Coalition Urges CPUC to Make Much-Needed Changes to Rooftop Solar Net Energy Metering (NEM) Program

Posted on March 15, 2021

Antiquated program driving up electricity rates and burdening low-income customers with costs that should be shared by all

Sacramento – Today Affordable Clean Energy for All, a diverse coalition of clean energy, low-income, seniors, faith-based, community and business groups, urged the California Public Utilities Commission (CPUC) to make needed changes to the state’s Net Energy Metering (NEM) program so that those with rooftop solar panels are paying their fair share and costs are not shifted to other Californians, including low-income customers.

From a letter submitted to the CPUC today by members of the Affordable Clean Energy for All coalition:

“Changes are needed to 1) ensure the long-term sustainability of rooftop solar and storage in California, and 2) ensure that all electricity customers – those with rooftop solar and those without – contribute equitably to the electric grid we all rely upon and to state-mandated public purpose programs. Currently, this is not the case and those least able to pay are assuming an unfair burden.”

Coalition members noted that growth of rooftop solar in California has been robust and technology costs have fallen more than 70 percent since the NEM program started more than 25 years ago. Initially, the goal of the program was to incentivize rooftop solar growth and jumpstart the industry with generous credits to solar adopters for selling their excess electricity back to the utilities.

Growth is still strong. Today there are more than one million solar rooftops in California alone. Yet there have been few changes to the NEM program even after it was clear the credits to solar customers were creating an unfair cost shift from primarily higher-income homeowners with solar panels to everyone else. According to the Lawrence Berkeley National Laboratory, 70 percent of California solar adopters are in the wealthiest 40 percent of society.

The NEM program is so outdated, and the credits so large, that electricity customers with rooftop solar are not paying their fair share for electric grid maintenance costs and state-mandated public purpose programs like energy efficiency and low-income assistance. Lack of meaningful changes to the program means some rooftop solar customers pay no more than a nominal electric bill, yet they rely on the grid at all times to export power, and to get electricity at night or on cloudy/rainy days.

These infrastructure and mandated public purpose program costs do not go away. They are instead shifted to customers without solar systems, amounting to about $2.8 billion in 2020 and growing, which equates as much as $200 or more per year for individual electricity customers. For low-income consumers and seniors on a fixed income, this is especially problematic. If no changes are made to the program, by 2030, the bill increases for customers who do not have solar systems will grow to $4.7 billion more each year based on 2020 estimates, or more than $300 for some customers.

The coalition is urging the CPUC to better align bill credits provided for excess power generated by rooftop systems to the actual price of solar power in the open market:

“… excess power generated from rooftop systems essentially costs eight times more than solar power generated from large scale solar generators. With upward pressure on customers’ electric bills from other critically needed investments such as wildfire mitigation and grid hardening, it makes no sense to expect customers to pay inflated rates for solar power from one source when it can be procured cheaper elsewhere. Most problematic, these cost burdens are falling disproportionally on those least able to pay.”

The coalition outlines a number of other principles to reform the NEM program to ensure the future success of rooftop solar in California while also promoting more equity and fairness in the program.

March 15 is the deadline to submit proposals to the CPUC on the next phase of the NEM program. The CPUC is scheduled to make a final ruling on the program later this year.