Solar Solutions

Is everything alright in sunny California? On the surface, it might seem like a strange question to ask. And one that’s completely out of context. But a closer look at the uncertain fate of Net Metering 3.0 indicates otherwise. While California’s utility industry has long been rallying against the state’s net metering laws, the current state of affairs leaves a lot to be desired. 

But what is net metering? Why’s there such a hue and cry over it? How does Net Metering 3.0 affect California’s booming solar industry? 

For answers to these questions, we need to start at the beginning. 

The History of Net Metering

In 1979, architect Steven Strong incorporated solar panels in two of his projects – the residential Granite Place and the government-funded Carlisle House. Strong’s projects worked on a simple principle. When the solar panels generated more power than was being used by these buildings, the utility meter ran backward. When the photovoltaic cells didn’t generate enough power, the meter drew on electricity.

Thus, Strong accidentally triggered the first instance of net metering in America. But all this happened in Massachusetts. Yet, the environmental promise of net metering made most states put forth their own net metering laws. Minnesota became the first American state to implement net metering laws in 1983. California joined the bandwagon pretty late, in 1996. 

California’s Tryst with Net Metering – A Closer Look 

The first-ever NEM law was stipulated by the SB 656 legislation with a few goals in mind. The state was pushing for economic growth and wanted private investors to finance renewable energy sources. 

Over the past 20 years, the interest in NEM and renewable energy resources has grown. California, too, revised its NEM law multiple times. After a fair share of changes, the California Public Utilities Commission gave the green signal to NEM 2.0. 

Implemented on January 28, 2016, NEM 2.0 initiated the following changes: 

In short, customers who were feeding solar power from their rooftop solar grids into utility service providers saw a decline in financial rewards. Despite that, NEM 2.0 became successful enough to make California the highest solar power generator in America by October 2020. 

But, NEM 2.0 was mired in controversy. 

As California’s solar prowess and industry continued to prosper, the voices of dissent kept rising too. Utility companies claimed that net metering gave undue advantages to customers. 

The Two Sides of The Argument 

So, was NEM 2.0 good or bad?

The utility industry pressed forth their demand of implementing major changes to NEM 2.0. They were joined by the Natural Resources Defense Council, Utility Reform Network, Public Advocate’s Office, and other groups. 
Their argument was simple- they believed that NEM 2.0 only benefited the rich who could make upfront investments in cutting-edge solar panels. Low-income families, on the other hand, had to put up with net metering induced price fluctuations. Given that most of these low-income families comprised persons of color, the issue took on racist tones, becoming a matter of grave concern. 

Utility industry giants, including Sempra Gas Company, PG&E, Southern California Edison, and a handful of investor-owned utilities (IOUs), pressed for changes in NEM 2.0. 

But the rooftop solar installers disagreed. They had good reason too. After all, middle-class working neighborhoods comprise half of California’s rooftop solar market. These tensions between customer producers and utility companies prompted the present-day debate. 

The Newsom Administration initiated California’s controversial shift to implementing NEM 3.0. 

NEM 3.0 And Its Implications 

By August of 2020, the California Public Utilities Commission (CPUC) started the NEM 3.0 proceedings. Although the legislation has not issued its verdict yet, NEM 3.0 could: 

However, the effectiveness of NEM 3.0 remains debatable. But if the IOUs’ demand of allotting fixed charges to customer-producers is implemented, it could sound the death knell for California’s solar industry. The question on everyone’s mind is – Will the CPUC be able to offer a ‘sustainable tariff’ that still prompts enough growth in the state’s solar industry? 

Customer producers will need to wait till January 2022 to know if the odds are in their favor. 

But one thing’s for sure – NEM 3.0 could either kill or boost California’s solar industry. There is simply no middle ground. 

Key Takeaways – NEM 3.0 

The Ongoing Battle 

The utility industry may have put its foot down, but California’s solar users give no indication of backing out. 347 organizations comprising businesses, housing, environmental advocacy, citizen’s welfare, etc., came together to form the Save California Solar Coalition. The coalition addressed an open letter to the Newsom Administration and the California Public Utilities Commission to protect California’s solar industry. They also demanded that solar power be kept affordable in the state. 

According to Dave Rosenfeld, Executive Director of the Solar Rights Alliance – “Net metering is helping bring costs down and making it possible for more people to access the savings, resilience, and other benefits of solar power while also moving California closer to our clean energy goals. Voters of all backgrounds want to continue that progress. They know the utilities do not have their best interests in mind.”

Go solar before the year ends to qualify yourself under NEM 2.0. Support activists and groups pushing for sustainable net metering. Go the extra mile because clean energy is needed for a cleaner world and a brighter future.  

Over the past two years we have been helping the residents at Leisure World save money with solar energy. We have worked with many Mutuals in Leisure World and have made this video to highlight our work with Mutual 6 in Seal Beach, California.

Mutual 6 has been mostly solarizing their laundry rooms with carport solar installations, a residential system, and future EV charging expansion capabilities. Mutual 6 has focused on their laundry rooms because it is a common energy load that all of its residents must bear. By going solar, Mutual 6 won’t have to raise member dues because of increased utility bills. The additional benefit is that Mutual 6 is ready to add electric vehicle charging stations for its residents, providing green retirement plan for future Leisure World residents to also enjoy.

Last week, the California Public Utilities Commission (CPUC) finally voted on the current state of the net energy metering program for solar owners. As a locally-based solar contractor (and solar owners ourselves!), we’re happy to report the commissioners voted in favor of those who use solar energy.

Net energy metering allows solar owners to sell overproduction back to their utility company. It’s an important benefit that helps people keep their electricity bills low.

Background on AB 327 and Net Energy Metering

This moment of victory for the solar industry is a long time coming. During the past year or so, we’ve been following the outcome of this vote.

Here’s a play-by-play of how it has gone down:

1. Senator Perea introduces the AB 327 bill with the help of large utility companies, which threatens to completely eliminate the Net Energy Metering program.
2. AB 327 passes the senate floor. Thankfully, some amendments are made that are positive for solar owners. Most importantly, the current net metering program is not eliminated. The bill also demands that the CPUC develop a new net energy metering program (immediately dubbed Net Metering 2.0).
3. Mark Ferron steps down from the CPUC for health reasons. In his closing remarks, he stresses the importance of solar energy in California and advises the remaining commissioners to keep the interests of solar owners top of mind.
4. Thanks to the hard work of CALSEIA and other solar advocate, CPUC Commissioner Michael Peevey announces a proposal that the current net energy metering program will last 20 years from the time of installation.

Why is this Solar Victory So Sweet?

Now current solar owners (and anyone who installs rooftop solar before July 1, 2017) can rest happily and know that they will enjoy the benefits of net metering for a full 20 years. This victory is sweet as the utility companies were lobbying for a much shorter time period (some say as low as 6-12 years).

Moreover, the CPUC also announced that current Californian solar owners will be eligible for Net Metering 2.0 once their 20 years is up.

Net Metering 2.0 Battle to Come

Though this battle was won, the war isn’t over yet. The details of Net Metering 2.0 still need to be worked out and the CPUC has until the end of 2015 to do so. In the coming year, solar owners and advocates in California will need to rally once again so that the collective solar voice is heard.

Property

Owner: Dan Hopper

Type: Residential

Address: Claremore Ave.,, Long Beach, CA

Technology

Type: Solar PV

Installed: April 2022

Size of System: 8000 kW

Professionals & Suppliers

Products:

‍Enphase Energy

‍REC (San Mateo, CA)

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What You Need to Know

Description:

We got 20 x REC400 installed to have our solar power needs properly met. Also, got Enphase IQ7A and Enphase AC Combiner together with envoy so we can view the production of our solar panel system with our phones and computers.

My Motivation:

The main reason I went solar has been the need for lowering electricity costs. Also, in that way I increase the value of my house, which reaffirms how wise my investment is.

Advice:

All those who are thinking of saving on their electric bills and going solar, you better do it the sooner you can, as the 26% tax credit is valid for systems installed until the end of 2022.

Experience with Installer:

Installers and the whole AMECO team did a great job. They were quick, neat, and I felt how much they care for my stress-free experience.

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