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A Brief History of California’s Solar Agreement, Net Energy Metering

Policy
Solar contractor installing a panel on a roof

As we see the devastating effects of climate change across the globe, most recently in Texas where communities were suffering in freezing temperatures without water or power for days, it has become clearer than ever that we need to transform our power supply to renewable energy in order to increase resiliency. This past summer, California experienced the opposite, where sky high temperatures and demand for air conditioning resulted in rolling blackouts for California residents. In a time where it is crucial to increase the deployment of renewable energy, the United States’ largest solar market, California, is under attack. What happens in California will likely be the example for other states, and this is a crucial battle that we’re on the front lines of right now. 

The success of rooftop solar relies heavily on net energy metering (NEM), a solar producer’s agreement with the electric utility company. At a high level, NEM is a billing structure that allows solar customers to sell their excess electricity back to the grid. The amount is then applied to their utility bills, leaving the solar customer to pay the net amount of energy used. California’s first solar agreement, known as NEM 1.0, was extremely successful and accelerated the transition to solar for California residents, businesses, schools and municipalities. Since then, investor-owned utilities (IOUs) across the state have continuously attacked rooftop solar, proposing egregious policies that would make solar economically infeasible. In 2016 the second solar agreement rolled out initially in the San Diego Gas & Electric utility territory, and made its debut for Pacific Gas & Electric (PG&E) and Southern California Edison in 2017. This successor tariff is known as NEM 2.0, and after a tough battle against the utility companies, the California Public Utilities Commission decided that the new solar rate would be similar to the first, maintaining the major benefit of allowing customers to sell electricity back to the grid at retail rates. However, NEM 2.0 required all solar customers to transition to a time-of-use (TOU) rate and non-bypassable rates. Under a TOU rate, a customer is charged different rates based on the time of the day with designated on peak and off peak times. The highest rates are during peak demand, which is late afternoon and early evening, while off peak times occur early in the morning and late at night and have the lowest cost. The new rate structure under NEM 2.0 has serious implications for solar customers, because it changes the value of the energy sold to the grid based on the time. This means that in order to get the highest NEM credits, customers need to sell the bulk of their energy during peak hours. Although NEM 2.0 is substantially less beneficial to solar customers compared to its predecessor, it still retained the major benefits of being able to sell energy back to the grid. Solar companies even began to adapt to TOU rates by designing solar systems to face west in order to capture the maximum energy possible during the late afternoon. Now, California’s IOUs are attempting to make modifications to net metering, ushering in NEM 3.0. 

As details of NEM 3.0 continue to unfold at the California Public Utilities Commission, it is clear that the IOUs are calling for drastic cuts to NEM. The California Solar and Storage Association (CALSSA) estimates that the economic value of going solar will be reduced by 50-75 percent with the IOU’s proposed changes. Decisions made during these proceedings will not only affect new solar customers, but existing customers as well as the IOUs have proposed removing grandfathering periods for current customers, essentially forcing all solar customers onto NEM 3.0. 

With the understanding that NEM 3.0 could kill rooftop solar and that California is a leader and looked to as a model for shaping renewable energy programs, it is not an understatement to say that we are fighting to save solar. We are calling on organizations to sign this net metering letter and individuals to sign this petition, by early April, which will be sent to Governor Gavin Newsom and the California Public Utilities Commision. 

Our founder, Tara Hammond, began a small local coalition to save rooftop solar in California last year and the coalition has quickly grown to a statewide grassroots effort, with more than 70 organizations being involved. To learn more or to join the battle, please reach out to our Climate Justice Policy Advisor, Karinna Gonzalez at karinna@hammondclimatesolutions.com.

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Climate activists knee deep in water at the Fossil Fuel Free San Diego press event

Climate Activists Launch the Fossil Fuel Free Pledge Knee Deep in Mission Bay

On August 11, leading climate organizations, elected officials, candidates and local activists stood knee deep in the waters of Mission Bay to demonstrate the effects the climate crisis will have locally and launch the Fossil Fuel Free Pledge. The initiative aims to end the fossil fuel industry’s anti-climate agenda while celebrating and providing transparency regarding where organizations, elected officials and candidates receive funding. Those who take the pledge agree to not accept any fossil fuel money as part of their commitment to an equitable and climate safe future.

On August 11, leading climate organizations, elected officials, candidates and local activists stood knee deep in the waters of Mission Bay to demonstrate the effects the climate crisis will have locally and launch the Fossil Fuel Free Pledge. The initiative aims to end the fossil fuel industry’s anti-climate agenda while celebrating and providing transparency regarding where organizations, elected officials and candidates receive funding. Those who take the pledge agree to not accept any fossil fuel money as part of their commitment to an equitable and climate safe future.  Speakers at the event included Carlsbad Councilmember Priya Bhat-Patel, candidate Tommy Hough and representatives with San Diego Coastkeeper, SanDiego350’s Youth4Climate, CleanEarth4Kids, Hammond Climate Solutions Foundation and San Diego Urban Sustainability Coalition. Additional attendees included Surfrider San Diego, SD-SEQUEL, candidate Georgette Gòmez and other climate activists. 

It’s no secret that fossil fuel companies give funding to nonprofits and elected officials, and activists note that allegiance is often expected in return for those funds. Some nonprofit organizations that have accepted fossil fuel money have publicly supported a fossil fuel company’s anti-climate initiative, even when the initiative conflicts with the organizations’ mission, values and hurts the communities being served by the nonprofit. Fossil fuel companies have also invested billion of dollars to support elected officials and candidates who will vote for policies and laws that continue to benefit polluters. 

Locally, two big fossil fuel corporations contributing funds to nonprofit organizations and candidate campaigns are San Diego Gas & Electric (SDG&E) and its parent company, Sempra Energy. SDG&E touts its renewable energy content in its state-mandated renewable portfolio standard program, although Voice of San Diego reported last year that SDG&E Walks Back Claim it Delivers 45 Percent Renewable Energy, citing only 31 percent of energy San Diegans consume is zero carbon. While SDG&E claims to support clean energy, their net energy metering proposal at the California Public Utilities Commission would erode the economics of rooftop solar, making solar out of reach for many Californians while setting what activists say is a dangerous nationwide precedent to rely on dirty energy for a longer period of time. If SDG&E’s net metering proposal is adopted, it would also lessen the benefits that the City of San Diego’s new Solar Equity Program has for San Diegans in communities of concern. Meanwhile Sempra Energy sold off renewable assets and continues to invest heavily in fossil fuels, primarily fracked gas, which accelerates the climate crisis and contributes to various climate injustices in California. 

“You cannot buy my destruction. You cannot pay to poison my children. You cannot pay to poison my communities,” said Yusef Miller, a board member of CleanEarth4Kids and a NAACP North County leader, in a passionate message to the local fossil fuel company SDG&E. Miller’s high school aged son also spoke at the event.  

With the climate crisis worsening, scientists, leaders and climate activists say it is now more urgent than ever to end our reliance on fossil fuels. Divesting from fossil fuel support and standing behind companies that prioritize clean energy, green jobs and communities of concern has never been more critical. In fact, earlier this year, the San Diego County’s Board of Supervisors made the unanimous decision to divest from fossil fuel companies. This allows the County to invest its money in companies that do not detrimentally impact the environment and accelerate the climate crisis.

"The fossil fuel industry has invested millions of dollars towards campaign contributions, organizations and front groups to ensure billions of dollars in subsidies and laws that benefit polluters,” said Karinna Gonzalez, Climate Justice Policy Manager with Hammond Climate Solutions Foundation. “The Fossil Fuel Free Pledge is starting here in San Diego, and it will cut off the fossil fuel industry’s influence so that we can make meaningful progress towards a just and livable future."

Fossil Fuel Free pledgees include SanDiego350, Hammond Climate Solutions Foundation, Bike San Diego, San Diego Coastkeeper, Surfrider San Diego, San Diego Urban Sustainability Coalition, CleanEarth4Kids, Democratic Socialists of America San Diego, North County Climate Change Alliance, SD-SEQUEL, San Diego Bike Coalition, South Bay Sustainable Communities, Climate Reality Project San Diego, Environmental Center of San Diego, University Christian Church, City of San Diego Councilmember Monica Montgomery Steppe, Carlsbad City Councilmember Priya Bhat-Patel and candidates Tommy Hough, Georgette Gómez, Tiffany Boyd-Hodgson and Cody Petterson. All local elected officials, candidates and nonprofit organizations are invited to take the pledge and join the movement for a healthier and more equitable future. 

“As we stand here knee-deep in water, I would be remiss if I did not point out that this is our future if we allow fossil fuel companies to donate a penny to the environment while spending thousands to destroy it,” said Lucero Sanchez, Campaigns Manager with San Diego Coastkeeper.

The Fossil Fuel Free Pledge launched targeting nonprofit organizations, elected officials and candidates, however, there are plans to expand the categories as well as the geographic region. For more information or to take the Fossil Fuel Free Pledge or to get involved, visit www.fossilfuelfreepledge.org.

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Image of solar advocates protesting at the state capitol

Solar Tax Continues to Threaten California’s Rooftop Solar Progress

After about six months of near silence from the California Public Utilities Commission (CPUC) they have re-opened the proceeding to get input on some new elements of their proposal. The CPUC is now asking for feedback on charging customers based on self consumption, where the less energy that is bought from the utility because of the solar, the higher the fee. The amount of the fee could be anywhere between $300-$600 per year on average. Local, state and federal governments have encouraged rooftop solar, similarly to promoting energy efficiency, which also reduces a household or organization’s energy use, lessening stress on the grid while minimizing CO2 emissions contributing to the climate crisis. A solar tax that punishes residents for using less energy is like taxing people for growing their own food instead of buying it from the grocery store. The proposed solar tax directly contradicts what the Newsom administration has said is one of their top priorities, addressing the rapidly accelerating climate crisis.

After about six months of near silence from the California Public Utilities Commission (CPUC) since their December 2021 proposed decision that would decimate the state’s rooftop solar agreement, net energy metering, they have recently announced that they are re-opening the proceeding to get input on some new elements of the proposal. Here is what we know: 

One of the most criticized elements of the proposed decision was the CPUC’s proposal to impose a fixed monthly charge for all solar customers. Previously, the charge was to be based on the size of the solar system, which would have resulted in $60 per month for an averaged sized residential solar system. The CPUC is now asking for feedback on charging customers based on self consumption - the solar energy customers produce and use at home. The less energy that is bought from the utility because of the solar, the higher the fee. The amount of the fee could be anywhere between $300-$600 per year on average. Local, state and federal governments have encouraged rooftop solar, similarly to promoting energy efficiency, which also reduces a household or organization’s energy use, lessening stress on the grid while minimizing CO2 emissions contributing to the climate crisis. A solar tax that punishes residents for using less energy is like taxing people for growing their own food instead of buying it from the grocery store. The proposed solar tax directly contradicts what the Newsom administration has said is one of their top priorities, addressing the rapidly accelerating climate crisis. 

Rooftop solar advocates, climate justice organizations, elected officials, community choice energy programs, houses of worship, nonprofits and schools have openly criticized the idea of taxing solar customers, which has resulted every single CPUC public voting meeting  being flooded with phone calls of concerned California residents voicing their strong opposition, which have lasted up to seven hours. The distributed solar and storage industry has been very loud in voicing opposition as well, hosting a number of rallies outside of the CPUC headquarters and turning out thousands of solar workers with one request: don’t kill our solar jobs.  

Another upsetting element of the December 2021 proposed decision was the idea to dramatically reduce the amount solar customers are compensated for sharing their excess energy with their neighbors. Unfortunately, a dramatic reduction in export compensation is still on the table, however the question that remains is how quickly those amounts will decrease. The industry has spoken very loudly on this particular issue, stating that a drastic reduction in export compensation would completely halt the growth of solar across the state. 

It is clear that both the CPUC and Governor Gavin Newsom have heard the voices of opposition and felt the pressure to distance themselves from the December proposed decision, with the governor stating in a press conference that “there is more work to be done.” It is clear that the CPUC still has plans to make serious changes to net metering, which will undoubtedly slow solar adoption and lead to more climate injustices. 

Locally, advocates in San Diego have been very vocal in criticizing the CPUC, and this potential new proposal comes in the middle of San Diego Gas & Electric increasing their rates making San Diego the city with the highest price for energy in the country and resulting in one out of four San Diegans unable to pay their electric bills.

The timeline remains unclear, however a revised proposed decision could come out as early as July, with a vote as early as August. To learn more about how you can get involved to help save rooftop solar in California, visit our toolkit!

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Fossil Fuel Free San Diego logo

Fossil Fuel Free Pledge Launches!

Fossil Fuel Free Pledge launches to accelerate climate action and cut off the fossil fuel industry’s influence. The pledge is simple: "We pledge to not take any money from the oil, gas, investor-owned utilities and coal industries, including political action committee contributions, and we pledge to always prioritize the interests of equity, human health, our community, workers and the environment over interests of the fossil fuel industry."

As we enter into Earth Month, we recognize the progress we have made battling fossil fuel companies and the climate crisis, but also understand that there is still much, much more that needs to be done.  With this in mind, the Hammond Climate Solutions team, in partnership with other leading San Diego climate organizations, BikeSD, SanDiego350, San Diego Coastkeeper and Surfrider San Diego, could think of no better time than now to launch our newest campaign, the Fossil Fuel Free Pledge.

“We have seen SDG&E and Sempra use funds to erode bold climate policies and push a fossil fuel agenda, which cannot continue as we fight for a just and livable future,” said Tara Hammond, founder and CEO of Hammond Climate Solutions, a pledgee and co-founder of the Fossil Fuel Free Pledge.  “The Fossil Fuel Free Pledge will give the public, voters, donors and philanthropists a greater sense of security knowing that the nonprofits and elected officials they choose to support do not stand behind greenwashing and won’t be compromised by a fossil fuel agenda that opposes climate action.”

The Fossil Fuel Free Pledge holds organizations and elected officials accountable for where their funding comes from.  By taking the pledge, nonprofits and elected officials vow to not accept funding from fossil fuel companies, illustrating their devotion and commitment to combating climate change. 

The pledge is simple:  "We pledge to not take any money from the oil, gas, investor-owned utilities and coal industries, including political action committee contributions, and we pledge to always prioritize the interests of equity, human health, our community, workers and the environment over interests of the fossil fuel industry." 

The campaign lauches with pledgees BikeSD, SanDiego350, San Diego Coastkeeper, Surfrider San Diego and the Environmental Center of San Diego, along with Carlsbad City Councilmember Dr. Priya Bhat-Patel, the first elected official and candidate to take the pledge.  These pledgees have all committed to a transparent and fossil fuel free future. 

“We want to lead by example and send a message to fossil fuel companies who think they can buy their way into continuing to pollute our environment,” said Lucero Sanchez, community policy coordinator at San Diego Coastkeeper, a pledgee and co-founder of the Fossil Fuel Free Pledge.

Our pledge will create greater transparency for the public.  When an organization or individual takes the pledge, they stand behind divesting from fossil fuels and instead supporting companies that prioritize clean energy, green jobs and communities of concern.  In fact, in early March the San Diego County’s Board of Supervisors made the unanimous decision to divest from fossil fuel companies.  This allows the County to invest its money in companies that do not detrimentally impact the environment and accelerate the climate crisis.

“The fossil fuel industry has used its wealth and political power to mislead the public and stymie climate action and climate justice for over six decades,” said Masada Disenhouse, Executive Director of SanDiego350, a pledgee and co-founder of the Fossil Fuel Free Pledge.  “By signing this pledge, organizations and candidates are putting their money where their mouth is and showing the community that they are part of the solution – not part of the problem.”

With the climate crisis worsening, it is now more urgent than ever to say no to fossil fuels and turn to other sources of renewable energy instead.  If you are an elected official or part of an organization that would like to take the pledge and join the movement for a healthier and more equitable future, please fill out the form linked here.

We look forward to expanding our impact and helping more organizations, elected officials and candidates commit to being fossil fuel free!  To stay up to date on the Fossil Fuel Free Pledge campaign, visit www.fossilfuelfreepledge.org

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