Advocates: California risks ‘solar cliff’

Media Contacts
Bronte Payne

California regulators are considering drastic solar compensation cuts with severe potential consequences

Environment America Research & Policy Center

SACRAMENTO, Calif. — Sharply reducing net metering payments and imposing high, solar-only fixed charges could slow the growth of rooftop solar installations – and, in the most extreme cases, could cause installations to plummet — according to a new report released Tuesday by Environment California Research & Policy Center, CALPIRG Education Fund and Frontier Group. The California Public Utilities Commission (CPUC) is currently considering changes to the state’s net metering program which compensates solar owners for the excess electricity they sell back to the grid. 

“California needs continued growth in rooftop solar to reach its clean energy goals,” said Laura Deehan, state director at Environment California Research & Policy Center. “Our leadership on rooftop solar to date has been intentional, driven by our commitment to smart policies like net metering. The drastic changes to solar compensation that the CPUC is considering threaten to throw California’s rooftop solar leadership off a cliff.” 

The report found multiple cases showing that reducing compensation can put the brakes on solar power deployment. For example, in Arizona, the Salt River Project adopted new fees and policies for rooftop solar that nearly doubled the payback time of solar projects. Solar adoption declined between 50 percent and 95 percent after the changes were made.

California law commits the state to reach 100 percent clean electricity by 2045. To achieve that, state officials estimate that the state will need to add 28.5 gigawatts (GW) of customer-sited solar, nearly quadrupling current distributed solar capacity in California (in addition to adding even larger amounts of utility-scale solar). An Environment California Research & Policy Center and Frontier Group report found that building that amount of rooftop solar would maintain existing land uses on an area about half the size of the City of Los Angeles compared with building utility-scale solar. 

In 2018, state grid operators determined California could forego $2.6 billion in future spending on transmission and other grid projects largely due to increases in rooftop solar and energy efficiency. 

“Rooftop solar benefits all consumers, even those without solar,” said Jenn Engstrom, CALPIRG Education Fund state director. “Homes, schools and businesses in California that go solar reduce the need for grid investments today and contribute to building the clean and resilient energy system of the future.”

Despite the numerous benefits of rooftop solar, Pacific Gas and Electric (PG&E), Southern California Edison (SoCal Edison) and San Diego Gas & Electric (SDG&E) are using the common utility playbook described in Blocking Rooftop Solar to push for the nation’s highest fixed solar charges and drastic cuts to net metering in California. 

“Rooftop solar is cheaper, more efficient and within the reach of more Californians than ever before,” said Engstrom. “California has so much to gain from investing in rooftop solar on our homes, schools and businesses, but the utility proposal to gut net metering effectively pushes rooftop solar out of the market.” 

The California Public Utilities Commission is expected to make a decision on the future of the state’s net metering program by the end of 2021. 

“Gov. Newsom has the opportunity to save rooftop solar and keep California striding towards its clean energy goals,” said Bronte Payne, Go Solar campaign director with Environment America Research & Policy Center. “To do that, the Governor must stand up to the state’s investor-owned utilities. There is too much on the line for the state to get this important decision wrong.” 

Environment California Research & Policy Center is a state partner of Environment America Research & Policy Center. CALPIRG Education Fund is a state partner of U.S. PIRG Education Fund.