Solar Facing Extinction in Santa Cruz County: What you need to know

Since 1996, California solar energy companies, installers and customers have benefited from a billing incentive program called Net Metering.

What is Net Metering? Net Metering, or NEM, credits solar energy system owners for the electricity they add to the grid. Essentially, when a rooftop solar system of a residence or business generates more energy than consumed, the owners have the ability to sell the excess production back to utilities and receive credits to their monthly bills. Then, at night or other times when your solar panels are underproducing, you pull energy from the grid and use these credits to offset the costs of that energy.

NEM legislation has helped California become a leader in residential solar with 2,449 MW of installed capacity as of 2015, more than five times than any other state.

It’s also brought over 70,000 solar jobs to California with almost 10,000 located in the Central Coast.

What changes are coming? Under the proposed “NEM 3" a mandatory monthly fee of approximately $50 per month for the average residential solar customer will be applied to every new system installed.

The fee also applies to multi-family housing and homes built under Title 24. Meanwhile, the utility companies are not required to credit anything for the energy exported to the grid. All solar customers will be forced to enroll in newly established rates that contain additional fixed charges and the export credits are calculated according to instantaneous netting data that customers do not have access to. Another aspect of the proposal is that it shortens the grandfather periods of NEM 1 & NEM 2 customers from 20 years to 15 years, breaking promises made to over a million Californians that already invested in solar.

All told, the estimated payback period for a new residential customer would go from 5-7 years to 16+ years in PG&E territory.

This proposed program by the Public Utilities Commission will be devastating to small, locally owned solar companies like Allterra Solar which was founded in Santa Cruz County in 2004.

James Allen, CEO of Allterra Solar continues, “if the current proposed decision for NEM-3 holds, solar installation companies like Allterra will be in a very tough place. Homeowners and businesses would be penalized for adding solar with monthly fees and lower credits, which makes no sense at all considering the race to fight climate change. We are working with our industry allies, elected officials, and the community to pressure the CPUC to modify the proposed decision to make it more solar friendly. There is a small window between now and the end of January to help protect the future of clean energy in California.”

Save California Solar coalition rally on December 8th, 2021 at Capitol Park, Sacramento, California.

(Samantha May)

Why is this happening? The proposed decision is designed to address equity concerns, including a $3 billion “cost shift” considered by the utilities and their political allies as a subsidy for wealthy homeowners.

Sadly, the cuts to NEM make solar more expensive for low-income consumers and everyone else. There are myriad ways the state and IOU’s could meet portfolio standards, emission reduction targets and the needs of grid modernization without gutting solar. The draconian reforms have little, if anything, to do with equity or a desire to help the planet. They are purely a profit grab by the utilities who finally see the solar industry as a threat to their bottom line.

California has bailed out the utilities too many times to do it again for virtually nothing in exchange. These proposals are a continuation of business as usual. If rooftop solar and net energy metering are protected, at least lower-income households and the rest of California’s rate payers will an alternative option to the utility monopolies.

“In a sense, net energy metering in California has created a carbon tax on utility companies, which are feeling the squeeze of the clean energy transition in the form of higher costs for systems built on fossil fuels,” states the Sacramento Bee Ediotrial Board. “Through policy and market forces, these antiquated, profit-driven corporations, which are responsible for environmental destruction, mass death and financial hardship, are being forced to reckon with a consumer base driven by self-sufficiency and sustainability. Slashing solar incentives only helps the private utilities. California regulators must back down.”