Solar backers pan California’s net metering plan, hint at a possible federal challenge

Solar energy advocates reacted strongly to proposed changes to California’s net metering program. Residential solar developer Sunrun in its initial response appeared to frame a potential federal-level challenge to the proposal, which was issued December 13 and is scheduled for a January 27 vote.

“The proposal includes a raft of complex changes which, if approved, would put rooftop solar far out of reach for millions of Californians,” said Susannah Churchill, Vote Solar’s Western Senior Regional Director. “By drastically reducing monthly solar savings and adding new solar-only fees for the majority of residential solar users, the proposal will move us backward on clean energy and block many Californians’ ability to help make our grid more resilient to climate change.”

The proposed decision determined that net energy metering must be modernized to “incentivize customers to install storage paired with rooftop solar” to help California meet its net peak shortfall and ensure grid reliability. 

The approach would adopt what the Commission said would be “more accurate price signals” to promote greater adoption of customer-sited storage. Increased storage is intended to help the state cut its reliance on fossil fuels during early evening hours, when the sun is down and energy demand is still high. 

The California Solar & Storage Association was quick to criticize the proposal, saying that regulators appear to have “sided with PG&E and the other large investor-owned utilities.” It said the approach would “make rooftop solar and customer-owned batteries more expensive and therefore out of reach of working- and middle-class consumers.”

Developer Sunrun issued a multi-page rebuttal under the signature of its CEO and co-founder Edward Fenster. The statement said the proposal “represents California politics at its worst” and favors “propping up failed and stodgy incumbents.”

The company also charged that the proposal’s fixed fees on solar customers “likely violate” the Public Utilities Regulatory Policies Act (PURPA) and Federal Energy Regulatory Commission (FERC) Order No. 69. Fenster said that because solar customers have net energy consumption consistent with many other utility customers, the CPUC “cannot assess fixed fees on solar customers without also assessing those fees on similarly profitable customers without solar systems.”

He said that in June, two FERC commissioners, including Chair Richard Glick, issued an opinion that there was a “strong case” that a state’s proposed fees for solar customers failed to adhere to these federal regulations. In the wake of the opinion, state regulators removed its fixed charge for solar customers and utilities in both North and South Carolina and adopted rates with no fixed fees for most all residential solar systems.

Fenster’s argument could form the basis for a future challenge of California’s approach, should the full commission approve the proposal at its January meeting.

In its initial review of the proposal, the California Solar & Storage Association said that the rate paid for solar exported to the grid would be around 5 cents/kWh, down from the current 20-30 cents/kWh for residential customers. It said that the proposed plan included no transition glide path, meaning that the full reduction likely would take effect as soon as the new rules were implemented.

Sunrun’s Fenster said that with the advent of bidirectional electric vehicle chargers, the export rate for evening power needs to be greater than the overnight retail (import) rate, and that the benefits of exporting must “more than offset” the fixed fees assessed for the right to export.

He said that if the first condition is not met, then solar+storage customers will consume from their batteries only enough power in the evening to offset their usage. If the second condition is not met, he warned that solar+storage customers “will not elect to pay the fixed fees” — perhaps as much as $700 a year — that “entitle them to export power in the first place.”

Fenster warned that, “No rational customer installing a solar and storage system would take service under the proposed rate structure because it significantly reduces compensation for exported electricity and imposes high monthly fees.” He predicted that customers may elect to export none of their power to the grid, and could opt to leave the grid entirely.


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