Frustration builds in wait for California’s next rooftop solar proposal

It’s been over a month and a half since state regulators pressed “pause” on a controversial scheme that would drastically shift the financial underpinnings for consumer solar power installations.

For those invested in the outcome, trying to forecast what happens next has been like an exercise in reading tea leaves.

Predictions vary widely as to when the California Public Utilities Commission and its new president will make their next proposal public, as well as how recognizable it might be. Some say they hear an announcement could come in another month or so; others, later this year or even next.

“Everybody’s waiting,” said Kathy Fairbanks, a spokeswoman for Affordable Clean Energy for All, a coalition funded by California’s major electrical providers. “Nobody knows anything.”

Alice Busching Reynolds, former senior energy adviser to Gov. Gavin Newsom, who appointed her to take lead at the CPUC beginning Dec. 31, remains publicly silent on the issue while attending a flurry of meetings and reviewing the “voluminous record” on the matter.

Reynolds made no comment Thursday, when about 224 opponents of the now-shelved proposal commandeered the phone lines for 4½ hours of the commission’s virtual meeting for back-to-back, one-minute critiques of the plan.

Pressed to give a timeline for the her next move at a March 2 meeting of the California State Assembly Utilities and Energy Committee, Reynolds only noted that the complex issue required consideration of affordability and equity in addition to a legislative mandate to “ensure that customer sited renewable generation continues to grow sustainably.”

“The decision is complicated, as you know,” Reynolds told Assembly members. “It has to do with many elements of the way that rooftop solar customers are compensated, the way that they pay for the grid that they use for their systems — both to receive energy and to export energy — and we are trying to move very quickly in continuing our valuation.”

In the meantime, both sides are hoping for an overhaul of the now-tabled proposal, which was made public Dec. 13, though with different goals in mind.

Some want to see the CPUC further gut the financial inducements introduced almost three decades ago to spur early solar adoption.

Those individuals say the wider public should no longer be subsidizing solar systems installed disproportionately by people of means.

“We want them to bring more equity to the program,” Fairbanks said

On the other side are those who call a proposed new fee for solar users a “solar tax” that burdens them with costs they shouldn’t have to bear. They say a move to slash the credit solar users get for surplus power they generate and send back to the grid by about 80% is a killer for the industry and future rooftop solar adoption.

“People should be able to generate their own electricity from the sun without the utility penalizing them, clawing back what they think is theirs,” said Bernadette Del Chiaro, executive director of the California Solar & Storage Association. “It really crushes solar and storage.”

Like other critics, she argues the very future of distributed solar power and progress toward the state’s renewable energy goals are at stake, even as increasing numbers of lower and middle-income households move into the market.

They say solar adoption would slow precipitously right when the transition to clean energy should be speeding up. They say it would gut the rooftop solar industry, jeopardize California’s decarbonization goals and play into the hands of investor-owned utilities that favor a centralized energy grid.

“Part of the reason why the Dec. 13 (proposed) decision was so extreme,” said Woody Hastings, energy program manager at the Santa Rosa-based Climate Center, “is precisely because it’s been just in the last few years that solar has really started to ramp up with moderate to middle to lower income folks in the state, and that’s ringing alarm bells in the entrenched status quo that, ‘Hey, this is really getting under our skin, and it’s a real challenge to our business model, and we have to crush it.’ ”

Opponents also say they anticipated some early incentives would continue to be phased out, they didn’t expect them to be nearly eliminated as solar was becoming so widely adopted by people in all income groups.

“Everyone I talk to who says, ‘Please don’t do this. This was a mistake,’ acknowledges that some update is needed,” Hastings said. “We’re saying, ‘Yes, some adjustments are needed. Just don’t make it capricious. Don’t make it abrupt, and don’t make it draconian to the degree that it will clearly hobble small-scale solar going forward.’ ”

In the beginning, the first net energy metering plan, known as NEM 1.0, solar users could generate power when the sun shined, send the surplus back to the grid and be credited at the same dollar amount at which they would buy electricity. That essentially offset their bill for the times they needed to purchase energy at night or when the sky was overcast.

Consumers who invested, say, $30,000 in a solar power system would be guaranteed 20 years of the same net-energy metering formula to pay off the cost of their investment.

State legislation adopted in 2013 requires periodic study of the system to ensure there is balance between the burdens and benefits, all while maintaining sustained growth of on-site solar production.

NEM 2.0 was launched in 2016 after such a review. It reduced the value of excess electricity returned to the grid and raised the price of energy acquired when most solar users were likely to need it, reducing the financial advantage.

A new grid-connection fee of $75-to-$150 was added, as well as certain monthly charges.

Solar advocates anticipated another adjustment this time around, when work on a third version started two years ago.

The results, released Dec. 13, instead were drastic, with new monthly fees averaging $58 a month for solar users and the value of excess power they send back to the grid was cut 80%. It also would transition those who signed onto solar under NEM 1.0 or 2.0 to the new program after 15 years, instead of 20.

Supporters say utilities and their ratepayers were having to spend too much for net-metered solar when they could get renewable wind or solar farmed energy for far less. They also say the current formula unfairly shifts about $240 a year of grid maintenance, wildfire mitigation and other expenses onto non-solar users — a “cost-shift” estimated to reach about $550 a year by 2030 if nothing changes.

But California legislators who have joined the fray in recent weeks are expressing caution about the impact to the solar market and rooftop adoption, as well as the state’s leadership on renewable energy, if net energy metering is tightened too much.

North Coast Reps. Jared Huffman, D-San Rafael, and Mike Thompson, D-St. Helena, both signed a Feb. 22 letter to Reynolds and the CPUC from 26 California congressional representatives looking forward to “a dramatically revised policy that supports rapid renewable deployments and California’s continued climate leadership.”

State Sen. Mike McGuire, D-Healdsburg, and Assembly members Jim Wood, D-Santa Rosa, and Marc Levine, D-San Rafael, were among 20 state legislators who signed onto a March 14 letter written “to express deep concerns over specific elements of the proposed NEM-3 decision,” notably the monthly fee and the energy export credit reduction.“

Bob Cippola of Santa Rosa was among the speakers during the CPUC’s public comment period Thursday, and said he rebuilt his home after the 2017 Tubbs fire utilizing Sonoma Clean Power incentives for energy-efficient and carbon-free homes.

“Now is not the time to go backward,” he said. “If zero net carbons and zero net energy are our goals, all-electric homes with rooftop solar is the future of California.”

You can reach Staff Writer Mary Callahan at 707-521-5249 or mary.callahan@pressdemocrat.com. On Twitter @MaryCallahanB.