CA's rooftop solar program is out of step with current environmental & energy policy goals
The goal of Net Energy Metering (NEM) when it was launched 25 years ago was to jumpstart solar rooftop technologies, drive costs down and contribute to the growth of renewable power in the state. It worked! While the original goal of the program, when enacted in 1995, was 10,000 home-based systems, today there are over 1 million.
The current NEM program is driving up the cost of electricity for millions of Californians including those least able to pay
Unlike energy efficiency programs that benefit all Californians, NEM benefits are highly concentrated among a subset of the population that are almost exclusively homeowners and tend to be, on average, higher income than the rest of California. The fact that comparatively well-off homeowners benefit from greater energy subsidies than low-income customers reinforces the need for reform. Electricity customers without solar systems pay $3.4 billion more annually in their bills, or on average $245 per customer. If nothing changes, by 2030 this amount will grow to $10.7 billion more each year, or more than $550 per customer.
Cost of Solar Technology Has Fallen 70%, But NEM Subsidies for Rooftop Systems Continue to Increase
Under NEM, customers with rooftop solar receive a credit on their electric bills when their system generates more power than they need, and that power is sent back to the grid. The goal was to establish a credit generous enough to help pay off their systems over a reasonable period. The credit was set to mirror what customers pay for that same amount of power on their bills. While the cost of solar technology has fallen more than 70% since the program began 25 years ago, the NEM subsidy paid by customers without solar continues to increase.
Current NEM Structure Results in Higher Electric Bills for Millions
Electricity customers without solar systems pay $3.4 billion more annually in their bills (or as much as $245 per customer each year) to make up for the costs of the grid that customers with solar use, but do not pay for. In fact, the annual NEM subsidy is now more than twice the amount of the California Affordable Rates for Electricity (CARE) program that helps low-income customers pay their bills. Yet the NEM subsidy benefits 1.1 million customers compared to the 2.8 million low-income customers that receive CARE assistance. That $3.4 billion annual NEM subsidy will continue to increase each year as more customers install solar and fewer and fewer customers are paying to maintain the grid and to fund state mandated public policy programs such as energy efficiency and CARE.
A Reliable, Resilient Electric Grid is More Critical Than Ever, But Current NEM Structure Means Solar Customers Don’t Contribute Their Fair Share
Today, Nearly 50% of all power used in the state is from clean, renewable sources (15% from rooftop solar). Rooftop solar customers send excess power they generate back to the grid during the day, but depend on the grid to draw electricity when the sun is not shining. Because of the high credit they receive on their bills for their excess generation, solar customers don’t pay their fair share for use of the grid or for state mandated public policy programs that support energy efficiency and low-income customers. Other customers end up paying what NEM customers avoid, and this creates an unfair cost burden on customers who don’t have solar including most low-income customers.