SAN FRANCISCO - California solar energy advocates today praised a proposed decision by the California Public Utilities Commission (PUC) that, if approved, will likely boost renewable energy use by homeowners, businesses, and commercial uses and lower energy costs for both solar and non-solar energy ratepayers.
The proposal, put forward by PUC Chairman Michael Peevey, clarifies the methodology to fairly calculate the cap on Net Energy Metering (NEM or "net metering"), a billing arrangement that allows utility customers to offset energy use with their own renewable energy systems (such as electricity-generating solar panels). Net metering works like "rollover minutes," with customers receiving credits on their bills for the excess power they generate that is put back on the grid.
"When we crafted California's original net metering law, the goal was maximize the amount of clean distributed energy on the grid," said former Assemblyman Fred Keeley, author of California's net metering law "By proposing this methodology, the CPUC is complying with the original legislative intent and helping California lead the way toward a clean energy economy."
There is a cap on the amount of net metering that must be made available to customers. California's law sets the cap at "5 percent of aggregate customer peak demand," but does not specify how utilities should calculate that number. Consequently, utilities are using a more restrictive methodology that results in almost 50 percent less net metered solar and renewable energy than would otherwise be allowed. Chairman Peevey's proposed decision clarifies that utilities should use the cap calculation methodology that results in more Californians having access to the energy bill saving benefits of net metering.
"The PUC's proposed decision is a positive step in maintaining the growth of solar in California by clarifying the amount of net metering allowed under current law," said Joseph Wiedman, a partner at Keyes, Fox & Wiedman LLP who represents the Interstate Renewable Energy Council (IREC). "If adopted, this decision will ultimately allow more ratepayers to benefit from net metering -- creating even more job growth in one of our state's thriving industries while lowering costs for solar users and all energy customers."
"Unlike the current cap calculation methodology, which overestimates the amount of solar on the grid, the CPUC proposal is in line with the original intent of California's net meeting law," said Carrie Hitt, Vice President of State Affairs for the Solar Energy Industries Association (SEIA). "Adopting this proposal will help to maintain California's place at the top of one of the fastest growing industries in America."
"This is about choice," said Vote Solar Initiative Executive Director Adam Browning. "Do we want to allow Californians to generate their own electricity using clean, renewable power or stay beholden to the utilities? Do we want to allow people to put panels on their own roof and get fair credit for that power? Schools across the state are already saving $1.5 billion on their electricity bills thanks to net metering. Do we want more of that, or less? This proposed decision comes down on the side of more."
"This decision is good for our health, good for our wallets, and great news for the California workers who rely on solar installation jobs to feed their families," said Jim Metropulos, Senior Advocate with Sierra Club California. "Now, more California families who want to use the free solar power that falls on their roofs to lower their energy bills can do so, and benefit from the savings."
SEIA, the Vote Solar Initiative, Sierra Club and IREC submitted joint comments in the PUC's cap calculation proceeding. The proposed decision will be considered by the entire commission at an upcoming hearing, to be held no sooner than 30 days from the issuance of the proposed decision.
Solar is by far the largest and one of the fastest growing segments of California's new green workforce – employing more than 35,000 Californians today, according to a report by the Solar Foundation.
Established in 1995, California's net metering policy has helped make the state the nation's solar leader. Net metering ensures that solar customers receive fair credit for any excess electricity they put back on the grid for the utility to sell to other customers. The policy makes solar more affordable to Californians in low and middle class zip codes, where solar adoption has been largest in recent years.
In place in 43 states nationwide, net metering one of the most important policy tools for empowering homes, businesses, schools and public agencies invest in solar.