Long-awaited “NEM 3” Proceeding Kicks Off, Predetermines Future of Customer-Sited Solar + Energy Storage

Yesterday, the California Public Utilities Commission (CPUC) officially opened its much-anticipated proceeding to consider additional modifications to the foundational policy for distributed solar + energy storage, Net Energy Metering (NEM). With a backdrop of Covid-19 that has hit the solar industry hard, blackouts caused by unreliable fossil fuel power plants, and wildfires – widely believed to be a sign of the ever more present impacts of global warming – the CPUC waved the checkered flag yesterday in a decision that will determine whether and how many local solar and solar-charged batteries are built in the coming decade. 

“Solar and storage companies, still struggling to recover from Covid-19, are bracing for a utility-led effort to turn the lights off on the future of rooftop solar and garage batteries,” said Bernadette Del Chiaro, Executive Director of the California Solar and Storage Association (CALSSA). “From nearly every angle – climate change, clean air, jobs, economic stimulus, grid reliability and wildfire risk – growing, not shrinking, these highly reliable and technologically advanced clean energy resources should be a priority for California policy makers.”

The last time the CPUC took up this policy was in 2016 with the “NEM 2.0” decision that gave utilities a win, reducing the rooftop solar market by more than 1,000 MW over the following four years. To put this market loss into perspective, the August 14, 2020 blackout was the result of a shortfall of 500 MW – 1,000 MW of energy generation. 

“As we electrify transportation and homes, and as climate change continues to take its toll, reducing strain on the electric grid and animating innovation and resources at the local level is going to be critical to California’s clean energy future,” warned Del Chiaro. “We really need to stop looking to the utilities and the fossil fuel industry for answers and start looking to ourselves and all the innovation and investments that come from the community level on up.”

The order issued today kicks off a proceeding that will likely get underway with utility input this fall. Some utilities and natural gas companies are already getting their message out with opinion editorials and consumer-facing videos disparaging rooftop solar. The CPUC decision is scheduled to take more than a year to conclude.