Coalition Letter to CPUC: Necessary Updates to California’s Net Energy Metering Program

Submitted September 15, 2021

Dear Commissioners:

On behalf of a broad coalition of diverse interests representing low- and middle-income families, senior, renewable energy, business, faith-based, environmental, community groups, and utilities, thank you for launching a much-needed comprehensive review of the state’s 25-year-old rooftop solar subsidy program, Net Energy Metering (NEM).

Third-party analyses, commissioned by the California Public Utilities Commission (CPUC) and outside parties, along with data and formal testimony submitted by diverse parties over the past several months reinforce the urgency of NEM reform. The record and evidence in the NEM proceeding also make it clear that failure to make meaningful changes will continue to hurt low- and middle-income Californians and jeopardize the state’s transition to a clean energy future.

Today, $3.4 billion in costs are being shifted each year from solar customers (who tend to be higher-income earners) to non-solar customers (many of whom are lower-income renters, seniors on fixed incomes, communities of color and struggling small businesses). This inequity must be addressed.

Currently, non-solar customers are paying about $245 more per year to subsidize solar households. If nothing changes, by 2030 the cost shift will grow to $10.7 billion, or more than $550 per customer each year.

In the 25 years since NEM was launched, the cost of rooftop solar systems has dropped 70%, yet the credits paid to customers with rooftop systems for excess electricity they export to the grid continues to increase. As a result, the excess power generated by the state’s rooftop systems is the most expensive source of clean power in the state; it costs roughly eight times more than solar power from large-scale systems.

Under NEM, solar households are paid roughly 25 cents per kilowatt-hour for excess energy produced when the same solar power could be purchased on the wholesale market for roughly 3 cents. This excessive subsidy means rooftop solar customers pay nominal amounts on their electricity bills. As a result, costs that used to be shared more equitably among all electricity customers, like grid maintenance, fire mitigation, low-income customer assistance programs and energy efficiency are being shouldered by a shrinking number of customers without solar systems who are disproportionally lower- and middle-income.

A recent third-party report commissioned by the CPUC found that if NEM is not reformed, customers installing rooftop solar in 2023 will receive an average of $1,857¹ in subsidies in just the first year of owning solar panels. That amount will grow to an average of $2,623² by 2030 if changes aren’t made to the existing program. The excessive subsidies result in the average rooftop system in California being paid off in roughly five years, while customers with solar panels continue to receive generous credits for more than a decade longer.

Simply put, this is an equity issue where low-and middle- income Californians, communities of color and small businesses already struggling to make ends meet are paying electricity bill discounts for higher-income Californians.

Failure to make meaningful changes to NEM will jeopardize the state’s transition to a clean energy future. Mandating that power generated by rooftop solar systems be paid at a rate of eight times more than it is worth will continue to needlessly drive up electricity rates, making clean energy less competitive with fossil fuels and making transportation and building electrification less attractive.

The status quo of excessive subsidies is not only unsustainable, but also unnecessary. Current laws in California ensure the continued growth of rooftop solar.

Many proposals have been submitted during this proceeding, but only a handful would effectively address current inequities. We urge the commission to only consider proposals that will result in meaningful change to reduce or eliminate the cost-shift.

Thank you in advance for your consideration.


Susy Borlido, Co-Executive Director
Sustainable Works

Deborah Howard, Executive Director
California Senior Advocates League

Jen Lowe, Director of Legislative and External Affairs
Association of California Cities – Orange County (ACC-OC) 

Lisa Baca, Executive Director
California Latino Leadership Institute

CiCi Rojas, President
The Latino Coalition, Inc.

Jan Smutny-Jones, CEO
Independent Energy Producers Association

Jesse B. Johnson, Jr., Founder
100 Black Men of Long Beach, Inc.

Robert C. Lapsley, President
California Business Roundtable

John Gamboa, President
California Community Builders

Rex S. Hime, President & CEO
California Business Properties Association

Matthew Hargrove, Statewide Administrator
Building Owners and Managers Association

Jose L. Perez, President & CEO
Hispanics In Energy

Michael Brown, Government Affairs Director
COLAB San Luis Obispo County

Andrew Caldwell, Executive Director
COLAB Santa Barbara County

Susie Y. Wong, President & CEO
Asians In Energy

Leslie Cooper Johnson, Interim President & CEO
Community Coalition

Azizza Davis Goines, President & CEO
Sacramento Black Chamber of Commerce

Barbara J. Thomas, Executive Director
South Orange County Economic Coalition

Jose Perez, CEO
Latino Journal

Edward J. Rendon, Executive Director
San Gabriel Valley Civic Alliance

Harry Harout Semerdjian, Senior Public Policy Manager
Los Angeles Area Chamber of Commerce

Jeremy Harris, President & CEO
Long Beach Area Chamber of Commerce 

Regina Weatherspoon-Bell, Founder
Dreamers, Visionaries, and Leaders  

Pilar Pinel, Founder & CEO
Embracing Latina Leadership Alliances (ELLA)

Manuela Silva, CEO
Community Housing Opportunities Corporation

Johnny Garcia, President & CEO
Central Valley Hispanic Chamber of Commerce

Thomas N. Hudson, President
Placer County Taxpayers Association

Robert S. Kenney, Senior Vice President
Pacific Gas & Electric

Dennis Osmer, Executive Director
Central Coast Energy Services

Michael A. Backstrom, Vice President, Regulatory Policy
Southern California Edison

Jorge De Nava Jr, Executive Director
Central Valley Opportunity Center

Dan Skopec, Senior Vice President, State Government Affairs & Chief Regulatory Officer
San Diego Gas & Electric

Luis Portillo, Director of Public Policy
Inland Empire Economic Partnership

Diana Yedoyan, Vice President, Public Policy and Economic Development
Hollywood Chamber of Commerce

Renee Ledbetter, President
Ceres Chamber of Commerce

Vickie McMurchie, Executive Director
Dana Point Chamber of Commerce 

Zeb Welborn, President
Chino Valley Chamber of Commerce

Jodi Reid, Executive Director
California Alliance of Retired Americans

Adriana Ayala, Executive Director
The Chicana Latina Foundation

Faith Bautista, CEO
National Diversity Coalition

Nancy Rader, Executive Director
California Wind Energy Association

Nancy Maldonado, CEO
The Chicano Federation of San Diego

Leah B. Silverthorn, Senior Policy Advocate
California Chamber of Commerce

Colin Lavin, Business Manager / Financial Secretary
International Brotherhood of Electrical Workers – Local 47

Bob Dean, Business Manager
International Brotherhood of Electrical Workers – Local 1245

Joël Barton, Business Manager / Financial Secretary
International Brotherhood of Electrical Workers – Local 11 

Nate Fairman, Business Manager / Financial Secretary
International Brotherhood of Electrical Workers – Local 465

Ramiro A. Cavazos, President & CEO
United States Hispanic Chamber of Commerce

Rachel Michelin, President & CEO
California Retailers Association

Julian Cañete, President & CEO
California Hispanic Chambers of Commerce

Thomas N. Hudson, President
California Taxpayer Protection Committee

Pat Fong Kushida, President & CEO
California Asian Pacific Chamber of Commerce

Matthew Hargrove, Statewide Administrator
International Council of Shopping Centers

Matthew Hargrove, Statewide Administrator
NAIOP of California

Jennifer Ward, Sr. Vice President of Advocacy and Government Affairs
Orange County Business Council

Emma Hernandez, CEO
Southeast Community Development Corporation

Nahla Kayali, Founder & Executive Director
Access California Services

Val Martinez, Executive Director
Redwood Community Action Agency

Ortensia Lopez, Executive Director
El Concilio of San Mateo County

Sukisha Danyell Kahey, Executive Director
Ujima Housing Corporation

Erin Stream, Executive Director
The Arc of Riverside County

Robert McDonald, President & CEO
Orange County Black Chamber of Commerce

Bill R. Manis, President & CEO
San Gabriel Valley Economic Partnership

Scott Miller, President & CEO
Fresno Chamber of Commerce

Gil Jaramillo, Executive Director
Tulare Kings Hispanic Chamber of Commerce

Dave Clark, Project Director
Synergy Companies

Trish Christensen, President & CEO
Modesto Chamber of Commerce 

Steve Van Dorn, President & CEO
Pleasanton Chamber of Commerce

Ramiro Urias, CEO
The Chamber of Commerce for Greater Brawley

Mark Hemstreet, CEO
Antelope Valley Chambers of Commerce

George D. Pappas III, CEO
San Juan Capistrano Chamber of Commerce

Scott Alevy, President & CEO
Laguna Niguel Chamber of Commerce

Scott Ashton, CEO
Oceanside Chamber of Commerce

Doug Zielasko, CEO
Mission Viejo Chamber of Commerce

Annissa Fragoso, President
Merced County Hispanic Chamber of Commerce


[1] This figure is an average of Non-CARE Solar Only First Year Cost Shift in 2023 if NEM is not reformed: PG&E ($1,817); SDG&E ($2,467) and SCE ($1,287) Source: E3: “Cost-Effectiveness of NEM Successor Rate Proposals under Rulemaking 20-08-020 – A Comparative Analysis.” May 28, 2021. Page 34

[2] This figure is an average of Non-CARE Solar Only Cost Shift in 2030 if NEM is not reformed: PG&E ($2,651); SDG&E ($3,432) and SCE ($1,788) Source: E3: “Cost-Effectiveness of NEM Successor Rate Proposals under Rulemaking 20-08-020 – A Comparative Analysis.” May 28, 2021. Page 38