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California Agency Proposes an 80 Percent Reduction in Benefits for Solar Customers

Policy
Solar advocates protesting in front of the state capitol

Over the course of this year, Hammond Climate Solutions has released nine blogs, numerous toolkits with calls to action and participated in countless meetings, presentations and webinars to raise awareness about how the monopoly utilities are trying to kill rooftop solar in California.  We managed to help grow a local coalition consisting of cities, elected officials, environmental and climate justice organizations and schools.  San Diego County residents have made their voices heard, and the message is clear - we want to see solar continue to grow.  The highly-anticipated net energy metering (NEM) 3.0 proposed decision was released this week and it is very clear that the California Public Utilities Commission (CPUC) has sided with the utilities and is proposing to make drastic cuts to the benefits of going solar. 


The first of many changes to the policy, which has allowed rooftop solar to become increasingly accessible to low and moderate-income families, is drastic cuts to the credit that solar customers receive for sharing their excess electricity with their neighbors.  The proposed decision cuts this credit by 80 percent, from around 25 cents per kilowatt hour all the way down to 5 cents per kilowatt hour.  This immediate change alone is enough to see a major reduction in rooftop solar installations and therefore a reduction in solar jobs across the state, however the decision goes further than making cuts to current credits. 


The CPUC has also sided with the investor-owned utilities to slap solar customers with high punitive monthly fees.  The fees themselves will depend on the system size, however an average system in the San Diego Gas & Electric (SDG&E) utility territory will carry the monthly fee of about $64 per month, the highest in the nation.  This fee is in addition to a loan or lease payment, which disproportionately impacts families who utilize solar financing options to afford the switch to solar. 


Beyond the draconian measures the CPUC and investor-owned utilities have taken to discourage new solar customers, they have gone a step further to impose changes on existing customers as well.  The NEM 1.0 and NEM 2.0 agreements that apply to current customers established a 20 year transition period, whereby solar customers were permitted to remain on their applicable NEM tariff for 20 years from the date of interconnection with the grid.  Therefore, solar customers naturally used 20-year financial models to determine the economic benefit of their investment, but the proposed decision is set to negate the bankability of those projections with a 25 percent reduction in grandfathering periods for existing customers. 


As our local and statewide coalition grew, and after delivering 120,000 petition signatures to Governor Newsom, we were hopeful that the CPUC would be on our side and that we would be advocating for small changes in the proposed decision, however it is clear that the CPUC has sided with the monopoly utilities.  As California continues to see the effects of the climate crisis and fires, flooding and blackouts are becoming more and more common, now more than ever is the time to fight back against this utility profit grab! 


Call Governor Newsom today!  Call Governor Newsom directly at (916) 445-2841 or use the Solar Rights Alliance’s calling tool to call.  Press 6 to speak to a representative or press 3 to leave a voicemail.  A sample script is below: 


 “My name is ___ and I live in ____. I am against the proposal to cut the benefits of rooftop solar!  The high solar fees and cutting the benefits of solar by 80% will kill the solar market and worsen the climate crisis.  Nobody should pay a penalty for putting solar panels on their roof and California should be doing more, not less, to promote rooftop solar.  Please say no to the utilities’ profit grab, and yes to helping millions of working and middle class people get solar.“

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CA’s deadline to go solar to maximize savings is upcoming

The NEM 3 decision includes a “sunset period” that ends 120 days after the approval of the final decision, meaning anyone who goes solar before the sunset period date is still eligible for NEM 2.

In case you missed it, in December 2022, the California Public Utilities Commission (CPUC) issued a decision that ended a nearly two-year long battle between the investor-owned utilities and environmental groups over the future of rooftop solar in California. Although there was a coalition over 600 strong comprised of environmental and climate change organizations, nonprofits, schools, cities, churches, businesses and elected officials who spent two years urging the CPUC to keep solar growing sustainably, as instructed by law, the CPUC ultimately decided to side with the investor-owned utilities and made significant cuts to agreement solar customers go on, known as net energy metering. You can read more about the coalition here

Under the new net energy metering (NEM) agreement (known as NEM 3), solar customers will get about 75 percent less from the utility for the clean, local and reliable excess energy they share with their neighbors (which the utilities still charge their neighbors full transmission and distribution fees for). Just to give you a sense of how the new tariff compares to what solar customers are receiving currently, compensation for energy will go from an average of $.25/kWh all the way down to about $0.05/kWh. NEM 3 customers will also be forced to go on rates that have higher rates in the evening. All in all, these changes will nearly double the time it takes to pay off a residential system.  

There is some good news.  

If you already have solar, these changes will not affect you! All NEM 1 and NEM 2 customers will continue to receive benefits until their agreement expires, which is 20 years after the system was turned on. The only scenario that would make a customer lose their current NEM status is if a customer adds additional panels that exceed the allocated amount. 

The NEM 3 decision includes a “sunset period” that ends 120 days after the approval of the final decision, meaning anyone who goes solar before the sunset period date is still eligible for NEM 2. In order to go solar and receive maximum benefits, a solar contractor must submit a completed interconnection agreement without significant errors and a signed contract by April 14, although we recommend getting this submitted as soon as possible in case there are errors that need to be resolved. The solar power system can be installed after the cutoff date, so long as the application is submitted by April 14 and it is approved by the utility, however, if any significant changes are made to the equipment being used or system size, that would trigger a new application and cause the customer to lose their NEM 2 status.    

As the proceeding currently stands, customers should be prepared to go solar by the cutoff date, April 14, in order to receive the maximum benefits, however, there is a small possibility that this decision could be reversed entirely. Last month, the Center for Biological Diversity, Environmental Working Group and Protect Our Communities Foundation filed a formal appeal to reverse the CPUC’s final decision. The appeal highlighted ways in which the CPUC violated the law. 

The first and perhaps most obvious issue is that the decision violates a California law requiring the sustainable growth of rooftop solar. The California law is very clear in stating that the new NEM tariff must “ensure that customer-sited renewable distributed generation continues to grow sustainably,” During the course of the proceeding, some commissioner’s even stated that this decision may slow rooftop solar adoption but the CPUC has to consider other issues as well. The appeal rightfully argues that this decision is not the CPUC’s decision to make, as the law is very clear. 

The second issue is that the decision violates another California law that requires the CPUC to put forward an alternative option that would increase solar in communities of concern. The current California law states that any changes to NEM must include an option that will grow solar in “disadvantaged communities.” Not only does the decision actually make rooftop solar more expensive for everyone and disproportionately impacts communities of concern, but the CPUC promises funds to disadvantaged communities that are not available unless the legislature allocates them and are only for battery storage, not rooftop solar. 

  

The overarching issue of the entire proceeding is that the CPUC completely failed to account for all of the benefits and costs of rooftop solar. Any changes to NEM should have been based on the costs and benefits to all ratepayers and the CPUC not only disregarded the benefits of rooftop solar, but also misrepresented the impacts of long distance transmission lines. The appeal claims that in disregarding evidence presented to them, they violated their own process and precedent.  

What's next? 

Although the appeal is strong in its merits, this appeal is simply administrative, meaning that the CPUC has no real timeline to respond to the appeal or make any decisions. If the CPUC fails to respond within 90 days, the organizations that filed the appeal can escalate the appeal to an appeals court, which representatives have stated is the plan. 

The appeal is strong, and has already gained support from groups like 350.org and Solar Rights Alliance, however appeals similar to this have been filed in previous CPUC proceedings and were ultimately dismissed by a court of law and the CPUC. While we should remain optimistic about the appeal, customers should still plan to follow the current deadlines on the table to ensure they don’t miss the opportunity to go solar.   

Bottom line is that if you can go solar now, we recommend it as you’ll be able to maximize your savings and start producing clean energy soon!

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Newsom cuts climate program funding to address budget deficit in a climate emergency

The 2023-2024 budget Governor Gavin Newsom released earlier this month makes cuts to some of the state’s most impactful climate programs and initiatives due to a decline in the state’s General Fund.

In 2022, California saw the devastating effects of the climate crisis as wildfires, droughts, floods and record-breaking heat waves impacted our most vulnerable communities across the state. It is clear that California needs to take aggressive measures to accelerate the state’s transition to clean energy, reduce carbon emissions and transform our transportation system. Unfortunately, while it is clear that the state should increase funding for climate initiatives, the 2023-2024 budget Governor Gavin Newsom released earlier this month makes cuts to some of the state’s most impactful climate programs and initiatives due to a decline in the state’s General Fund. 

We often say that communities of concern are often hit first and worst with the impacts of the climate crisis, and California is witnessing that now with multi-family affordable housing complexes being flooded, infant mortality rates increasing in areas where there is significant air pollution as a result of fossil fuels and long term health issues like asthma and cancer have higher occurrences in communities of concern. 

Transportation 

With transportation being responsible for more than half of the state’s carbon emissions, it is clear that climate investments in transportation need to be prioritized not only for the state to meet its climate goals, but also because pollution from transportation is causing long term adverse health outcomes for communities of concern. In 2022, the state budget included $13.8 billion for transportation programs for projects to advance rail and transit connectivity, improve safety for bicyclists and pedestrians and incentives for zero emission vehicles. This year, the budget includes a $2.7 million reduction in funding from last year making billion dollar cuts or delays in funding for programs. 

Energy    

Although the Governor’s budget states that California “prioritizes affordability, reliability and safety as the state encourages efforts to decarbonize the grid and scale deployment of clean energy generation and storage,” programs to transform our energy system are among the programs with the most drastic cuts in funding compared to last year’s budget. The 2023-24 budget proposes a reduction of $897 million in General Fund and an additional $370 million in General Fund in delays to future years. 

One of the programs with the most drastic cuts in funding is for Low Income Residential Solar and Storage. The program will suffer a reduction of $270 million for solar and storage incentives in 2023-24, just as the California Public Utilities Commission (CPUC) has finalized a decision to cut rooftop solar benefits for future customers

Another program to suffer reductions is the Equitable Building Decarbonization Program at the California Energy Commission, which not only includes a delay of $370 million in funds for this year, but also a reduction of $87 million for in the 2025 budget. 

Extreme Heat and Community Resilience 

In 2022, California experienced record-breaking heat waves that put a massive strain on our energy grid and resulted in deaths across the state. Despite knowledge of the fact that heat waves will continue to get worse as the climate crisis accelerates, funding for programs to address extreme heat and provide relief for communities suffered the most cuts in funding of any of the climate related programs, with a $735 million reduction across programs. 

Programs affected include the Extreme Heat and Community Resilience Program with a $25 million reduction, which is a 43 percent reduction compared to last year as well as programs to develop community resilience centers, which suffered a delay of $85 million to 2024.     

With a reduction or delay in funding to nearly every single climate program, some more than others, it does not seem as though the state government, which claims to be a leader in addressing climate change is prioritizing funding for programs but more importantly, not prioritizing the health and safety of the frontline communities who suffer the disproportionate impacts of climate change. 

Read more in Governor Newsom’s budget summary.    

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Solar Moonshot Program - 2022 Highlights

Hammond Climate Solutions Foundation has had the privilege of running its Solar Moonshot Program for three consecutive years now. To date, the Solar Moonshot Program has had a $1,000,000 budget per year, which has made solar and storage projects possible to over 100 nonprofit organizations across 27 states, deploying 5,458kW of solar and offsetting 136,049 metric tons of carbon dioxide. These projects are reducing emissions, offering solar education to the community, supporting green jobs and allowing nonprofits to save money on utility bills that are reinvested into their missions. 

In 2022 alone we have supported over 20 solar projects across nine states. The solar and storage projects range from educational facilities, food pantries, affordable housing complexes, schools and more. Collectively, these projects are deploying 853.25kW of solar and offsetting 21,266.6 metric tons of carbon dioxide that otherwise would be accelerating the climate crisis. This is the equivalent to greenhouse gas emissions from 24,585 passenger vehicles per year and carbon dioxide emissions from 23,436,242 pounds of coal burned.

The following organizations have received grants this past year and are collectively helping combat the climate crisis:

We are extremely thankful for the generous support of Left Coast Fund, BQuest Foundation and an anonymous donor who have funded these grants and share our passion of combating the climate crisis and prioritizing communities of concern. The Solar Moonshot Program would not be where it is today without their support.

We are happy to announce funding for the 2023 Solar Moonshot Program! If you are part of a nonprofit organization that is interested in applying for a Solar Moonshot Program grant, please find the application here: www.solarmoonshot.org. We encourage you to follow us on social media (Facebook, Instagram, LinkedIn, Twitter) to check out our weekly #SolarSaturday posts that highlight grant recipients, the nonprofits’ inspiring missions as well as how solar positively benefits communities and the globe.

If you know of a foundation, philanthropist or company interested in supporting the Solar Moonshot Program, further expanding our impact, please reach out to maya@hammondclimatesolutions.com.

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