California’s policies on rooftop solar need to evolve, as we’ve pointed out in a previous blog and our proposal to the California Public Utilities Commission. Although the recent amendments to AB 1139 improve the bill currently on the Assembly floor, they need to go further to ensure that the benefits of solar are shared more broadly and affordably.
California’s residential net energy metering (NEM) policy has successfully grown the rooftop solar market, helped to bring down the cost of solar, and boosted solar production in the state. Now, this policy needs to modernize to be responsive to California’s evolving clean energy needs—like electrifying cars and buildings, reducing our reliance on fossil fuels, and delivering affordable clean energy to low- and moderate-income customers. The current NEM policy is putting significant upward pressure on electric rates according to the California Public Utilities Commission (CPUC) and recent research by Next 10, and should be updated to reduce inequality in who benefits from solar.
NRDC is actively engaged in the “NEM 3.0” proceeding at the CPUC, and strongly prefers that NEM policy details be updated through this proceeding. However, we are supportive of AB 1139 (with some additional changes) as a backstop if the CPUC does not act in a timely manner.
We are supportive of the recent amendments that 1) give the CPUC more time to act (until August 1, 2022), and 2) if the CPUC does not act, would value solar at the “avoided cost” rate rather than the wholesale rate, and not require fixed charges for all customers.
It is also imperative that vulnerable customers are both protected by this bill and enabled to adopt solar and other clean energy technologies going forward. To that end, we recommend that AB 1139 include the following improvements in the next round of amendments:
- Transition periods for NEM 1.0 and 2.0 customers off their current rates should be left to CPUC discretion and not determined by this bill.
- A modest equity fee should be collected during the transition period for NEM 1.0 and 2.0 customers. The revenue from this fee would fund projects that promote clean energy and resilience for customers in disadvantaged communities.
- If the CPUC does not act, the new NEM policy should provide ongoing funding for projects that promote clean energy and resilience for customers in disadvantaged communities.
AB 1139 prompts an important conversation around how to equitably and sustainably advance California’s clean energy goals. Our NEM policy now needs to evolve to play its part in helping California get to its carbon reduction goals equitably and affordably. NRDC’s NEM 3.0 proposal provides a template to do just that.