Right now, a lot of misinformation and, simply a lack of understanding, exists among the public about distributed solar (often simply referred to as, “rooftop solar”). I have worked as an attorney in the renewable energy industry for over fifteen years, including providing legal counsel to solar contractors, developers, financiers and customers. Even many people who work in the solar industry struggle with understanding and keeping up with the complicated aspects of solar electric rate regulation and rules. This is partly why the California Public Utilities Commission (CPUC) just proposed extremely anti-solar electric rate rules on December 13th. If those rules become effective in May of 2022, as currently proposed, they would make such drastically negative changes to the Net Energy Metering (NEM) solar electric rate program that solar relies on that they could literally decimate the rooftop solar industry in California. According to confidential sources, the Utilities Commissioners prefer to deal with utilities instead of the rooftop solar industry because of a belief that they can control these large entities.
That leaves Californians with utilities and large corporations commandeering the rules over their rooftop solar competition to the regulatory body charged with implementing them. Anyone who follows the news knows that these are the same utilities responsible for massive wildfires, failures to upgrade transmission and distribution infrastructure, and large-scale bureaucracies, bankruptcies and corporate lobbying.
Over the past fifteen years, I have worked in a social justice movement, not just on energy issues. Every time someone installs a solar system on their property, they take ownership and control of their energy supply. This is financial savings and energy resilience given to homeowners and businesses.
The only reason that solar systems are not already an integral part of most buildings’ infrastructure is because, similar to the oil industry with the electric car, utilities have sought to grow their market power by pushing out all competition. Every person that gains energy independence is one less paying customer for the utilities. Rooftop solar technologies have existed since the ‘60s in military applications and “hippy” enclaves who sought to live off grid. This technology that generates power where you need it could have been much further along than it is now. Unfortunately, rooftop solar and other distributed energy companies only figured out a way to make their systems affordable and financeable over the last couple of decades. And, utilities have been working since the invention of distributed solar to stop its growth.
This story is playing out now at the CPUC. The next version of the rules for how owners of distributed solar can connect to the grid are being developed by the CPUC in a proceeding called “Rulemaking 20-08-020,” or more commonly referred to as the “NEM-3 Proceeding.” The CPUC’s first draft of its NEM-3 program rules, proposed on December 13, 2021, could literally stop the growth of the distributed solar industry in its tracks. Instead of finding ways to grow the distributed solar industry, the CPUC’s proposed rules would force new storage technologies to the market and drastically slow the market for rooftop solar statewide.
The unfortunate truth is that it is often more economic to build a net zero emission building from the ground up than to retrofit existing building infrastructure to become net zero emission. Rooftop and ground-mounted solar systems are often just the first step that a home or business owner takes in “cleaning up” their energy supply. Homeowners and businesses need financial help to make these clean energy retrofits. This is financial help far beyond that which any one time rebates provide. If the CPUC wants the distributed solar industry to be more manageable, its focus should be on creating a mechanism to interact with the industry, and its power supplies, in a manner that continues the current trajectory of the industry’s growth. The CPUC has the power to create “winners” and “losers” in California’s energy market through its rulemakings. Unless the Governor or State Legislature steps in, the CPUC could make distributed solar nearly obsolete based on how it structures NEM-3. This is because, like it or not, the grid is going to be most solar owners’ storage mechanism for years to come unless they disconnect from the grid. Utilities should be fairly compensated for providing their storage and other services; however, they should not be allowed to use their power that stems from historically centralized infrastructure to stand in the way of homeowners and businesses rights to energy independence and resiliency.
The combined environmental benefit of retrofitting every viable home and business with solar would enable the energy retrofits needed to achieve a net zero emission society. A recent analysis by a Stanford research team just concluded that it is possible for the U.S. to get to 100% clean energy with wind, water, solar and zero nuclear, but only so long as we have policies that continue encouraging the rapid development of home and commercial solar + storage nanogrids. State policymakers must not make utilities the “winners” through regulatory action or choose supporting large solar plants in the desert over supporting millions of homeowners and businesses who want to go solar and electrify their properties. We need strong leadership now to keep moving into a future with clean energy, or we risk reversing the decades of progress that the distributed solar industry has already achieved.
This post was also published by permission of Estriatus Law on the Renewables Entrepreneur at CleanTechDocs.com: https://www.cleantechdocs.com/blogs/therenewablesentrepreneur/guest-blog-post-commentary-on-the-california-public-utilities-commissions-proposed-decision-on-nem-3