Fair Treatment for Solar Customers

On January 28, 2015, the California Public Utilities Commission issued a final net metering decision that extends NEM for solar customers indefinitely. The Commission firmly rejected proposals from the utilities to replace net metering with complicated schemes that would have put solar out of reach for most consumers, and now stands in stark contrast to neighboring states, such as Nevada, which recently went in the opposite direction, shutting down the rooftop solar industry there.

NEM 2.0 for IOU's

Under NEM 2.0, the utility meter will continue spinning backward at full retail rates for solar customers when they are generating more electricity than they are using, but a new fee will partially offset the value of those credits. Solar customers will be required to pay increased charges for public purpose programs like energy efficiency rebates and low-income bill assistance.

The decision also creates an application fee of up to $150 and requires residential solar customers to be on “time-of-use rates” that vary depending on the time of day. Nearly all commercial and agricultural customers are already on mandatory time-of-use rates.

3 IOU Projections

Future Changes

The CPUC will again consider revisions to the NEM tariff in 2019. If it makes changes, those changes will not apply to customers who go solar before the changes are approved. Customers are “grandfathered” from future changes for the first 20 years of operation of their solar systems. This does not guarantee that the underlying rates will not change, but it guarantees that NEM credits will be at full retail rates and that there will not be any new fees beyond those described above.

Existing Systems Are Grandfathered

The changes to net metering in this decision do not affect customers who already have solar or who install solar before utilities meet certain thresholds. CALSEIA estimates these thresholds will be met in late spring for San Diego Gas & Electric, early fall for Pacific Gas & Electric, and early 2017 for Southern California Edison.

NEM for MOU's (Municipal Owned Utilities)

California’s municipal utilities are not obligated to continue net metering once they reach their 5% cap. What’s more, they are not even obligated to define their 5% cap the same way that the investor owned utilities do. AB 327 (Perea - 2013) directed the CPUC to create a successor program, i.e. NEM 2.0, and it codified the calculation methodology for the 5% cap, but it remained silent on municipal utilities.  

As a result, several “munis” have exceeded their NEM caps: Turlock, Moreno Valley, Lompoc and Anza. Some are within spitting distance: Palo Alto, Alameda, and Healdsburg. Others are dangerously close: Banning, Colton, Imperial, Modesto, and SMUD. And a longer list are 40-60% of the way to the cap: Glendale, Lodi, LADWP, Merced, Pasadena, Riverside, Silicon Valley, and Ukiah.   


Contact Brad Heavner, CALSEIA Policy Director