ICYMI: TURN/NRDC “NEM pays solar customers at skyrocketing retail rates despite ongoing declines in wholesale electricity prices”

Posted on March 3, 2022

Sacramento – The Utility Reform Network (TURN) and the Natural Resources Defense Council (NRDC) said in a recent blog that the state’s rooftop solar subsidy program Net Energy Metering (NEM) “results in a reverse Robin Hood effect” which benefits the rich at the expense of the poor. The two groups have long been advocates for NEM reform to reduce the cost shift.

Mohit Chhabra, NRDC Senior Scientist and Matthew Freedman, TURN Staff Attorney, highlighted the inequities in today’s NEM program, “Today NEM pays solar customers at skyrocketing retail rates despite ongoing declines in wholesale electricity prices. NEM payments are ten times the cost of new wholesale solar contracts and more than five times what rooftop solar electricity is worth.”

They said today’s NEM offers paybacks “where the beneficiaries are generally wealthier homeowners who are subsidized by the 45% of Californians that rent, along with many lower and middle income households lacking the means or opportunity to install their own rooftop systems.”

Chhabra and Freedman, warned that failure to reform NEM endangers California’s ability to wean people off fossil fuels:  

“By placing significant upward pressure on electricity prices, today’s NEM threatens affordability and creates headwinds for California’s ambitious efforts to wean itself off fossil fuels through electrification of buildings and transportation. If swapping gas for electric appliances results in higher monthly bills, and if fueling a car with electricity is costlier than gasoline, it will be increasingly difficult to convince consumers to go electric. So long as customers are burning fossil fuels in their homes and vehicles, our transition to a carbon free future will remain out of reach.

“TURN and NRDC are amongst the strongest supporters of California’s commitments to transform the electricity grid, wipe out fossil fuel use, reduce air pollution, and lead the world in clean energy. This transition must be affordable and equitable. We need to prioritize least-cost solutions that provide benefits to all customers and protect our environment. These solutions include competitively priced distributed resources, smartly sited energy storage, cheap and smartly sited large-scale clean generation, and new community solar programs.”

You can read the entire post here.