Statement: California Public Utilities Commission votes to undercut the value of rooftop solar

Media Contacts
Josh Chetwynd

Commission makes a major change for the worse to the state’s Avoided Cost Calculator

Environment California Research & Policy Center

SAN FRANCISCO — The California Public Utilities Commission (CPUC) voted Thursday to approve major changes to the Avoided Cost Calculator (ACC), the state’s official ‘value of solar’ calculator. 

The new ACC approved by the CPUC cut the value of rooftop solar by about two-thirds. Two major changes are behind that reduction in value. First, the ACC now assumes an additional 20 gigawatts (GW) of utility scale solar being built and going online by 2025. From 2017 to 2020, only 6.4 GW of utility scale solar was installed, and, to date, California has 15 GW of utility scale solar. If this record pace of large scale solar growth does occur, it would be a welcome change to help California achieve its 100 percent renewable energy goals. However, by assuming this unprecedented growth in utility scale solar over the next four years, it effectively crowds out rooftop solar and lowers its measured value. In effect, the new calculator fails to account for the importance of rooftop solar in meeting future energy challenges. In addition, the ACC will now use a new and unproven model for predicting how wholesale energy pricing will act in the future. 

Valuing solar energy accurately is an important step in the creation of effective policies that support rooftop solar installations. However, studies that inform state solar energy policies often neglect the sweeping benefits of rooftop solar for the environment, community resilience and public health. Evidence from around the country suggests that when the full benefits of solar energy are valued accurately, policies such as net metering often provide a net benefit to all electric customers and society.

This major modification to the ACC comes as the CPUC is currently considering changes to the state’s net metering program, which compensates solar owners for the excess electricity that they sell back to the grid. Pacific Gas and Electric (PG&E), Southern California Edison (SoCal Edison) and San Diego Gas & Electric (SDG&E), who argued in favor of the changes to the ACC, are proposing to create the nation’s highest fixed charges for solar customers, while simultaneously slashing the net metering payments that solar customers receive. 

Environment California Research & Policy Center State Director Laura Deehan issued the following statement:

“The Avoided Cost Calculator is an important tool for modeling and attempting to measure the benefits of rooftop solar and energy efficiency programs, as well as other distributed energy resources. Unfortunately, the changes that were approved by the CPUC have serious errors that will cause  widespread consequences.

“Rooftop solar and storage along with energy efficiency are some of our best tools to fight climate change. By getting the formula wrong, CPUC risks severely damaging a renewable energy tool necessary for protecting our planet for generations to come.”