ICYMI: Legislative Hearing spotlights need to protect low-income Californians from unfair cost shift under the state’s rooftop solar program

Posted on April 23, 2021

Legislators also call foul on solar industry claims that reforms will “kill solar”

Sacramento – In a legislative hearing this week on Assembly Bill (AB) 1139 (Gonzalez-D), legislators and labor groups called for reform of the state’s rooftop solar program, saying lower-income Californians were subsidizing electricity bill discounts provided to wealthier homeowners with solar panels. Legislators also rejected claims by solar industry advocates that a bill to reform Net Energy Metering (NEM) would “kill solar” in California.

Members of the Assembly Utilities and Energy Committee were hearing AB 1139 (Gonzalez-D), a bill to reform the state’s 25-year-old rooftop subsidy program. NEM dictates credits given to customers with rooftop solar when they sell energy back to the [electric] grid. The [current] credits are so generous that many with rooftop solar pay only nominal utility bills and no longer contribute toward the electric grid or state-mandated public purpose programs. Those costs don’t go away, they are shifted to customers without solar.

“A California resident who owns their home and has the luxury of installing solar should not be subsidized by a renter who doesn’t own the roof of their home and has to make up for the cost of our much-needed energy grid,” said Assembly Member Wendy Carrillo. “This bill does not kill the solar energy,” she continued. “That is a complete falsehood.”

Below are excerpts from comments made at the hearing on April 21:

Assembly Member Lorena Gonzalez:

“By charging solar customers their fair share, AB 1139 would greatly reduce rates for non-NEM customers. … We can’t continue to push costs for infrastructure that serves everyone onto non-solar customers, further exacerbating inequities in the state, both financially and in access to renewable energy.”

Scott Wetch, State Association of Electrical Workers:

“AB 1139 is about correcting gross injustices: 91% of all your ratepayers are subsidizing the 9% of NEM customers to the tune of more than $3 billion dollars a year. At least one-third of that windfall doesn’t even go to ratepayers at all. It goes to big corporations like Tesla and Sunrun while communities of color and disadvantaged communities have been left behind.”

Assembly Member Autumn Burke:

“I appreciate that the opposition acknowledges there are inequities in the system and in the program. I think that’s a step in the right direction. But I do want to say that in no way this bill is going to kill the solar industry. And if the only way the solar industry can exist is on the back of low-income communities, I certainly hope that the opposition that had called in would be calling in with a much different attitude.”

Assembly Member Chad Mayes:

“I don’t like the cost shift either. It was a policy created by the state of California to subsidize rooftop solar at the beginning, when it was in its infancy, it is no longer in its infancy. Why do we know that? We know that because it’s $3 billion cost shift and we just heard all of the special interest groups that have formed to protect this particular industry. And of course, that’s what you do when you’re talking about $3 billion.”

Assembly Member Rebecca Bauer-Kahan:

“What was most startling to me in reading this analysis was that chart that laid out the amount of cost shifting that we’ve seen in the past but also what we project to see in the future. We shouldn’t be cost shifting between communities that can afford solar and those that cannot.”

Marc Joseph, Coalition of California Utility Employees:

“Remember, that more than one-third of the current customers are solar companies themselves because they lease the roof and retain ownership of the system. For [low-income] CARE customers, more than half are owned by the companies. They just pass on a small savings to the resident.” 

“I’d like to remind the committee … that the energy commission has required solar on new construction, so there will be plenty of rooftop solar in the future. It just won’t come at the expense of people who don’t have rooftop solar.”

Assembly Member Al Muratsuchi:

“This bill raises an issue we’ve been struggling with for a long time… it’s not fair. Low-income people are carrying the burden of those that have been able to install solar.”