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A Brief History of California’s Solar Agreement, Net Energy Metering

Policy
Solar contractor installing a panel on a roof

As we see the devastating effects of climate change across the globe, most recently in Texas where communities were suffering in freezing temperatures without water or power for days, it has become clearer than ever that we need to transform our power supply to renewable energy in order to increase resiliency. This past summer, California experienced the opposite, where sky high temperatures and demand for air conditioning resulted in rolling blackouts for California residents. In a time where it is crucial to increase the deployment of renewable energy, the United States’ largest solar market, California, is under attack. What happens in California will likely be the example for other states, and this is a crucial battle that we’re on the front lines of right now. 

The success of rooftop solar relies heavily on net energy metering (NEM), a solar producer’s agreement with the electric utility company. At a high level, NEM is a billing structure that allows solar customers to sell their excess electricity back to the grid. The amount is then applied to their utility bills, leaving the solar customer to pay the net amount of energy used. California’s first solar agreement, known as NEM 1.0, was extremely successful and accelerated the transition to solar for California residents, businesses, schools and municipalities. Since then, investor-owned utilities (IOUs) across the state have continuously attacked rooftop solar, proposing egregious policies that would make solar economically infeasible. In 2016 the second solar agreement rolled out initially in the San Diego Gas & Electric utility territory, and made its debut for Pacific Gas & Electric (PG&E) and Southern California Edison in 2017. This successor tariff is known as NEM 2.0, and after a tough battle against the utility companies, the California Public Utilities Commission decided that the new solar rate would be similar to the first, maintaining the major benefit of allowing customers to sell electricity back to the grid at retail rates. However, NEM 2.0 required all solar customers to transition to a time-of-use (TOU) rate and non-bypassable rates. Under a TOU rate, a customer is charged different rates based on the time of the day with designated on peak and off peak times. The highest rates are during peak demand, which is late afternoon and early evening, while off peak times occur early in the morning and late at night and have the lowest cost. The new rate structure under NEM 2.0 has serious implications for solar customers, because it changes the value of the energy sold to the grid based on the time. This means that in order to get the highest NEM credits, customers need to sell the bulk of their energy during peak hours. Although NEM 2.0 is substantially less beneficial to solar customers compared to its predecessor, it still retained the major benefits of being able to sell energy back to the grid. Solar companies even began to adapt to TOU rates by designing solar systems to face west in order to capture the maximum energy possible during the late afternoon. Now, California’s IOUs are attempting to make modifications to net metering, ushering in NEM 3.0. 

As details of NEM 3.0 continue to unfold at the California Public Utilities Commission, it is clear that the IOUs are calling for drastic cuts to NEM. The California Solar and Storage Association (CALSSA) estimates that the economic value of going solar will be reduced by 50-75 percent with the IOU’s proposed changes. Decisions made during these proceedings will not only affect new solar customers, but existing customers as well as the IOUs have proposed removing grandfathering periods for current customers, essentially forcing all solar customers onto NEM 3.0. 

With the understanding that NEM 3.0 could kill rooftop solar and that California is a leader and looked to as a model for shaping renewable energy programs, it is not an understatement to say that we are fighting to save solar. We are calling on organizations to sign this net metering letter and individuals to sign this petition, by early April, which will be sent to Governor Gavin Newsom and the California Public Utilities Commision. 

Our founder, Tara Hammond, began a small local coalition to save rooftop solar in California last year and the coalition has quickly grown to a statewide grassroots effort, with more than 70 organizations being involved. To learn more or to join the battle, please reach out to our Climate Justice Policy Advisor, Karinna Gonzalez at karinna@hammondclimatesolutions.com.

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Solar Moonshot Program Hits 150th Project Milestone

This year, our Solar Moonshot Program celebrates a significant milestone: supporting our 150th project!

This year, our Solar Moonshot Program celebrates a significant milestone: supporting our 150th project! Since its inception in 2020, this initiative has been dedicated to facilitating the transition to clean energy for nonprofit organizations across the United States. Our primary objective is to empower nonprofits serving Communities of Concern to adopt solar, thereby reducing their environmental footprint and allowing them to allocate more resources towards their missions and the communities they serve. To date, a whooping 217,581.18 kW of solar power has been supported thanks to this program, offsetting dirty energy accelerating the climate crisis. 

These grants play a pivotal role in funding solar projects for nonprofits, covering essential costs such as the equipment, installation and maintenance, often to organizations too small to secure traditional solar financing. Grant priority is given to organizations that are located in or serve Communities of Concern, which to us often means BIPOC, LGBTQIA2S+, women-led and other groups of people that have historically been underinvested in or marginalized. Over the past five years, the Solar Moonshot Program has successfully funded over 150 projects, totaling over $3.3 million in grants executed and $272,068 in tax credit bridge loans, spanning a wide range of sectors. From community centers, schools and homeless shelters to wildlife sanctuaries, Indigenous elders and educational institutions, each project represents a significant step towards a more just and livable future. We have projects across the nation, in 29 states, Puerto Rico and our first international project in Rwanda. These installations not only contribute to the reduction of carbon emissions but also serve as tangible examples of renewable energy adoption within communities while supporting local green jobs and stimulating regional economies.

We are proud that our 150th project grant was a local San Diego project. The Sherman Heights Community Center is a 501(c)(3) nonprofit organization celebrating their 30th year serving the community. They have a mission to foster community through education, cultural enrichment, health promotion and personal development. The community they serve is predominantly Mexican-American with many families facing economic hardship. They serve about 20,000 community members annually, mostly residents in Sherman Heights and the nearby communities of Grant Hill, Logan Heights, Barrio Logan, San Ysidro and other South Bay communities facing environmental injustices.

We had much more involvement with this grantee than usual, and it's been our pleasure to guide this project from concept through completion. Last year San Diego Community Power opened its first Community Clean Energy Grant Program application period. Hammond Climate Solutions Foundation wanted a community-led project so we reached out to the community asking for recommendations of nonprofits for a solar and storage project. The Sherman Heights Community Center came highly recommended and we were thrilled to support such an impactful organization. The Solar Moonshot Program grant was funded by BQuest Foundation, our philanthropic partner that has supported the program since 2020, and also provided a low-interest tax credit bridge loan for this project. 

The 24kW solar power and 19.2kWh energy storage system was designed and installed by Aloha Solar Power, an International Brotherhood of Electrical Workers (IBEW) Local 569 contractor, supporting local, union jobs while providing on-the-job training for apprentices. 

It's exciting that the solar and storage project is slated to offset 99.6% of the community center’s energy usage, which should result in over $400,000 in electricity bill savings during the lifetime of the system! These substantial savings will be reinvested into the community center and the Communities of Concern it serves. In addition to the clean energy system reducing CO2 emissions, it can provide electricity to the community during power outages, offers clean energy education and supports regional economic growth. 

The Sherman Heights Community Center’s clean energy project was made possible thanks to the organizations and individuals whose financial contributions totaled over $89,000 through our Solar Moonshot Program: BQuest Foundation, San Diego Community Power’s Community Clean Energy Innovation Grant Program in partnership with the San Diego Foundation, Futures Unbound, Greentech Renewables San Diego, IBEW Local 569 and Ann Dynes. To help the community center secure the final portion of funding needed for the project to proceed, we offered to host our first-ever fundraiser: the Pickleball Fundraiser for the Sherman Heights Community Center Clean Energy Project. The fundraiser was a success and a lot of fun! Thanks to all of the participants who helped us raise an additional $14,000 for this project. We’d like to give a shout out to the La Jolla Pickleball Club as well as the companies that donated food and auction items, which made it possible for 100 percent of the funds raised to go towards this clean energy project. 

As we reflect on the achievements of the Solar Moonshot Program over the past five years, we extend our heartfelt gratitude to our partners, supporters and the inspiring nonprofits who are driving positive change in their respective communities. We are so thankful to our generous philanthropic funders that have made this program possible: Left Coast Fund, BQuest Foundation and an anonymous donor through the San Diego Foundation. We appreciate the support from Palomar this year as well. 

We currently have funding for solar grants and loans available! To learn more about the Solar Moonshot Program, including previous grantees, we encourage you to visit our website.

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Empowering Oceanside: Nonprofits Harness Clean Energy to Reinvest in the Community and Combat Climate Injustices

About a year ago, Preserve Calavera, the Oceanside-based nonprofit organization that received $4.4 million for its Oceanside Greenhouse Gas Emission Reduction Fund, selected solar power projects to be among its first initiatives with the fund.

About a year ago, Preserve Calavera, the Oceanside-based nonprofit organization that received $4.4 million for its Oceanside Greenhouse Gas Emission Reduction Fund, selected solar power projects to be among its first initiatives with the fund. The target for its initial solar grants were nonprofits in Oceanside’s communities of concern that otherwise wouldn’t be going solar. 

With an April 2023 deadline to get secured under net energy metering, or NEM 2.0, the solar agreement with San Diego Gas & Electric before solar rules changed across California, Preserve Calavera hired Hammond Climate Solutions Foundation to manage the solar initiative. After outreach to several community organizations, Preserve Calavera recommended Brother Benno’s to be one of the grant recipients. Brother Benno’s is a 501(c)(3) dedicated to serving homeless neighbors, the working poor, and seniors in North San Diego County by offering essential meals, addressing basic needs, fostering community outreach, and supporting addiction recovery.

Hammond Climate Solutions Foundation managed a competitive bidding process for the solar projects, brought in BQuest Foundation, another philanthropic funder, oversaw the execution of the solar contracts and philanthropic solar agreements, in addition to reaching out to an established BQuest partner, Vista Community Clinic, to be a grant recipient. Vista Community Clinic, which first opened in 1972, set out to provide quality health care to anyone who walked through its doors. Today, nearly 50 years later, the clinics have helped redefine the community clinic model by pioneering innovative models of primary care delivery.

The first of the three solar projects, for Vista Community Clinic’s (North Horne Street location), completed this month. The other two projects, at Vista Community Clinic’s (Pier View Way location) and Brother Benno’s, should start within a couple of weeks. Combined, these projects are saving the nonprofits an estimated $2 million during the lifetime of the systems while reducing 2810  metric tons of CO2 contributing to the climate crisis. The three systems have an average payback period of 4.3 years. Additionally, these solar projects were installed by the Encinitas-based, International Brotherhood of Electrical Workers (IBEW) 569 signatory contractor, Aloha Solar Power, supporting local green jobs and apprentices getting on-the-job training. These three projects are considered smaller solar projects that slip through the cracks with traditional solar financing. This leaves many nonprofits not being able to go solar, missing out on a variety of benefits. 

The solar projects will provide education to the community about clean energy, how it reduces climate injustices and the impacts of the climate crisis, which often impact communities of concern first and worst. 

These projects were made possible by a grant from the Oceanside Greenhouse Gas Emission Reduction Fund at San Diego Foundation on behalf of Preserve Calavera as well as a philanthropic solar bridge loan from the BQuest Foundation. 

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Celebrating a year of impactful climate action

The past year has been a testament to the undeniable urgency of addressing the climate crisis as extreme weather and flooding events, fires, drought, heatwaves and other climate emergencies are occurring worldwide.

The past year has been a testament to the undeniable urgency of addressing the climate crisis as extreme weather and flooding events, fires, drought, heatwaves and other climate emergencies are occurring worldwide. As California made decisions to side with the investor-owned utilities to make solar power less accessible and more expensive, the federal government made landmark investments in funding clean energy initiatives. Our team has been working tirelessly advocating for a just and livable future, which includes work behind the scenes working with Governor Newsom’s office, California Public Utility Commission staff and San Diego Community Power to provide feedback on and assist with advancing climate initiatives and programs.    

As we grapple with the wins and losses this year brought, the Hammond Climate Solutions Foundation team is proud to have helped create a more just and livable future. We are grateful for our clients, nonprofit partners and climate champions that we have the pleasure of working with throughout 2023. 

Climate Legislation 

California was able to make some progress on climate through statewide legislation this year and our team was proud to offer our support on a handful of bills, some of which did not pass or did pass and were vetoed by Governor Newsom. By far the biggest win was Senate Bill 253, the Climate Corporation Data Accountability Act, which now requires companies making $1 billion or more to disclose their annual greenhouse gas emissions, forcing an estimated 5,400 companies in the state including Walmart, Exxon and Apple, to provide transparency and hopefully turn that transparency into true climate action. 

Another climate win we were able to help support, along with our partner BQuest Foundation, was Senate Bill 355. The bill started as a bill to expand the eligibility requirements for the state’s Solar on Multifamily Affordable Housing Program,and after meeting with the bill author’s office, our team was proud to have language added into the bill to encourage a loan guarantee to increase utilization of program funds. Although the details still need to be worked out through the California Public Utilities Commission, the added language means that property owners could access the rebate on the front end. 

As we celebrate these two huge wins in the legislature, we have also been actively campaigning to reverse language approved last year through Assembly Bill 205, a budget trailer bill that included a provision, which removed the current cap on utility taxes and mandates a utility tax on all ratepayers that has unlimited potential to grow. The bill was passed without any public discussion and would be the highest utility tax in the country in a state that already has the highest utility rates in the nation. Throughout this year, Hammond Climate Solutions Foundation and organization partners have submitted numerous letters to state legislators, Governor Newsom and the California Public Utilities Commission urging them to repeal the utility tax provision. We have also addressed this issue directly with legislators who have met with us in person. If this section of the bill is not repealed, then the changes will go into effect mid next year. 

Rooftop Solar 

Protecting and expanding rooftop solar has been one of Hammond Climate Solutions Foundation’s biggest policy priorities this year. Although the decision to cut rooftop solar benefits for homeowners in 2022 was a drastic decision and a huge step in the wrong direction, the investor-owned utilities and the California Public Utilities Commission took it a step further and began attacking solar for renters, farms and schools. In August the California Public Utilities Commission issued a proposed decision that would block renters, farms and schools from using their own solar energy. The proposal attempted to give the utilities full control over rooftop solar energy produced by any facility with multiple meters, meaning a school for example, would need to buy back their own solar energy from the utility at full price. Our team worked tirelessly to bring attention to this issue locally and statewide and submitted numerous comments. After delaying the vote on this decision numerous times, a revised proposed decision was released in November. The newly revised proposed decision allows tenants in multifamily buildings to use their solar energy in real time, but still blocks that right from property owners, schools and farms. This decision along with the cuts to rooftop solar benefits for homeowners made last year will make it harder for California to reach its clean energy goals, increase climate injustices, accelerate the climate crisis and ultimately shows how much power the investor owned utilities have.  

Although both decisions are upsetting, we are proud of the advocates statewide who spent numerous hours ensuring their voices were heard and were proud to contribute to San Diego being listed as one of the top cities with the most public comments on this issue. 

Local Climate Action 

While Hammond Climate Solutions Foundation has remained very engaged on statewide issues, our team has also stayed involved with local climate initiatives. Over the course of the year, we submitted numerous letters to the City of San Diego City Council and Mayor Todd Gloria on issues ranging from funding for the Climate Action Plan, building electrification, recommendations for budget prioritization and more. 

We also remain engaged with the County of San Diego as they develop their Regional Decarbonization Framework, providing feedback as they release information.  

We are proud to hold trusted relationships with local elected officials and be looked at as subject matter experts on issues like net energy metering and rooftop solar. This year, we were invited to participate in two elected officials’ environmental roundtables where we proposed ideas for future bills and policies and discussed our team’s priorities. 

We were also proud to help the Let’s Go! San Diego Coalition raise awareness on a proposed transit improvement measure, which has successfully passed the 10,0000 signature requirement to go on the 2024 ballot. 

Looking Forward to 2024

Our team is involved in numerous coalitions, serving in leadership roles and intend to continue our involvement with the San Diego Green New Deal Alliance, California Alliance for Community Energy, San Diego Community Power, San Diego Building Electrification Coalition and Grid Alternatives San Diego. In addition to continuing our climate advocacy and policy efforts, we are also working hard on our climate programs like the Solar Moonshot Program and our e-bike programs. 

Please connect with us on social media: Facebook, LinkedIn, Instagram and X (formerly Twitter, and to ensure you receive updates in the future, sign up for our newsletter.

We look forward to working with all of you in 2024 to create a more resilient, equitable and healthier future for all. 

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