What’s next for ‘NEM 3.0’ net metering solar policy in California


Solar Edition short news :

Analysis by Sage Energy Consulting estimates the value of California solar could drop 40-80% under the proposed policy change.

Now, we wait.

Over the next three months, the California Public Utilities Commission will weigh arguments before making a decision on the next generation of net metering policy — a ruling that is likely to have a seismic impact on the solar industry.

CPUC is expected to release the ‘Net Energy Metering 3.0’ policy in December, updating how utilities credit residential and commercial rooftop solar generators for power sent back to the grid. The transition from NEM 2.0 to NEM 3.0 could happen by the end of 2022.

The debate over net metering policy is not new, and it extends beyond California. But what happens in the Golden State — the largest solar market in the U.S. — sends ripples throughout the solar industry.

Tom Willard, co-founder of Sage Energy Consulting, told Renewable Energy World that the CPUC appears to be on track to reduce the value of energy produced by residential and commercial solar PV systems by 40-80%, favoring regulated utilities and ratepayer advocates.

The arguments, he said, boil down to equity and cost-shifting from solar PV customers to non-solar PV customers.

“We think (the proposed changes) will really depress the market for, at least, the next few years,” Willard said, adding that supply chain and trade issues are already putting pressure on the solar industry. “This is a serious issue.”

Sage’s modeling of the Joint IOU’s proposal shows that commercial customers with a solar PV system sized to offset 90% of their load, a typical target system size, would see a loss in the value of solar in the range of 40%-80%

The three regulated utilities in California — Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric — formed the “Affordable Clean Energy for All” coalition, arguing millions of their customers are over-burdened with costs to support customers with solar PV systems.

The solar industry’s “Save California Solar” campaign argues the proposed NEM 3.0 would allow utilities to block competition from rooftop solar and delay the state’s clean energy goals.

The first bit of bad news for the solar industry came in June when the CPUC voted to drastically reduce the calculated value of solar energy.

“The big utilities’ proposals would not come close to providing a fair credit, given what we know about the many value streams of rooftop solar, community solar, and storage,” Vote Solar’s Senior Regional Director Susannah Churchill said. “California must make local solar and storage even more affordable and accessible, particularly to vulnerable communities and low-income communities.”

A graphic from the Affordable Clean Energy for All coalition, formed by the three regulated utilities in California — Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric.

Willard is advising solar PV clients to request interconnection with CPUC as soon as possible to be grandfathered into NEM 2.0 before NEM 3.0 takes effect, just in case. He said there is the chance of either a settlement between the parties or litigation over the CPUC’s eventual ruling.

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Author: John Engel

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