEM) was first adopted by California in 1996 as way to encourage private investment in renewable energy and has since provided the opportunity for many thousands of homeowners to go solar. Under the existing Net Energy Metering program, NEM 1 and 2.0 customers receive an average of 26-28 cents for every solar kilowatt-hour (kWh) sent back to the grid when panels overproduce. The surplus energy not only feeds the grid with power but helps offset the cost of importing power from PG&E at night when the sun goes down. NEM 3.0 drastically slashes the energy credits by as much as 80%. Solar homes might receive as little as 5-6 cents per kWh.
3. ASSAULT ON EXISTING SOLAR HOMES
Already have solar and thought you were exempt from this onslaught by the utilities? I did, but apparently, we’ve been lied to. Alarmingly, this proposal suggests the CPUC has sole discretion to retroactively alter NEM 1and 2.0 agreements. The 20-year grandfather clause you were promised with PG&E the day you went solar; the CPUC would like to reduce it to 8 years but are willing to settle for 15. Their reasoning suggests Net Metering in its current form unfairly harms those utility customers that don’t have the means or desire to invest in solar. Basically, net metering is inequitable because credits earned from your home’s solar energy forces PG&E to raise its rates on other customers. They know it’s BS and I doubt they actually push this one across the finish line without major litigation, but if the CPUC is unsuccessful with this preposterous ask they do have a sly ‘backup’ plan. That plan would include luring NEM 2.0 customers into unwittingly ripping up their existing agreements and this is how they hope to trick us - Existing NEM 2.0 customers will be presented an option to upgrade their home with backup battery storage (which automatically triggers voluntarily enrollment into NEM 3.0) and by doing so will receive a small cash rebate paid out over 4-8 years. It’s a deft move by the utility to get existing solar customers to opt in to NEM 3.0, but don’t be gaslighted. I’m willing to bet when those minimal rebates are finalized and set it stone, they’ll amount to chump change compared to the years of dollars lost from reduced net metering credits and imposed grid participation charges.
HOW DID THIS HAPPEN AND WHO IS TO BLAME?
Where previous governors Arnold Schwarzenegger and Jerry Brown were champions of rooftop solar, Gavin Newsom has inarguably been the complete opposite. For years the utilities have been trying to curtail the adoption of roof top solar and it appears with Newsom’s assistance, the CPUC may finally grant PG&E’s wish. It doesn’t make sense to gut Net Metering in California and implement what will be the country’s largest tax on solar, but if we take a closer look at Newsom’s relationship with one of his largest campaign donors it’s clear how we got in this mess. Going back to his days as a San Francisco supervisor, PG&E has contributed more than $10 million to his political campaigns. I can’t think of another corporation that has benefited more from having Newsom serve as Governor. PG&E is also a major sponsor and contributor to his wife’s nonprofit and his sister’s organization. Newsom has a long history of bestowing gifts upon PG&E. It was just 3 days after he celebrated his gubernatorial victory in 2018 when PG&E killed 84 people in the tragic Camp Fire. Luckily for PG&E and its impending bankruptcy they had a white knight in Newsom. He subsequently initiates the “California Wildfire Fund”; concocted not by state legislators but instead the governor’s personal consultants and attorney team. The fund is a $21 billion safety net for PG&E to recover costs and settlements that may arise from future wildfires - even if those catastrophes are found to be the fault of the utility! A bailout that shields PG&E entirely and guess who is tapped to pay for this fund? PG&E customers. As continuous favors are inexplicably doled out to PG&E it only reinforces my belief that Newsom is never going to change his tune on rooftop solar. If the utilities want to kill it, he’s going to do everything within his power to aid and abet PG&E.
The question now is to what degree will this Net Billing Tariff impact new and existing solar homes? At this stage nothing has been finalized, so I don’t have all the answers yet, but we’ll know more when the final decision is voted on by the CPUC around January 27.
UPDATE 1/28/22 - THE CPUC has not yet made a decision and a final vote is expected to take place on 2/10 or 2/24. I anticipate NEM 3.0 will be implemented by early summer of this year. It’s all in the hands of five CPUC commissioners who have final say. Unfortunately, those five are NOT publicly elected officials. Take a wild guess at who appoints them. Newsom.
