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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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Hammond Climate Solutions representative speaking at a Green New Deal press event

Climate Policy Action - 2021 Highlights

This year’s clean energy and climate justice policy advocacy was filled with ups, downs, wins and loses but the Hammond Climate Solutions team is grateful for the strides we were able to help with to ensure a just and livable future for all. Here is a look back on our policy work in 2021, much of which was done with various partners that we’re grateful to be working with.

This year’s clean energy and climate justice policy advocacy was filled with ups, downs, wins and loses but the Hammond Climate Solutions team is grateful for the strides we were able to help with to ensure a just and livable future for all.  Here is a look back on our policy work in 2021, much of which was done with various partners that we’re grateful to be working with.


Our policy advocacy kicked off with the introduction of California Assembly Bill 1139 (AB 1139), introduced by Assemblymember Lorena Gonzalez in February 2021.  The bill is the most aggressive solar attack to date, and it would have made drastic changes to the rules for California’s net energy metering (NEM), the solar agreement, which would have resulted in payback periods for rooftop solar investments of over 45 years.  In addition to changes for new solar producers, the bill proposed these changes for all existing customers as well, changing the presumed protections for over 1.3 million solar producers statewide.  Our advocacy included meeting with the author of the bill and sponsors to advocate for changes, rallying voices in opposition when the bill was introduced in assembly committees and presentations to local and statewide organizations to collect sign-ons for multiple letters.  Thankfully, we were successful in defeating the bill and in rallying enough opposition locally that none of the six assembly members representing San Diego County, aside from the bill’s author, voted yes.  This was a huge victory as rooftop solar and energy storage is a key solution to stopping the climate crisis, lessening environmental racism, providing grid resilience and supporting green jobs! 


In between the small wins and fights, we have been leading a year-long fight to protect and expand access to rooftop solar during the California Public Utilities Commission (CPUC) proceeding to determine the future solar agreement in the Golden State.  Attacks from the California investor-owned utilities, Natural Resources Defense Council (which has a history of aligning with the monopoly utilities companies, which you can read about here) and other utility-aligned, anti-solar groups have resulted in a proposed decision to drastically reduce benefits for solar customers, making rooftop solar inaccessible to all but the very wealthy.  Hammond Climate Solutions has helped to build a grassroots coalition of environmental and climate organizations, schools, cities, elected officials and more who are all standing up to protect and expand access to rooftop solar.  Through our advocacy and coalition building, we have helped five cities in our region submit letters or resolutions to the CPUC and Governor Newsom, advocating for a strong net energy metering agreement, the agreement that has allowed rooftop solar to become increasingly accessible to working class families, schools, small businesses and nonprofits.  More information on the recently-proposed decision, its impacts and how you can help protect rooftop solar as a climate solution can be found here.


Alongside efforts to protect rooftop solar and expand solar access in communities of concern, locally we were also very involved with a coalition advocating for the City of San Diego to cut ties with a fossil fuel corporation when renewing its gas and electric franchise agreements, which was up for renewal for the second time in a century.  The gas and electric franchise agreements would have determined whether we could build a clean energy future or if we would have been locked into another long term agreement with dirty fossil fuels.  After calling in to countless city council and committee meetings, attending meetings with city council members and organizing rallies and press conferences, we were confident that San Diegans made their voices clear that the broken energy system under San Diego Gas & Electric (SDG&E) was not working, and after over an hour of public comments in opposition to awarding the franchise agreement to SDG&E, the city council disappointed us in a 6-3 vote.  SDG&E promised programs and funding in order to secure the franchise agreements, including a Solar Equity Fund to subsidize solar for low-income families, however after a few stakeholder meetings which Hammond Climate Solutions attended, there has not been any progress in moving the program forward.  We plan to stay engaged with helping shape the Solar Equity Fund to be as beneficial to San Diegans as possible. 


Other energy related advocacy efforts have also included advocating for cities and San Diego County to join San Diego Community Power (SDCP), San Diego’s largest community choice energy program.  This year, San Diego County and National City both joined SDCP, securing a pathway to 100 percent clean energy. 


Although the majority of our advocacy this year has been energy related, we were also involved in a number of wins for building electrification ordinances around the county.  Through our involvement in the San Diego Building Electrification Coalition, we were able to help in successfully urging Encinitas and Solana Beach to pass all electric building reach codes for new construction buildings, a huge win considering buildings make up a significant portion of the region’s greenhouse gas emissions.  In addition to securing building electrification ordinances, we have also helped in advocating for a regional transportation plan, a truly innovative and first of its kind plan that will bring our regional transportation system to where it should be, getting people out of their cars and into other modes of sustainable transportation.  Through our membership with the San Diego Green New Deal Alliance, we have also been advocating for zero carbon policies as well as family sustaining green jobs and a just transition for workers. 


While most of our advocacy and policy work was focused on local and statewide efforts, Hammond Climate Solutions was also involved in a federal advocacy effort in partnership with the California Green New Deal Coalition to encourage a federal infrastructure package that would not only provide much needed funding for failing infrastructure, but also provide funding for climate and resiliency efforts with a focus on creating good green jobs. 


Although this year has had climate activists on the defense fighting against utility attacks, we are hopeful next year will bring legislation and policies that can lead to a productive and meaningful 2022.  In addition to our success in our policy advocacy, we have also had success with the programs that Hammond Climate Solutions manages and with the San Diego Climate Hub collaborations.  To learn more about our other work throughout the year, visit our recent blog post, Celebrating Climate Action - 2021 Year in Review.

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Image of a ground-mounted solar system at a farm that was funded by the Solar Moonshot Program

Solar Moonshot Program - 2021 Highlights

Over the last year, our team had the privilege of managing the Solar Moonshot Program for the second year in a row. In 2021, 42 nonprofit organizations were able to afford the switch to solar thanks to the $1,000,000 budget from Left Coast Fund, collectively installing 42 clean energy projects in 13 states. The Solar Moonshot Program helped energize 1,115.4kW of rooftop and ground-mounted solar and three solar thermal units, which collectively offset 27,800.5 metric tons of carbon, equivalent to over three million gallons of gasoline consumed or the energy usage of over 3,000 homes. These solar projects are creating healthier communities that have cleaner air, a greater quality of life, more green jobs and workforce training opportunities and reduced likelihood of developing health problems such as asthma that occur as a result of pollution.

Over the last year, our team had the privilege of managing the Solar Moonshot Program for the second year in a row.  In 2021, 42 nonprofit organizations were able to afford the switch to solar thanks to the $1,000,000 budget from Left Coast Fund, collectively installing 42 clean energy projects in 13 states.  The Solar Moonshot Program helped energize 1,115.4kW of rooftop and ground-mounted solar and three solar thermal units, which collectively offset 27,800.5 metric tons of carbon, equivalent to over three million gallons of gasoline consumed or the energy usage of over 3,000 homes.  These solar projects are creating healthier communities that have cleaner air, a greater quality of life, more green jobs and workforce training opportunities and reduced likelihood of developing health problems such as asthma that occur as a result of pollution.


Through the generous funding from Left Coast Fund and the partnerships that made these projects possible, communities are reducing their reliance on dirty fossil fuels, supporting the green economy, saving money that is being reinvested in the nonprofits’ missions and creating educational opportunities for community members.  The solar photovoltaic and solar thermal projects simultaneously demonstrate the feasibility of clean energy for community members, many who do not have equitable access to these key climate solutions.


While the Solar Moonshot Program is intended to help nonprofit organizations go solar, tribal nations and communities as a whole can benefit from the funds available through partnerships with 501(c)(3) nonprofit organizations.  Funding from the 2021 budget year assisted a wide range of recipients, from community resilience hubs and community land trusts, to Indigenous communities, school districts and nonprofit organizations providing long-term solutions for houseless folx.


As noted in our Solar Moonshot Program - 2020 Highlights blog post, in early 2020, Hammond Climate Solutions was brought on to manage the “50 Solar States Project” by a San Diego-based philanthropist who provides funding through Left Coast Fund.  This project was the original initiative behind the Solar Moonshot Program and intended to fund one solar project in each state in the U.S.  The urgency of the climate crisis encouraged a pivot to focus on deploying solar as quickly as possible, rather than location, and the Solar Moonshot Program came to fruition as a result.


Along with last year’s $1,000,000 budget commitment, our team’s goal for 2021 was to fund 40 projects, with up to $25,000 being awarded to each participant.  We reached this goal and assisted three solar thermal and 41 rooftop solar projects this year, for an average grant amount of $23,637. Since the program began in 2020, we have been able to help a total of 87 nonprofit organizations go solar!


Projects supported climate justice efforts throughout the U.S., spearheaded by 2021 grant recipients like Community Treehouse Center Detroit, a nonprofit organization that assisted 11 homeowners in the neighborhood of Jefferson Chalmers to go solar.  The community of concern is located on the southeast side of Detroit and is already experiencing disproportionate effects of the climate crisis - efforts led by the organization’s founder and president, Tammy Black, are investing in the community’s future through programs that support persons with disabilities and mental wellness, entrepreneurship, green spaces, clean energy, financial wellbeing and more.  The solar project will help reduce local climate injustices, create climate resiliency and reinvest in the organization’s mission of creating a safe and sustainable community where all folx can succeed.


The following organizations have received grants this past year and are collectively helping combat the climate crisis:



We are excited to announce that we’ll be managing the Solar Moonshot Program in 2022 thanks to generous support from Left Coast Fund and the BQuest Foundation!  Project funding levels and prioritization will be based on the projects' financial need and installation timeline. Nonprofits interested in applying for a Solar Moonshot Program grant can visit the website, www.solarmoonshot.org.  We invite you to follow us on social media to see our #SolarSaturday posts, which highlight the amazing nonprofit organizations going solar and helping create a more just and livable future.  We can be found on Facebook, LinkedIn, Instagram and Twitter.


If you know of a foundation or philanthropist interested in supporting the Solar Moonshot Program in 2022, further expanding our impact, please reach out to Tara at tara@hammondclimatesolutions.com


Photo caption: Solar panel system located at Solidarity Farm in Pauma Valley, Calif., Apr. 8, 2021. (Photo/Aloha Solar Power)

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Solar advocates protesting in front of the state capitol

California Agency Proposes an 80 Percent Reduction in Benefits for Solar Customers

Over the course of this year, Hammond Climate Solutions has released nine blogs, numerous toolkits with calls to action and participated in countless meetings, presentations and webinars to raise awareness about how the monopoly utilities are trying to kill rooftop solar in California. We managed to help grow a local coalition consisting of cities, elected officials, environmental and climate justice organizations and schools. San Diego County residents have made their voices heard, and the message is clear - we want to see solar continue to grow. The highly-anticipated net energy metering (NEM) 3.0 proposed decision was released this week and it is very clear that the California Public Utilities Commission (CPUC) has sided with the utilities and is proposing to make drastic cuts to the benefits of going solar.

Over the course of this year, Hammond Climate Solutions has released nine blogs, numerous toolkits with calls to action and participated in countless meetings, presentations and webinars to raise awareness about how the monopoly utilities are trying to kill rooftop solar in California.  We managed to help grow a local coalition consisting of cities, elected officials, environmental and climate justice organizations and schools.  San Diego County residents have made their voices heard, and the message is clear - we want to see solar continue to grow.  The highly-anticipated net energy metering (NEM) 3.0 proposed decision was released this week and it is very clear that the California Public Utilities Commission (CPUC) has sided with the utilities and is proposing to make drastic cuts to the benefits of going solar. 


The first of many changes to the policy, which has allowed rooftop solar to become increasingly accessible to low and moderate-income families, is drastic cuts to the credit that solar customers receive for sharing their excess electricity with their neighbors.  The proposed decision cuts this credit by 80 percent, from around 25 cents per kilowatt hour all the way down to 5 cents per kilowatt hour.  This immediate change alone is enough to see a major reduction in rooftop solar installations and therefore a reduction in solar jobs across the state, however the decision goes further than making cuts to current credits. 


The CPUC has also sided with the investor-owned utilities to slap solar customers with high punitive monthly fees.  The fees themselves will depend on the system size, however an average system in the San Diego Gas & Electric (SDG&E) utility territory will carry the monthly fee of about $64 per month, the highest in the nation.  This fee is in addition to a loan or lease payment, which disproportionately impacts families who utilize solar financing options to afford the switch to solar. 


Beyond the draconian measures the CPUC and investor-owned utilities have taken to discourage new solar customers, they have gone a step further to impose changes on existing customers as well.  The NEM 1.0 and NEM 2.0 agreements that apply to current customers established a 20 year transition period, whereby solar customers were permitted to remain on their applicable NEM tariff for 20 years from the date of interconnection with the grid.  Therefore, solar customers naturally used 20-year financial models to determine the economic benefit of their investment, but the proposed decision is set to negate the bankability of those projections with a 25 percent reduction in grandfathering periods for existing customers. 


As our local and statewide coalition grew, and after delivering 120,000 petition signatures to Governor Newsom, we were hopeful that the CPUC would be on our side and that we would be advocating for small changes in the proposed decision, however it is clear that the CPUC has sided with the monopoly utilities.  As California continues to see the effects of the climate crisis and fires, flooding and blackouts are becoming more and more common, now more than ever is the time to fight back against this utility profit grab! 


Call Governor Newsom today!  Call Governor Newsom directly at (916) 445-2841 or use the Solar Rights Alliance’s calling tool to call.  Press 6 to speak to a representative or press 3 to leave a voicemail.  A sample script is below: 


 “My name is ___ and I live in ____. I am against the proposal to cut the benefits of rooftop solar!  The high solar fees and cutting the benefits of solar by 80% will kill the solar market and worsen the climate crisis.  Nobody should pay a penalty for putting solar panels on their roof and California should be doing more, not less, to promote rooftop solar.  Please say no to the utilities’ profit grab, and yes to helping millions of working and middle class people get solar.“

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