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New Policy on the way for California’s Future Rooftop Solar Customers

Policy
Image of a large roof-mounted commercial solar system

In the earlier half of the year, local climate activists rallied to defeat California Assembly Bill 1139 nicknamed the “anti solar bill” in what seemed like a David vs. Goliath Battle, however the utility attacks on solar aren’t going anywhere soon. If you’ve been plugged into the clean energy world, you’ve probably heard about net energy metering (known as “NEM”), the agreement that allows solar customers to be compensated for the excess electricity they share with their neighbors. It is what makes the investment pay off in a relatively short period of time. 


The California Public Utilities Commission (CPUC), the entity responsible for regulating the investor-owned electric and gas utilities in California, has launched a proceeding to re-evaluate the current net energy metering program (known as “NEM2”) and to decide upon a new NEM program, which will be known as “NEM 3.0.”


A total of 17 proposals were submitted to the CPUC for consideration early this year, from parties that range from environmental advocates and climate justice organizations to solar and storage trade associations and of course, the California investor-owned utilities (IOUs). The commissioners will evaluate each proposal based on its cost effectiveness, equity, consumer protection and other guiding principles. Although the batch of proposals is diverse, there are some other factors that have the potential to derail the proceeding. 


The backbone of the proceeding is a study performed by Verdant Associates that analyzes NEM 2.0. The study is flawed in a number of ways but according to comments taken directly from the study, the study fails to take into account a number of externalities, including health benefits from reduced criteria air pollution, the social cost of carbon, out of state methane leakage and land use benefits of reduced rooftop solar as opposed to utility scale desert solar.The study also does not take into account the costs associated with providing reliability and resilience to the grid, which I think everyone can agree, is not equal to zero, as the Verdant Study indicates. Keep in mind, earlier this year the Los Angeles Times reported, How rooftop solar could save Americans $473 billion and how not installing rooftop solar could cost ratepayers $385 billion. 


Furthermore the tool being used to evaluate the cost effectiveness of each proposal is also biased against solar and actually undercuts the value of solar by two thirds compared to the 2020 version of the calculator. The Avoided Cost Calculator was developed by E3 consultants, which have contracts with the utilities and regularly put out bias materials. The CPUC has slipped this update under the radar, without thorough vetting and labeled the update as minor and despite over 7,000 public comments in opposition, the commission voted unanimously to approve the updates. 


With the odds stacked against rooftop solar, a key solution to stopping the climate crisis, reducing rates for all ratepayers and providing grid stability and resilience, it is more important now than ever to make sure we use our voices to fight against utility profits and put the focus where it should be - expanding solar access to communities of concern who bear the brunt of climate change as well as climate injustices and are spending a disproportionate amount of income on utility bills. Please visit our NEM3 toolkit for up-to-date information about the proceeding and for important calls to action.

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Californians rally across the state to show support for rooftop solar

On December 1, hundreds of Californians across the state rallied, presumably one last time, to show their support for rooftop solar ahead of the California Public Utilities Commission's December 15 meeting, where they will vote on an anti-solar proposal.

On December 1, hundreds of Californians across the state rallied, presumably one last time, to show their support for rooftop solar ahead of the California Public Utilities Commission's December 15 meeting, where they will vote on an anti-solar proposal.  

Over the course of two years, the California Public Utilities Commission (CPUC) has had a proceeding open to make changes to the state’s net energy metering (NEM) program, with the investor-owned utilities and their surrogates on one side of the isle advocating for drastic cuts to the benefits rooftop solar customers receive while environmental and climate justice organizations, schools, churches, nonprofit organizations, unions, Community Choice Energy providers, consumer protection groups and others on the opposite end advocating to keep rooftop solar growing in California and to make it more accessible. 

In December 2021, the CPUC released a proposed decision that included a fee for solar which essentially taxed solar customers simply for having solar interconnected to the grid (and providing local clean energy) and included retroactive changes to current solar customer agreements. Thankfully, our coalition of over 600+ organizations across the state representing millions of people put enough pressure on both the CPUC and Governor Gavin Newsom, which caused the governor to publicly tell Californians that the proposal needed more work. Since then, our coalition has continued to hold numerous rallies, call in to several CPUC voting meetings to make public comments (with some public comment periods lasting over seven hours), hold meetings with elected officials and submitting letters to Governor Newsom. 

Finally, last month, the CPUC released their anxiously awaited revised proposed decision, which is still way too extreme and would send solar off of a cliff. The proposal includes a dramatic 75 percent reduction to the credits customers receive for sharing their excess energy with their neighbors. Cutting these credits means solar will not pencil out for nonprofits, schools, churches and working class families across the state. In San Diego where we pay the highest rates in the nation for energy, rooftop solar is the only way for working class families to alleviate the burden of skyrocketing energy costs. Solar and storage is a clean way to provide reliable backup power when the utilities cut off power, which is happening more and more frequently, helping families maintain needed medical equipment while avoiding potentially wasting perishable food.

At the San Diego solar event today, one of 10 in the state held at 11 a.m., activists and solar installers who are concerned over their jobs rallied in front of St. Stephen’s Church of God in Christ, a church that has been a pillar of the community that has just recently installed solar panels to help with the cost of energy bills and be able to reinvest money back into the community. Pastor Glenn McKinney spoke to the CPUC and state leaders directly, “We should be gathering at churches like ours to celebrate going solar, not having to ask state leaders to halt their efforts to make solar less accessible to everyone, especially communities of concern and nonprofit organizations.” He continued by sharing why it's important for rooftop solar to remain an option for communities of concern. “We do not have a robust tree canopy like some communities and it’s getting hotter and hotter here in San Diego where we pay the highest energy rates in the nation. Without rooftop solar, we have no other options than to pay for expensive energy that’s making fossil fuel companies and their shareholders a lot of money while San Diegans are forced to choose to pay their energy bill or medicine or food”.

The CPUC will vote on the proposal on December 15 and our coalition knows the power we have when we stand together and make our voices heard. Please visit helpcleanenergy.org to see how you can help!      

   

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Senator Schumer discussing the Inflation Reduction Act in public

Breaking Down the Clean Energy Incentives in the Inflation Reduction Act

Last month President Joe Biden signed a bill that secured the largest investment in the United States’ history to combat climate change and invest in clean technologies. An analysis of the bill from Senate Democrats predicts that the bill will help the United States lower greenhouse gas emissions by about 40 percent by 2030.

Last month President Joe Biden signed a bill that secured the largest investment in the United States’ history to combat climate change and invest in clean technologies. An analysis of the bill from Senate Democrats predicts that the bill will help the United States lower greenhouse gas emissions by about 40 percent by 2030. 

The Inflation Reduction Act is 730 pages of not-so-easy to read legislation with topics covering healthcare, energy, electric vehicles, corporate taxes and more. Keeping in mind that reading through federal legislation is time consuming and may not be easy to understand, this blog will break down the key points relating to clean energy from the Inflation Reduction Act from the information that’s available at this time. 

Changes to the investment tax credit 

The tax credit that’s received for installing clean energy technologies has now increased from 26 percent back up to 30 percent and will be in effect until 2032. The tax credit will be available for both residential and commercial projects installed this year and moving forward. The investment tax credit will decrease to 26 percent in 2033 and 22 percent in 2034. 

The biggest change relating to the tax credit is that it includes a direct pay provision for a nonprofit or a state, local or tribal government. Previously, those entities were not able to use the tax credit available so often entered into power purchase agreements or leases to utilize the tax credit. We are excited for our nonprofit Solar Moonshot Program participants, which will now be able to utilize direct pay and own their systems outright from the day their rooftop solar power systems are energized. Unfortunately, residential customers are not eligible for the direct pay provision, however, residential customers who do not have the tax appetite to make use of the tax credit, are now about to transfer or sell the credits. 

There are also a number of adders that may increase the percentage of the tax credit. An additional 10 percent is available if the system is installed in an area with significant fossil fuel extraction or a brownfield. Another additional 10 percent is available for using domestic materials, which requires all steel and iron to be sourced from the United States and 40-55 percent of the value of manufactured products to be from the United States.  Finally, an additional 10 percent adder is available for solar projects that sell their electricity via community solar to low income households. The adders are also stackable meaning if a project has the 30 percent tax credit, a 10 percent adder for domestic materials, a 10 percent adder for being located in a fossil fuel community and another 10 percent for being a community solar project, the tax credits could potentially reach up to 60 percent of the total system cost. 

Prevailing wage and apprenticeship requirements 

New employment requirements exist for large clean energy projects 1MW or more. In order to be eligible for the standard 30 percent tax credit, workers installing solar projects must be paid prevailing wages and be part of an electrical apprenticeship program. Violations will not only result in projects unable to claim up to 24 percent of the 30 percent tax credit but also heavy fines of $5,000 for each worker who is underpaid. Furthermore, if the inability to meet the wage requirements is found to be intentional, the fine will double to $10,000 per worker.  

Additional incentives and information

There are many other investments in the bill including tax credits for electric vehicles, electrical panels and more. There are also details that are not determined yet, for instance about the time it will take for direct pay to be paid out, which we’ll update you on as the information becomes available. Sign up for our newsletter to be notified when part two of this blog, which will dive into transportation investments, is available.

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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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