ICYMI: Energy Expert Calls Net Energy Metering Program (NEM) “Inequitable”

Posted on March 10, 2021

Sacramento – In a blog post released this week, a well-respected California energy researcher likened California’s Net Energy Metering program (NEM) to an “offshore account” for wealthy people and called the program “inequitable.”

“Households with solar are disproportionately wealthy, so this increasing cost shift is not only exacerbating inefficiencies by raising costs, it’s also inequitable,” said James Sallee, an Associate Professor at UC Berkeley and a Research Associate of the Energy Institute at Haas.

Sallee is also one of the co-authors of a comprehensive new report from Next 10 and the Energy Institute at Haas/UC Berkeley which identified problems with the current NEM structure as part of its review of California’s high electricity rates.

Similar concerns have been raised by Affordable Clean Energy for All, a diverse coalition of clean energy, seniors, faith-based, community and business groups seeking changes to California’s 25-year-old NEM program. The coalition supports the continued growth of rooftop solar and the state’s commitment to clean energy and is encouraging the California Public Utilities Commission (CPUC) to reform NEM’s antiquated rate structure that is needlessly increasing electricity rates for millions of residents including those least able to pay.

In the blog post, Sallee reiterated concerns:

“This trend is particularly troublesome given economy-wide growth in inequality, highlighted in particular by socioeconomic and racial disparities in the impacts of the pandemic. And while it isn’t reasonable to try to use electricity rates to unwind economy-wide income inequality, it does seem reasonable to expect electricity rates to not make matters worse. But things will worsen if prices keep rising and more and more wealthy households make use of BTM [behind-the-meter] solar, shifting more costs onto those who can least afford it.”

The CPUC opened a proceeding to review the NEM program in August 2020. Parties to the proceeding must file their proposals for modifying the current NEM program by March 15. The CPUC is scheduled to make a final ruling on the program later this year.