The Additional Costs of Extreme Flex Alert Days

On September 6, 2022, when California’s electricity demand managed by CAISO peaked at its historic highest level of more than 51,000 MW, utilities in the CAISO market spent approximately $600 million in energy payments. This single-day expenditure compares to approximately $150 million spent on energy purchases one week prior, a seasonably hot summer day without a grid emergency.

CALSSA’s analysis used the average hourly price across all pricing locations, matched to CAISO published hourly load. Actual prices vary across locations and within hours. Measuring true costs would involve five-minute load data for each pricing node, matched to the pricing for that node. However, this simplified analysis produces a credible approximation and sense of scale.  

Tuesday, August 30 was used as the comparison day because it was the same day of the week one week prior, and was a hot day but not above normal hot conditions. The high temperature in Fresno on August 30 was 103 degrees, compared to 114 degrees on September 6. Comparing data from an extreme day with a day of high electricity usage but not extreme conditions demonstrate how much cost is involved in the small number of days that are beyond typical conditions – an increasingly common event due to climate change. Energy usage was 23% higher on September 6 than August 30, but costs were four times as high. 

Behind-the-meter energy storage can reduce or eliminate the grid risks due to extreme conditions. Investments in energy storage have lasting benefits for the lifetimes of the systems, while extreme conditions cause enormous costs in a single day. CALSSA’s analysis shows behind-the-meter batteries supplied more than 300 MWs or 600 MWhs of power on September 6, 2022.

Solar Photovoltaic (PV) Panels : Reusing, Recycling, & Disposal

California has seen rapid growth in the use of solar photovoltaic (PV) panels to generate electricity for homes, businesses, schools, farms, utilities, and more. Solar energy is a critical part of California’s efforts to cut air pollution, reduce the use of fossil fuels, and stop the worst impacts of climate change.

In 2002, California passed the nation’s first renewable portfolio standard, mandating electric utilities invest in solar and wind power. A few years later, in 2006, California launched the Million Solar Roofs Initiative to incentivize consumers and businesses to invest in solar energy. Consequently, as of 2021, 20 percent of California’s electricity came from instate solar. Approximately 65% of the state’s solar PV market is found in the utility-scale sector, typically large industrial-scale power plants in the desert regions, while 35% is located on rooftops or on ground-mounted systems at schools, parking lots, and farms.

With a typical 25-year lifespan for most solar PV systems, the majority of solar panels installed in California are still in use today. Like many consumer electronics, solar PV panels can be reused or, once they reach the end of their useful life, they can be recycled. However, reuse and recycling practices need to be supported and promoted. Industry, consumers, and the government can work together to reduce the number of solar PV panels that unnecessarily end up in landfills by increasing reuse and recycling opportunities and practices. Understanding the facts is an important part of building a sustainable energy system.

What is a solar PV panel made of?

There are two types of solar PV panels commonly used today. The most popular, making up 95% of the global market, are crystalline silicon (c-Si). These solar panels are commonly installed on homes or as ground-mounted systems. The panels are rectangular-shaped, and made of an aluminum frame with a glass top and a light polymer backside. Solar panels also have a junction box, which is a small box containing electrical wires on the underside of a panel. Approximately 80% of the solar panel is made of these recyclable materials, which can be recycled relatively easily. The rest of the panel, chiefly the solar photovoltaic cells made of silica (which comes from sand), can be recycled with available specialized machinery. In total, over 95% of a crystalline silicon panel can be recycled.

The other kind of solar PV panels is called thin film, making up approximately 5% of the global market. Many utility-scale solar power plants, as well as some distributed systems such as solar shingles, use thin film. Thin film can be made of thin glass, plastic sheeting, or metal with the photovoltaic material deposited on top in one or more layers. Thin film systems can also be recycled. 

Do solar panels contain selenium and cadmium? 

The answer to this question is primarily no. In fact, it is a common misconception that solar panels contain large amounts of heavy metals of any kind. Crystalline silicon solar panels, making up 95% of the global market, do not contain any amounts of selenium or cadmium. They can contain small amounts of silver, which technically is classified as hazardous, and lead, used in soldering of electrical components, comparable to what is found in household electronics. Some thin film solar panels do contain selenium, cadmium, or other heavy metals. All of these metals are housed as part of the solar panel itself and do not leak out or expose the surrounding environment unless the panels are crushed.

When can solar panels be reused?

Solar panels are typically warrantied for 25 years. Because there are no moving parts to break or wear out, many of the solar systems that were built more than 25 years ago are still in operation today. Solar PV panels do lose some of their efficiency over time, however, motivating some solar users to replace older, but still functioning, panels with newer more efficient panels.

There is a thriving market for second life solar panels made possible by marketplaces like Energy Bin and a number of companies that specialize in decommissioning solar installations and redirecting the used panels to other customers. The original customers are often eager to resell the used panels, pocketing the funds or using them to offset the cost of a newer system, and the new customers are often eager to buy the panels at discounted prices. There are also companies finding innovative ways for second life panels to generate low-cost clean electricity for power industrial processes that otherwise would have used fossil fuels. 

Solar panels that are not broken or defective also are donated to nonprofits such as Habitat for Humanity.

When are solar panels retired?

Solar panels are retired if they are broken or no longer work due to disasters, such as fire or hailstorms, old age, or damage during shipping and installation. Some reduced-efficiency panels are retired instead of reused. In all these cases, solar panels are ideally recycled rather than deposited into a landfill.

Can solar panels go into a landfill?

In California, solar panels can be legally disposed in conventional landfills but only after verifying that the panels do not contain hazardous materials. Designated laboratories commonly provide this verification via testing that can cost upwards of $1,500, which is more than most homeowners are willing to spend. If a solar user does not have the funds to conduct this specialized test and cannot obtain a record of the manufacturing materials another way to verify the absence of hazardous materials, the state of California considers the panels to be hazardous waste by default, triggering complicated rules for disposal and recycling.  

How do California regulations limit the ability to recycle solar panels today?

The California Department of Toxic Substances Control (DTSC) classifies solar panels that have not undergone the verification process for hazardous materials discussed above as universal waste, which is a type of hazardous waste. A common form of universal waste is pesticides, which are well known to be toxic and can be more difficult to handle than solar panels. Because solar panels are listed as universal waste by default, recyclers are prohibited from using basic techniques that use heat, chemicals, or water in their recycling processes. Additionally, the procedure to permit a recycling plant is difficult in California. As a result, recyclers that serve the California market often set up facilities in neighboring states. As of July 2022, California had one recycling plant accepting solar panels.

Because solar panels are classified as universal waste, anyone who wishes to bring the panels to a recycling facility must follow strict and costly notification, transportation, storage, training, reporting, and recordkeeping requirements. 

While the DTSC’s justification for the austere recycling and handling regulations is that some solar panels contain toxic substances, as discussed above, many panels do not have any toxic substances and those that do have small amounts comparable to household electronics, such as flat screen TVs. Household electronics are classified by DTSC as e-waste. E-waste rules are less restrictive than universal waste which, in turn, promotes recycling and responsible disposal practices. Most cities and counties offer easy-to-use e-waste disposal services for homes and businesses. These opportunities do not exist for solar panels, today, which runs counter to state recycling goals.

$1.8B Solar Tax on Table Under NEM 3. Solar Cliff Remains a Threat.

The CPUC issued a ruling on May 9, 2022 re-opening the official record of the NEM 3.0 proceeding, doubling down on the solar tax and continuing to cling to the highly flawed “Avoided Cost Calculator” for determining the value of solar energy - both of which could be very damaging to the market.
 
Equally important to the questions that were asked are the questions that were not asked, namely about fixed charges that would be additional to monthly fees and retroactive changes to NEM 1.0 and 2.0 customers. As far as we can tell, both those items remain on the table. The 14 questions posed yesterday are broken down into three categories: 1) A Solar Tax; 2) A Glidepath; and 3) Low-Income Community Solar.
 
A Solar Tax Still on the Table for Both Residential and Commercial Solar

The CPUC has clearly not gotten the message that taxing solar energy is a bad idea, is highly unpopular with voters, and runs counter to California’s decades-long history of supporting energy conservation and efficiency.
 
Whether in addition to or in place of the Grid Participation Charge proposed in December it is unclear, the new ruling seeks input on the idea of charging fees on self-consumption. The Commission is contemplating charging solar users, commercial and residential, a per kilowatt-hour fee for energy that is generated on-site and consumed behind the meter. The fee could cover any, or all, of the following 11 categories:

1. Public Purpose Programs (e.g. energy efficiency incentives and CARE)

2. Wildfire liability

3. Legacy charges from utility sale of power plants 25 years ago

4. Nuclear Decommissioning

5. New System Generation

6. Reliability Services

7. PUC Reimbursement Fee

8. Energy Cost Recovery Account

9. Wildfire Hardening

10.  Local Generation

11.  Departing load charge (Power Charge Indifference Adjustment)

Combined, these charges would amount to 5 cents/kWh if all eleven categories were included, or around $600 per year for a typical residential system, or $1.8 billion if applied to the 150,000 new solar customers signed up each year over the life of the system. Further, there is no guarantee that the charges wouldn’t increase in years to come. The CPUC specifically asks how they would go about adding more charges in the future.
 
No matter the size of the fee, the concept is wrong-headed. California spends billions of dollars every year incentivizing energy efficiency and conservation. The California Energy Commission touts how these programs reduce electricity consumption by more than 70,000 gigawatt-hours per year, saving ratepayers more than $100 billion dollars in electricity costs over the past forty years.[1] Bravo, California! It is good to use less electricity, right?
 
Apparently not when it comes to solar. Here, if a solar user becomes one of the most advanced energy efficient consumers in the state by generating their own electricity right on-site, they are not doing enough and are going to be charged a fee for that electricity. 
 
With the electrification of buildings and transportation, California is going to see electricity sales skyrocket in the next decade. By 2030, California will consume an additional 33 terawatt-hours of electricity if we meet state electrification goals.[2] Even if distributed solar were to continue apace, it will not come close to covering that increased demand. And, as we all know, solar consumers are more likely to electrify, increasing their overall use of electricity.
 
There is a long-standing tenet of good public interest policy: don’t tax good behavior. This idea violates that rule. 
 
The Glidepath

Eight of the fourteen questions concern the “glidepath” which is code for how quickly the Commission can reduce the value of solar electricity exported to the grid without harming the market. And while it is good that the Commission acknowledges their legal obligation to ensure that distributed solar continues to “grow sustainably”[3], you could fit a nuclear power plant in the space between how the utilities define “sustainable growth” and how anyone with common sense would define it. And it remains undefined here.
 
CALSSA proposed in March 2021 that the Commission keep export credits tied to retail rates but slowly inch downward as a percentage of retail over the course of eight years. This declining credit structure would incentivize and allow for the development of the energy storage market while giving consumers a predictable value for their solar investment. Instead of that structure, the Commission continues to focus on the flawed “Avoided Cost Calculator,” developed and run by utility-consultant E3.
 
The Commission updated the “ACC” just last week. The updates fail to take into consideration the increased price of natural gas or to consider the full extent of increased demand due to electrification. And they turn a blind-eye to the challenges the utility-scale industry faces building projects in the next few years. Such flaws lead to a falsely low “value of solar” that then forms the basis for rock bottom solar export values. The Commission is considering an ACC plus some adder, to be determined, to dampen the blow of going down to ACC right away. If the “plus” is large and sustained across many years, perhaps “sustainable growth” can be achieved but the likelihood that the Commission could muster the political will to truly make up for the deficiencies in the ACC values when they just approved flawed values last week without hesitation is a longshot.
 
We Must Drive Deeper Equity in Solar
 
In promoting California’s distributed generation market among low-income customers and in communities of concern, CALSSA proposed that the Commission adopt a “NEM 2.0 Plus” approach along with changes to virtual NEM. We have long advocated (dating back to 2015) that customers on ratepayer assistance (e.g. CARE) receive full-retail credit for their exports, not discounted credits per their reduced rate. This would make rooftop solar more cost-effective for working families, not less. But the Commission seems to be looking at the low-income market as something to inflict a little less pain on (compared to the mainstream market), instead of how to incentivize it further than it is today and drive deeper equity. The questions being asked today are: How do we make NEM-3 less bad for low-income ratepayers compared to the general market? Instead of asking: How do we make NEM-3 an even better deal for low-income ratepayers, further driving adoption and equity in the market? The new ruling also puts forward some vague questions about community solar which the Commission has tried to establish many times already but has never moved past utility opposition. 
 
CALSSA will get to work on Opening Comments due June 10 and Reply Comments due June 23. After that, the Commission would be expected to take time to consider the comments, incorporating them into a revised proposed decision, before scheduling a vote. If the Commission moved uncharacteristically fast, the revisions could be out as early as late July and a vote late August.

[1] California Energy Commission, Energy Almanac 2020

[2] CPUC, “Utility Costs and Affordability of the Grid of the Future,” p. 84, February 2021.

[3] Language in AB 327 passed in 2013.

Guest Blog Post: Contractor Law & 1099 Risks

This blog post was written for CALSSA by Joel Van Parys of CDF Labor Law

It is tempting for companies to contract with workers for aspects of their business. If lawful working with contractors generally saves money. But California law strongly prefers that workers be classified as employees and makes it very difficult to legally have contractors for significant parts of a company’s business. There are some situations where contractors make sense and others that create substantial risk.

To properly be considered a contractor a worker must satisfy each of the following factors: (A) the worker is free from the control and direction of the contracting entity with the performance of the work, both by the terms of the contact and in reality; (B) the worker performs work that is outside the usual course of the hiring company’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

In short, this means that the company cannot control the way the contractor does his work. That must be written in the contract and be true in practice. For example, if you contract with an IT professional to run your company’s computer network you cannot tell that person that they have to work 9:00 – 5:00. The second part of the test is the hardest to satisfy. That part means that the contractor cannot perform work that is a usual part of the company’s business. For instance, if a solar installer contracts with workers to install panels it is almost certain that those workers are misclassified. However, information technology is probably not the company’s business so contracting with an IT professional probably passes this part of the test. The last part of the test means that the contractor must have an independent established business that regularly does the same type of work they are performing for your company.

Many solar companies consider working with contractors for various aspects of their business. As discussed above, it is very likely that solar installation companies cannot lawfully contract with workers to install solar panels. But there are other aspects of the business that may be good situations for contractors. For instance, some solar companies may be able to contract with workers to sell their products. Whether this is legal depends on the facts of that situation – is there a contractor agreement; what does it say; does the Company conduct any sales activities itself; how does the Company work with sales staff; do the sales people have their own companies. These are just several factors that could determine whether that sales person can properly be classified as a contractor.

If a company is considering contracting with workers for any positions closely related to the way it does business, installation or sales work for instance, we strongly recommend working with your attorney to ensure that the job can properly be classified as a contractor and, assuming it can, to properly set up the contractor agreement and help form best practices for dealing with the contractor. Taking these steps will help companies avoid the substantial monetary risk that comes from misclassification, including unpaid overtime, payments for missed meal and rest breaks, unpaid reimbursements, and penalties.

Further Delay in NEM-3 Decision

The Administrative Law Judge in the NEM-3 proceeding at the CPUC has issued a notice indicating that we should expect more time to pass before they issue a revised proposed decision. It says a decision will not be scheduled for a vote “until further notice.”

Please do not mistake this unusual announcement for victory in protecting solar in California. It does indicate that the Commission will not rubberstamp the December proposed decision, but the debate is far from over. The notice states that “additional analysis” is being conducted. In our view they already have what they need to make the right decision, so additional analysis may have more to do with new ways to make the solar market difficult than ensuring changes do not go too far. 

Despite strong opposition from people throughout the state to putting the brakes on solar opportunities for all Californians, anti-competitive solar opponents are continuing to push their drastic changes to net metering. The CPUC has to stand firm and issue a reasonable decision without letting bad ideas sit uncorrected.

CPUC’S Proposed NEM-3 Decision Would Hurt Low-Income Solar Adoption

By 2030, California needs to shut down dirty power plants by building a million sun-charged batteries on apartments, housing developments, schools, and churches and throughout our most polluted communities. Achieving this goal will help put an end to California’s heavy dependence on fossil fuels and bring the benefits of clean energy to all communities. If done right, changes to net metering in 2022 could increase the adoption of solar and energy storage systems in California’s environmental justice communities and among low-income and working-class families. But surprisingly, this is not what has been proposed by the California Public Utilities Commission (CPUC). Instead, the CPUC’s proposed NEM-3 decision makes solar and batteries more expensive for everyone, including low-income consumers.  

First, the proposed decision would impose large new fees on California families. These fees would be the highest in the nation, adding up to more than $600 per year. These fees, alone, would bring the solar market in California to a screeching halt. While some low-income consumers would be exempt from the proposed fees, not all would.[1] The fees alone would turn the clock back on achieving greater equity and inclusion in the California solar market by making rooftop solar nearly twice as expensive as it is today.

It gets worse. The proposed decision would also reduce the value of solar electricity sent back to the grid on hot summer days by 80% for the general market and 70-75% for those on income-based assisted electric rates. This immediate reduction in the value of solar makes it harder for a rooftop solar system to pay for itself in bill savings in a reasonable amount of time. A simple payback of a rooftop solar system for a consumer on CARE rates, for example, goes from 9.5 years on average under today’s net metering policy to 12 years under the proposed NEM-3 decision. Achieving equity within California’s clean energy markets will become even harder, and that’s accounting for the proposed bill credit explained below. 

Seemingly to acknowledge the problems with the new penalty tax on solar, the proposed decision would offer a bill credit to new solar customers on a temporary basis. The amount of that credit is higher for many of the low-income customers who are exempt from fees, though not all. However, this credit isn’t high enough, even for targeted low-income consumers, to make up for the 70-80% reduction in value for solar, hence the reduced payback period described above. In other words, even with the proposed bill credit, rooftop solar still becomes more expensive, not less, for low-income consumers. 

Here are more details by the numbers:

• The short-term credit is $26 per month for an eligible low-income PG&E customer (compared with $10/month for the general market) and $31 for an SCE customer (compared with $21/month for the general market), assuming they install an average-size system (the credit is less if a customer installs a smaller system). The credit isn’t available to customers of SDG&E, no matter their income.

• A customer would get this credit for no more than 10 years.

• The credit would be “transitional,” meaning that it would only be given to customers who go solar in the first four years. And the amount for new customers will decrease 25% each year. For example, a PG&E customer who signs up in year 2 gets $19.50 per month, and by year 4, new customers will get only $11 per month.

• The proposed decision includes a fund of not more than $150 million per year over four years to expand solar access to low-income households and disadvantaged communities. Yet, there are no details provided as to how that money would be spent. While the fund has the potential to do some real good, it is treated in the proposed decision as an afterthought with no details and development of new programs has historically taken years with mixed success. 

For renters, the proposed rules are a mixed bag, with more bad news than good. Low-income multifamily properties that participate in solar incentive programs (Solar on Multifamily Affordable Housing [SOMAH] and Multifamily Affordable Solar Housing [MASH]) temporarily keep the existing “virtual net metering” rules that have helped these programs bring solar to low-income renters across the state. But the good news is short lived because changes could come within the next few years. The proposed decision has only delayed decisions about changes to these rules until the CPUC can review information about affordability. We can’t predict what will happen after that review. 

Further, not all low-income affordable housing projects qualify for the SOMAH or MASH programs, leaving gaps in solar adoption around the state. And other multifamily apartment buildings are being shifted onto the new rules that come with high monthly fees and a slashing of solar credits. Because of how the rules work for these buildings, all solar energy is treated as exports, even if it’s used by customers on the property. This would effectively shut down all solar development on apartment buildings that are not federally subsidized. 

Lastly, the proposed decision explains that the CPUC will conduct an evaluation of “equity elements” after the new rules have been in operation for five years. This has the potential to be helpful, as it might make the CPUC realize that its policies have been more harmful than they thought and could lead to positive changes. But on the other hand, it means there’s more uncertainty—the rules could change after that five-year evaluation, and there are no guarantees beyond that. Equally important, waiting five years to revisit equity goals is a long period of time. In five years, California needs to be well on its way to building a 100% clean and reliable electric grid.   

As California looks toward a clean energy future, it’s hard to imagine that state policies would make it harder for low-income customers to play a central role in that future. Solar and energy storage should be more affordable, not less, for all consumers and especially low-income families and environmental justice communities. California should not return to the days when solar was affordable only for the rich. Net metering is a policy that could drive solar adoption and achieve greater equity in clean energy, but the details matter. The CPUC should offer an alternative decision that gets California where it wants and needs to go: which is, solar and sun-charged batteries for everyone to create a more resilient, affordable, and clean energy grid with jobs and economic opportunity in every community and clean air for all. 

____________________________

[1] For example, the proposed decision would exempt customers who are eligible for California Alternate Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) rates from the $600 per year solar fee. This exemption would apply to consumers with incomes no greater than 200% and 250% of the federal poverty guidelines, respectively—or, $43,920 and $54,900 for a family of three in 2021-2022. The exemption also applies to single-family homeowners in state-designated “disadvantaged communities,” and some residential customers in California Indian Country. This exemption from the fee leaves out a lot of people who are having trouble making ends meet, as well as many renters, including those in affordable housing developments. 

CPUC Is Fabricating a Lie to Justify a Bad NEM-3 Proposal

The California Public Utilities Commission’s proposed NEM-3 decision is based on a lie.  

The proposed NEM-3 decision authored by former commissioner Martha Guzman Aceves claims that it would result in a ten-year payback period for solar and storage.[1] To claim this, it uses a solar cost of $2.34 per watt. This number comes from a research project that tracks the costs of basic components of solar systems – not the installed cost to the customer of the system as a whole but the underlying costs of major pieces of the system.  

These tracked costs include the panels and inverters, plus the labor costs for an installation that is free of all complications, but do not include real world costs of running a contracting business, navigating the inconsistent permitting process, or installing components that are needed for many homes. All of these added costs are quite dramatic in a state like California. It is a useful exercise to track basic costs over time to understand trends in core costs, but to pretend this represents the real-world costs that customers face is a fabrication. Furthermore, as California aims to achieve deeper and deeper penetration of rooftop solar on lower and moderate-income homes, costs are likely to go up. For example, many older homes have antiquated electrical equipment and require a panel upgrade to host a solar and energy storage system. These added costs are not factored into the static and idealized cost of $2.34 per watt that the CPUC used to justify their proposed decision. 

Lawrence Berkeley National Lab produces an annual report on the solar costs actually paid by customers in the real world. The most recent report shows that residential customers in California paid an average of $3.87 per watt in 2020. Hence, the CPUC is only counting 60% of the actual cost of solar. 

The California solar market is fiercely competitive, with 185 contractors that install at least two systems every week and 740 contractors that install at least one per month. It is not possible to charge more than what is justified by actual costs because someone else will outbid you if you do. Solar companies operate on thin margins. This is, of course, good for consumers but it spells trouble for the entire solar market ecosystem if the Commission gets the math wrong for everybody. 

The CPUC’s proposed decision also errs in claiming that a ten-year payback period is sufficient to sustain today’s solar market. That number is contrary to many years of experience. Even if the decision hits the ten-year market accurately, it will result in market downturn. On average in California today, solar pays for itself in around six years, assuming a federal tax credit is taken. It is well-known that increasing the payback to 10 years or beyond would significantly reduce the number of consumers willing to invest their own money in solar, and the market would decline immediately. This has been experienced by other states including Hawaii, Nevada, and Arizona.

The proposed decision as a whole would put the majority of solar contractors out of business. This would result in the loss of tens of thousands of jobs while hurting the ability to provide solar at affordable prices to low and moderate-income Californians. It would threaten the ability to cost-effectively mandate solar on new homes, and it would be an abandonment of our long-term carbon reduction targets. 

To say that we can make up for a reduction in rooftop solar with more large-scale solar farms is folly because we are already pushing the limits of industrial solar development to meet our goals even if we continue installing solar in our already-developed cities and towns. 

The CPUC is attempting to manage the solar market with top-down regulation based on bad math. If it continues on that path, it needs to rely on real data rather than picking numbers it finds convenient to justify a pro-utility decision, and using them out of context.

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[1] Many California consumers opt for a power purchase agreement, or “PPA,” for their solar systems to avoid the up-front cost of going solar which is around $23,000 for the average home before the federal tax credit. However, around 60% of California consumers opt to own their solar system outright, paying for it with savings or more commonly financing it through a loan. One way to measure the value of the solar investment is through a simple payback calculation. Simple payback takes annual utility bill savings and calculates how many years it would take for the upfront investment in solar to pay for itself. For example, if the solar system cost a homeowner $21,000 and saved the homeowner $2,000 in annual utility bill savings, the solar system would pay for itself in 10.5 years. 

CPUC’s Proposed NEM-3 Decision Will Hurt the Growth of Energy Storage in California

A million sun-charged batteries by 2030: this is what California needs to create a more stable electric grid while bringing down costs for everyone. If done right, gradual changes to net metering could increase the adoption of solar and energy storage systems in California, critical in achieving the state’s clean energy goals. But this is not what has been proposed by the California Public Utilities Commission (CPUC).    

The proposed decision by a former commissioner gets it wrong by a long shot. It would undercut efforts to increase storage adoption by destroying the solar market that energy storage depends upon. By taxing the sun, the proposed decision would make batteries, along with the solar panels they depend upon, at least twice as expensive as they are today. 

The math is not difficult to follow. 

The proposed NEM-3 decision would impose new fees of $600 per year for a typical residential solar customer. It would also reduce the value of net metering credits by 80% for residential and commercial customers alike. For the typical residential customer, the value of the energy sent back to the grid will be reduced to about $20 per month, or $240 per year. The proposed decision would give the first set of NEM-3 customers a credit of $120 per year, but this would still leave a deficit for customers. The $240 in annual credits for surplus power sent back to the grid plus the $120 for the early adopters, is less than the $600 per year fee. Solar, whether you add a battery or not, would get more expensive under NEM-3. Net metering would become a bad deal that nobody would take, even without considering the cost of installation which is still around $17,000 for a solar system and $28,000 if you add a battery (assuming federal tax credit). Somehow the CPUC failed to do this basic calculation. It is important to note that solar would get more expensive for low-income ratepayers and affordable housing developments as well. 

Now, adding a battery would increase monthly savings by about $480 per year according to the CPUC’s own modeling. This is due to the higher differential between daytime and evening prices under the proposal. That is nearly $5,000 over ten years, which does not come close to covering the added costs of energy storage, still in its infancy as a market. In other words, adding a battery to a solar system would not turn a bad deal into a good one. The CPUC would be taxing the battery’s fuel source and harming the overall economics of the packaged solar plus storage system. This is bad news for solar, bad news for storage, and bad news for consumers hoping to get out from under rising energy bills, continued wildfires, and an increasingly unstable grid.  

A better approach is not to create punitive fees at all. California should not add a fee to electricity that comes from the sun, period. California should gradually increase the value of evening electricity (whether self-consumed or exported to share with neighbors in the evening), while decreasing the value of day-time exports to further drive solar-paired storage systems. This would encourage customers to send less electricity to the grid for NEM credits, using batteries to consume the power themselves in the evening. Making this change gradually over the course of many years would push customers toward batteries without destroying economics of their fuel source: the sun.   

Today there are about 65,000 customer batteries installed throughout California. That number needs to be fifty times what it is today to achieve the state’s ambitious 100% clean energy goals. The utilities and their allies see customer-sited solar charged batteries as competition and are trying to wipe out customer opportunities, but solar-charged batteries are exactly what California needs. 

Manufacturing capacity to produce batteries is expanding in the U.S. and around the world. Electric vehicles and home energy systems are competing for battery cells. It will take several years before we can expect every solar system to come with a battery; today, around 16% of solar customers are adding a battery. The market needs time and thoughtful policy to get to 100% adoption. Driving solar contractors out of business during this period of transition is exactly what the utilities want but it is exactly the opposite thing that California needs. The CPUC should stand up to the anti-environmental and anti-consumer proposals from the utilities and their allies and create sensible policy that will show the world how to build a clean and stable electric grid in the 21st century.

Under NEM-3 Proposal, Solar & Storage Become More Expensive, Even for Low-Income

CALSSA analyzed the NEM-3 Proposed Decision issued on December 13 and found that it increases the cost of solar and extends the simple pay-back (just one measure of value to the consumer) for all residential customers, including low-income consumers. Commercial projects will be equally hard hit. Energy storage will also not escape the fees and be harmed as well.

The estimated savings show above are the high water mark for low-income consumers. Because the Market Transition Credit declines and lasts only four years, payback periods will increase and monthly bill savings will decrease year after year.

NEM-3 Proposed Decision

California’s utility watchdog agency appears to have sided with PG&E and the other large investor-owned utilities today in a much-anticipated proposed decision on net energy metering that, if approved next month, will make rooftop solar and customer-owned batteries more expensive and therefore out of reach of working- and middle-class consumers. You can view the full proposed decision here.

While CALSSA is still doing in-depth analysis of the proposal, at first glance, the California Public Utilities Commission (CPUC) proposal for modifying net metering program would make the following changes:

Solar Fees

• The PD includes large new monthly charges for residential solar customers.

• PG&E: $8 per kW of installed solar capacity. This is $48 per month for a customer with a typical solar system size of 6 kW.

• SCE: $8 per kW of installed solar capacity plus $12 per month. This is $60 per month for a typical customer.

• SDG&E: $8 per kW of installed solar capacity plus $16 per month. This is $64 per month for a typical customer.

• Low income customers are exempt from the monthly charges.

• There are no new fees for commercial solar customers.

NEM Credit Value
Export compensation is based on values directly produced by the Avoided Cost Calculator. More analysis is needed, but the value appears to be approximately 5 cents/kWh. This is a reduction from 20-30 cents/kWh today for residential customers. There is no transition glidepath, so the full reduction takes effect as soon as NEM-3 is implemented. It has different values for each hour of the day rather than consistent values within time-of-use periods.

Rates
Residential customers who are not low-income are required to be on certain rates. These rates include monthly charges of $12 per month for SCE and $16 per months for SDG&E, and are included above under Solar Fees.

Incentives
There is a temporary upfront incentive for residential solar customers known as a Market Transition Credit.

• PG&E low-income: $4.36 per kW per month for ten years. For a 6 kW system, this is $26 per month.

• PG&E non-low-income: $1.62 per kW per month for ten years. For a 6 kW system, this is $10 per month.

• SCE low-income: $5.25 per kW per month for ten years. For a 6 kW system, this is $31 per month.

• SCE non-low-income: $3.59 per kW per month for ten years. For a 6 kW system, this is $21 per month.

• There is no incentive for SDG&E.

• There is no incentive for commercial customers.

• A new fund of $150 million per year is created to fund solar for low-income customers. All details will be worked out later.

Retroactive Changes
Current 20-year eligibility period for NEM-1 and NEM-2 is reduced to 15 years for non-low-income residential customers.

Start Date
The PD is scheduled for a final decision on January 27. The new tariff will be effective four months after a final decision (May 28).

Next Steps
The fight is not over! Consumers, affordable housing advocates, faith leaders, environmentalists, conservationists, climate activists, and solar workers and small businesses will continue calling on the CPUC and Governor Newsom to stop the utility profit grab and keep solar growing in California.

Join us! Make your voice heard!
Save our Solar Jobs Rally

SAN FRANCISCO & LOS ANGELES | JAN 13 @ 11 AM

Rooftop solar “spills” in 1 hour enough energy to offset all the oil spilled in Orange County

READ OUR FACTSHEET ➤

The energy contained in the 25,000 gallons of oil spilled on the beaches of Orange County last month is offset in just one hour by the energy exported to the grid by California’s customer-sited rooftop solar systems, according to a recent analysis by the California Solar & Storage Association (CALSSA).  In other words, the 1.3 million customer-sited solar systems located mostly on roofs of homes, schools, and apartment buildings thanks to policies like Net Energy Metering (NEM) export to the grid as much energy in one hour as was contained in the 25,000 gallons of oil spilled near Huntington Beach last month. The energy that isn’t “spilled”, or exported, onto the grid is used onsite by the home or school or business that hosts the solar system. In total, today’s rooftop solar systems produce twice as much energy every hour as recently contaminated the beaches of Orange County.

For those wanting to do something positive for the environment, this same analysis shows that it takes just four rooftop solar systems operating for their estimated lifetime (20 years) to displace the 25,000 gallons of oil. Approximately 1 in 10 buildings in California host a rooftop solar system. Combined, these systems have more than 10 gigawatts of clean energy capacity (NOTE: A nuclear reactor is typically around 1 gigawatt). According to the National Renewable Energy Lab (NREL), California could host nearly 130 gigawatts of solar on rooftops throughout the state. This means California could really go a long way toward getting off oil by doing more to invest in rooftop solar.

The current debate around Net Energy Metering, as was reported on yesterday by Sammy Roth of the Los Angeles Times, is crucial to the future growth of rooftop solar in California. Utilities are lobbying the Newsom Administration to gut the program making solar more expensive for everyday consumers. Doing so would hamstring the state’s efforts to get off oil and cost ratepayers billions in higher utility bills, not to mention the cost of events like the Orange County oil spill.

CALSSA is joining with allies to call on Governor Newsom to stand up to the utilities and stand up for consumer solar. People are encouraged to sign a public comment to the governor and the California Public Utilities Commission to support a strong rooftop solar market.

Biden’s Solar Blueprint & CALSSA’s Reaction

President Biden’s Department of Energy put out a Solar Futures Study laying out a blueprint for how America can fully decarbonize putting the greatest emphasis on solar energy. The timing of this study couldn’t be better as some California decision makers consider buckling under pressure from utility interests to do the opposite of what President Biden is calling for: speed up the growth of solar, not slow it down.

In response, the CALSSA team jumped into action putting out this statement, getting quoted in the New York Times, and joining CNN for a live interview that ran around the globe.

To continue to fight for the growth of solar, CALSSA has launched a $1 million fundraising campaign. Please consider donating and CALSSA members, please plan to join us for our All-Member Meeting on September 30.

Vaccine Requirement of Employees

CALSSA has received several questions from employers about whether they can require their employees to receive a COVID vaccine. The California Department of Fair Employment and Housing released guidance on this matter and the answer is yes with important caveats, such as accommodating those with sincerely-held religious beliefs and not retaliating against those engaged in protected activity, such as seeking reasonable accommodations. If you have additional questions, go here to find the memo (the section on vaccine requirements starts on page 7).

CSLB Restricts the Trade of California’s Solar Contractors; Read Public Comments from CALSSA at CSLB Hearing on July 27

The Contractor State Licensing Board (CSLB) voted 11-3 today to restrict and impede the lawful trade of 80% of California's licensed solar contractors to continue installing solar and energy storage systems. This vote comes despite the board’s 40-year history of extensive testing as well as providing written permission for C-46 solar specialty contractors to install solar and energy storage systems and in the absence of identified incidents involving contractor error. 

Read Public Comments Below from Bernadette Del Chiaro, Executive Director of CALSSA, before the CSLB on Tuesday, July 27:

My name is Bernadette Del Chiaro. I am the executive director of the California Solar & Storage Association. We are California’s largest clean energy trade group representing over 650 businesses who have installed over one million projects making California a world clean energy leader.

The motion on the table will have hugely negative impacts on California’s solar and storage industry, and we are concerned that given the strong public demand for solar and storage, your actions could knock out our most experienced and tested contractors and cause less experienced ones to enter the market, leading to unintended public safety risk.

CALSSA strongly disagrees with the analysis and recommendations of the UC Berkeley Labor Center. Upon initial review, we find their report to be inaccurate, misleading, and biased. The Labor Center offers no evidence to support its unsubstantiated assertion that regulatory action against California’s existing solar and storage contractors is needed to protect public health and safety. Indeed, the report admits what we have been saying for years: there is ZERO evidence that contractors holding a C-46 solar specialty license have created any safety problems, despite the 60,000 storage projects built in the past few years alone.

The Report relies on an erroneous and unsupported assumption that solar contractors hire only certified electricians to build their projects. No analysis is presented to support this false assumption and it’s wrong. And the Report relies on this to support its equally erroneous conclusion that if CSLB changes the law by prohibiting the C-46 license from installing solar and storage there will be minimal fiscal impact and no labor shortages. CALSSA raised this issue in our conversation with the Labor Center and shared our fiscal analysis yet the Report all but ignores these critical facts.   

A C-46 contractor who holds a C-10 license is not required to maintain a crew of electricians to install solar any more than a C-20 contractor who also holds a C-10 is required to use certified electricians to install an HVAC system. Specialty, multi-craft trades hire and train technicians to do their specific job. This is reflected in the CSLB’s testing curriculum. For over 20 years, CSLB has been testing C-46 contractors on energy storage. The C-10 test was only recently modified to include storage. According to the CSLB’s own Occupational Analysis, storage appears over 120 times in the C-46 analysis and fewer than 15 times in the C-10. Energy storage also receives the highest “Critical Task Importance (CTI)” rating compared to a relative low CTI in the C-10 analysis.

The Labor Center has failed to provide CSLB with a complete, objective, or data driven analysis. Critical data and analysis are omitted to support the Labor Center’s well-documented bias.

We have listed only a few of the most obvious deficiencies in the Labor Center report that we received only 11 days ago. We have not yet had an opportunity to review the Report with outside experts. Given the magnitude of its recommendation, we request that the Board afford us basic due process by providing CALSSA 120 days to conduct a thorough review and provide a detailed written rebuttal before the Board takes any action that would change the status quo. Eleven days is simply not enough time to engage on an issue this complex and consequential.  

In closing, we urge you to not undermine the continued growth of solar and energy storage in California by indiscriminately restricting the livelihoods of hundreds of experienced solar and storage contractors this summer, just as the state is facing wildfires and blackouts, to say nothing of the governor’s priority initiatives to address climate change. And all this is occurring against the backdrop of the Covid-19 pandemic that has led to widespread worker shortages. 

CALSSA has demonstrated our eagerness to support the Board’s efforts to promote public health and safety.  Any changes in the law must be rooted in reality and based on fact. We request an opportunity to help the Board do precisely that.

Thank you.

Debunking the “Cost-Shift” Debate

California utilities claim that current solar consumers impose a cost of $2.8 billion on non-solar consumers. They say this adds $200 to every non-solar consumer’s energy bill every year. They call this the “cost-shift” and they have launched a massive public relations campaign, creating a utility-funded front group called Affordable Clean Energy for All, around a call to “fix the cost shift.” Under this frame, they have proposed dramatic policy changes to net metering (NEM), the foundational policy to consumer solar, that would harm existing solar users and all but eliminate the rooftop solar market going forward, killing $4 billion in economic activity, 65,000 jobs, thousands of small businesses, thwarting California’s ability to achieve its clean energy goals on time.[i]

The real cost to consumers that deserves the attention of policy makers are the $4 billion in transmission costs, a 66% increase over 2016 in PG&E territory alone.[ii] In addition, California’s investor-owned utilities charged ratepayers $5 billion in wildfire liability expenses in 2019, costs which are expected to increase.[iii] Together, these $9 annual billion ratepayer costs amount to the real cost policy makers should be concerned with. Distribution system costs are on top of these. 

The California utilities’ cost-shift numbers
are flawed in six main ways 

Flaw #1: Energy not purchased from the utility is a direct cost shift on all other ratepayers.[iv] 

If a farmer, school, or homeowner generates their own electricity from the sun, they are, in the utilities’ mind, shifting costs onto their neighbors. Yet, consumers are not obligated to buy a certain quantity of power from PG&E, or any other utility. Nearly 50% of the energy generated by a rooftop solar system is used onsite, by the solar consumer themselves.[v] This is called self-generation and it is, in essence, no different than energy efficiency and conservation. If everyone in California suddenly consumed half as much electricity on hot summer days when the sun is shining brightest and the grid most stressed, costs for everyone would come down thanks to supply and demand economics. Further, the grid itself could be smaller and require less infrastructure if everyone used half as much energy, saving everyone money. 

• Correcting for this misrepresentation would cut the utility-purported cost shift by more than half, given that more than half of solar power is self-generation, from $200 per year to less than $100 per year. Net metering is solely about spinning the meter backwards for a utility bill credit. It is not about whether customers are obligated to buy a certain amount of energy from the utility. The value of the credit that solar users receive for energy put back on the grid is the core of today’s net metering debate and it should be limited to that. With economy-wide electrification efforts underway, California should look for every opportunity to reduce strain on the grid, including self-generation. This will save everyone money. 

Flaw #2: Infrastructure Costs Are Fixed 

Utilities claim that all their infrastructure costs are fixed and therefore everyone using the grid needs to pay for these costs today and going forward. In truth, some costs are truly fixed and can be expected to be there for the foreseeable future. Solar users currently pay $120 per year just to interconnect to the grid to help cover some of these costs. The utilities oversimplify the equation around costs and benefits by ignoring the fact that the grid is constantly being expanded to accommodate growth and/or changes in demand. If demand were to stop growing or to shrink, especially during peak times of the year, long-term infrastructure costs would shrink. If a solar user buys an electric car and covers that car’s load with rooftop solar panels, there is no cost shift to that person’s neighbor, there are only cost savings. In contrast, if every new electric car draws 100% from the grid, costs will increase for everyone as the grid will have to grow to accommodate all that increased load. There is a profit loss for PG&E and other utilities, however. And that is what the controversy over rooftop solar is all about.  

California utilities profit most when everyone demands a lot of electricity at the same time because this justifies the buildout of more infrastructure. Poles and wires are where PG&E and the other utilities get their guaranteed rate of return. Consumers never benefit when demand outstrips supply, but it is under these conditions that the investor-owned utilities justify massive build outs of infrastructure. Over the past twenty years, California’s investor-owned utilities spent $20 billion on infrastructure and reaped $20 billion in profit. California has invested in energy conservation (e.g., Flex Alerts), energy efficiency, and distributed generation for the very reason that these strategies help lower costs for everyone as well as improve grid reliability. California’s net metering law, passed in 1995, was not a subsidy program but rather a simple mechanism to encourage consumers to install enough rooftop solar to diversify California’s energy resources and create a financially healthier and more affordable grid for everyone. 

• In 2018, the California Independent System Operator canceled $2.6 billion in grid infrastructure projects due to the growth of rooftop solar.[vi] Some infrastructure and administration costs are unavoidable, but not all. Rooftop solar can save all ratepayers in the long run. A recent study found a major expansion in rooftop solar across the country would save Americans $473 billion.

Flaw #3: Rooftop solar is less valuable over time as California decarbonizes  

California utilities purposefully undercount the value of rooftop solar in meeting the state’s ambitious climate change goals. This undercounting would be one thing if the utilities were generating 100% of their energy from carbon-free resources today or had plans to get there by 2030. But the reality is, California has a long way to go to get to 100% zero carbon and every solar rooftop helps. 

In calculating their cost-shift numbers, the utilities count 9 years-worth of benefits of a rooftop solar system that is designed to last 25 years.[vii] This is not only obviously flawed on the face of it but, further, it negates the increasing value of decarbonizing the economy over time as we get closer to 100% clean power. As California gets closer to 100% zero carbon, we will have exhausted the “low-hanging fruit” and it will become more difficult to get to 100%. Solar installed today will generate clean energy for 25 years. By evaluating rooftop solar for nine years rather than 25 years, California utilities are deliberately using lower value years and excluding higher value years. The state-approved value of solar calculator was created to measure lifecycle costs and benefits. The utilities are deliberately misusing it to inflate their cost-shift numbers.

• Correcting for this misrepresentation would cut the utility-purported cost shift in half again, from $100 per non-solar user per year to $50 per year.

Flaw #4: Rooftop solar installed ten years ago provides the same value as rooftop solar installed today.  

In calculating their cost-shift numbers, California utilities capture the 500,000 solar roofs installed prior to 2017, so-called “NEM 1.0 customers” and assign them the same calculated benefits as rooftop solar installed today. In so doing, the utilities are ignoring the important context that existed when early adopters of solar installed their systems. Five, ten and fifteen years ago, when the first half million solar consumers were stepping up and helping usher in today’s clean energy revolution, California was heavily dependent on natural gas power plants and electricity demand peaked at 3pm on hot summer days. Further, contracts for large scale solar farms were far more expensive than they are today. If those half a million consumers had not built 10 gigawatts of rooftop solar (For scale, Diablo Canyon nuclear power plant is 2 gigawatts) over the past 15 years, utilities would have signed more large-scale solar contracts at a higher price to meet clean energy goals. 

• Correcting for this misrepresentation cuts the utility-claimed cost shift in half again, since half of today’s solar systems are five years old or more. Now, we are down to $25 per year of the utility-claimed cost shift for non-solar users, or $2.08 per month, or less. And that’s using the utilities numbers as our starting point. 

Flaw #5: Energy generated from a rooftop solar system in the middle of a city is more expensive than solar generated on solar farms located hundreds of miles from the city   

The utility front group, Affordable Clean Energy for All, claims non-solar users pay $0.25 per kilowatt hour for rooftop solar instead of $0.03 from a solar farm. Comparing wholesale prices against retail credits is a dishonest “apples to oranges” comparison based on false equivalencies. Buying an electron from a solar farm located hundreds of miles from Los Angeles is not the same as crediting a public school for an electron shared within the same neighborhood. Transporting the electron generated out in the desert across hundreds of miles of wires into Los Angeles is inefficient and expensive, both in the building and maintaining of the lines, and in paying for the growing liability of those lines in the form of wildfires ($5 billion per year). The solar system at the school in downtown Los Angeles avoids those costs and provides clean, renewable power right where and when Los Angeles needs it most. California is nowhere near generating 100% of its energy from zero-carbon resources. California needs all clean energy solutions to remain on the table if we are to achieve our climate change goals in time. 

Flaw #6: Rooftop solar provides no additional value than a solar farm in the desert

Utility arguments against rooftop solar ignore unique values such as land conservation due to the ability to incorporate solar into the built environment, grid reliability due to reduced reliance on transmission lines, and the speed of decarbonization since 500 megawatts (size of a power plant) are built on rooftops across California every six months – much faster than can be achieved when building large projects in the desert. Maintaining a robust market for consumer solar will also help speed the adoption of battery storage, which will boost local resiliency. 

• These intrinsic values of rooftop solar are the hardest for utility economists to calculate and therefore often get assigned a “zero” value even though the public, and indeed our economy, values grid reliability, reduced threat of wildfires, and open space highly.  

 The Real Cost Shift 

Utilities have guaranteed profit on construction of transmission lines. They have a financial incentive to build more power lines and perpetuate a system of getting energy from faraway power plants. Transmission and distribution costs have soared since 2016, increasing 66% in PG&E territory alone. Wildfire liability, largely due to PG&E’s failure to properly maintain the poles and wires, is costing ratepayers $5 billion this year alone. The unpaid bills from transmission construction and maintenance stand at $19 billion, 50% of which were self-approved, and will continue to go unchecked unless policy makers rein them in.[viii] They want to continue their runaway spending and drive those receivables higher. These are the reasons California’s electric rates are so high. This is the real cost shift, not the 15-20% of California consumers who have done their part to create a clean energy future for everyone. 

Solar and Communities of Concern

 In addition to the cost-shift argument, California utilities are weaponizing communities of concern by claiming that only wealthy consumers have rooftop solar. They cherry-pick facts that fit the narrative they want to tell to pit ratepayer against ratepayer and community against community, eliminating the growth of rooftop solar and batteries in the process. The fact is, as the price of solar has come down and the availability of financing options have become more available to consumers with low savings or credit scores, the adoption of rooftop solar in low and working-class neighborhoods has steadily risen. According to the Lawrence Berkeley National Labs, 42% of new California solar adopters in 2019 were in low- and working-class neighborhoods, making these communities among the fastest growing. Further, according to the California Public Utilities Commission, at least 150,000 low-income homeowners have solar on their roof, making up 15% of today’s rooftop solar market.[ix] These numbers show significant progress toward equity and inclusion goals and indicate the state is on the right path. California should improve upon net metering to further drive these investments, as opposed to making solar more expensive. Lastly, AB 693 (Eggman) is driving solar investments in multi-family affordable housing. Today, 400 properties with 33,000 units are building rooftop solar systems to directly benefit over 100,000 low-income families. These projects will help close the gap and make California’s rooftop solar market more inclusive and beneficial to everyone. Other policies like enhanced NEM and community solar can go even further.  

Getting to 100%: More Solar and More Storage Are Key

California policy makers need to stop looking back and start looking forward if we are to decarbonize the fifth largest economy in the world within the timelines dictated by climate science. Net metering, as a policy, can and should evolve over time but the key question is how California continues to grow its distributed generation market while ramping up solar-charged batteries to cover evening peak. The investor-owned utility policies would all but eliminate the rooftop solar and energy storage market going forward, save for a few wealthy consumers for whom cost is no object.  

All parties in the current CPUC NEM-3 proceeding have proposed major changes to net metering. Some of them are larger and some are smaller. Some are immediate and some are phased in over time. All of them represent major change. 

• CALSSA has proposed reducing the NEM credits by fifty percent, phased in over eight years, and tied to market growth. 

• The utilities have proposed cutting the NEM credits by 75% and adding a $60-90/month fee, starting immediately. 

• AB 1139 would cut the NEM credits by 88% and add a fee of $80 per month. These levels of change are hostile and unnecessary.

As California looks forward to how we are going to decarbonize our economy, we must focus on energy storage – the true bridge to a renewable future. California utilities are intent on eliminating the market for consumer solar before storage can get to scale and enable communities to manage their power locally. As energy needs increase from electric vehicles and electric buildings we should be striving to meet load growth locally. The California Energy Commission estimates California needs three times more rooftop solar by 2045 and 48 times more energy storage. To get to these goals, California must at least maintain its rooftop solar market and seek to pair 100% of solar systems with batteries by 2030. Making drastic changes to net metering will eliminate this important component of California’s clean energy path forward. 

______________________

[i] This effort reveals itself at the CPUC in the investor-owned utility proposals for NEM-3 as well as in AB 1139, a bill introduced by Lorena Gonzalez in the 2021 legislative session. The utilities publicly claimed to not have a position on AB 1139 but it was sponsored by the Coalition of Utility Employees and conversations with legislative offices reveal the utilities themselves were directly lobbying it behind the scenes. The utilities’ front group’s website posted a press release on April 23, 2021 praising AB 1139. 

[ii] See page 36 of CPUC’s recent En Banc white paper on the affordability of electric rates.  

[iii] En Banc, page 60.

[iv] Utility response to CALSSA Data Request #1 in CPUC Rulemaking 20-08-020. Note: CalAdvocates is cut and pasting PG&E’s figures into their own spreadsheet.

[v] CALSSA analysis shows 46% of the energy output of a typical 6kW residential system is consumed on-site, the rest is exported for bill credit to cover the customer’s load the remainder of the year. 

[vi] CAISO, 2018 http://www.caiso.com/Documents/BoardApproves2017-18TransmissionPlan_CRRRuleChanges.html

[vii] See PG&E and CalAdvocates cost shift spreadsheets referenced in the above note. On all three tabs, “Cost-Shift 1.0”, “Cost-Shift 2.0” and “Cost-Shift 3.0”, PG&E and CalAdvocates, by extension, only calculate through 2030 instead of showing benefits for the systems expected to last 25 years, at a minimum. 

[viii] See CPUC En Banc, page 39

[ix] See CPUC En Banc, page 28. 

AB 1139, the Utility Profit-Grab Bill Defeated

Broad Grassroots Coalition Rallied to Keep California a Pro-Solar State Against “All Odds”

AB 1139, “the Utility Profit Grab” bill, officially died today when the author, Lorena Gonzalez (D-San Diego), failed to garner the votes needed for passage moving it to the “inactive file.” Our lead lobbyist, Kim Stone, led a robust and effective effort inside the capitol to defeat this monster of a bill. And our grassroots coalition, including groups like Solar Rights Alliance, Environment California, Indivisible, and many others, along with CALSSA’s field work coordinated among over 600 member companies, was the magic mix that overcame the special interest power of the utilities in the state Capitol.

Thankfully, the legislature and the public saw through the smokescreen of negativity levied on solar energy by utilities such as PG&E. AB 1139 was a well-funded and power-backed effort by the big investor-owned utilities to change the rules in their favor so they can profit off the energy created by solar consumers and eliminate a growing competitor in the energy market. However, they ultimately failed to accomplish their goal via the legislature. The fight continues at the CPUC, where the power of the utilities is high and the voice of the public less pronounced.

AB 1139 would have moved California backward in its efforts to transition to clean energy. It would have broken a promise to hundreds of thousands of solar consumers by adding new fees and reducing the credit they receive for excess energy sent back to the grid. It would have taken California from leading the nation in expanding solar in working- and middle-class neighborhoods to a solar unfriendly state where clean energy is accessible only to the rich.

The deep popularity of rooftop solar presented itself in the form of a massive outpouring of voter opposition to AB 1139. Many legislators’ offices were jammed with phone calls from constituents urging their assembly member to vote against the bill.

Thousands of solar consumers, workers, small business leaders, and environmentalists made their voices heard in the California legislature. Californians overwhelmingly want rooftop solar to continue to grow and, along with it, the benefits of good jobs and clean, reliable energy for communities all over the state.

While AB 1139 is dead for the year, the fight over net metering is far from over. The California Public Utilities Commission is in the process of considering adjustments to net metering in the coming months. Utilities are extremely active in this forum as well, asking for many of the same changes to net metering contemplated in AB 1139. Members of the public can sign a petition to Governor Newsom and the CPUC at www.SaveCaliforniaSolar.org. So far, over 30,000 people have joined the campaign effort.

AB 1139 was introduced by Lorena Gonzalez, chair of the influential appropriations committee. It was sponsored by the Coalition of Utility Employees which is closely aligned with PG&E and supported by many powerful legislators in the state Assembly. It sailed through the Energy Committee and the Appropriations Committee, which Gonzalez chairs, but it came up far short of its required 41 votes on the Assembly Floor on June 2, receiving only 27 aye votes. The bill was up for reconsideration today but was moved to the inactive file, tabling it until next year, and essentially killing it. The CPUC is expected to act on net metering reforms before or around the same time the legislature reconvenes in 2022.

This was a hard bill to defeat because of the power brokers lined up behind it. But California is headed toward clean energy and, if the voters are given a voice, it is going to be very hard to knock us off that path.

A million thanks to all our members who took action to help defeat this bill. The phone calls and financial donations, the videos and social media posts, and the historic solar work truck motorcade around the State Capitol all helped defeat AB 1139. This victory is shared by many.

CALSSA Statement on AB 1139’s Failure to Pass the California Assembly

“California is and has always been a solar state. AB 1139 was out of step with the deep and wide popularity of rooftop solar in the golden state and worthy of the resounding rejection it got today.”

Sacramento, CA — The California Solar and Storage Association (CALSSA) released the following statement on AB 1139’s failure* to earn a majority support in the California Assembly today. 

Solar enthusiasts are pleased the state’s most representative legislative body rejected AB 1139 – Assembly member Lorena Gonzalez's utility profit grab bill. The legislature saw through the smokescreen of negativity levied on solar energy as simply an effort by the big investor-owned utilities to change the rules in their favor so they can profit off the energy created by solar consumers and eliminate a growing competitor in the energy market. 

AB 1139 would have moved California backward in its efforts to move to clean energy. It would have broken a promise to hundreds of thousands of solar consumers by adding new fees and reducing the credit they receive for excess energy sent back to the grid. It would have taken California from leading the nation in expanding solar in working- and middle-class neighborhoods to a solar unfriendly state where clean energy is accessible only to the rich. California is and has always been a solar state. AB 1139 was out of step with the deep popularity of rooftop solar in the golden state and worthy of the resounding rejection it received today. 

Now the thousands of solar consumers, workers, small business leaders, and environmentalists who made their voices heard in the California legislature, will turn their grassroots efforts to making sure rooftop solar continues to grow and distribute the benefit of job-creating, clean, affordable energy to communities all over the state as the California Public Utilities Commission considers adjustments to net metering in the coming months. People can sign a petition to Governor Newsom and the CPUC at www.SaveCaliforniaSolar.org. So far, 30,000 people have joined the campaign effort.

*Note: while AB 1139 failed to earn majority support in the California Assembly today, it is still possible for the legislation to come up for reconsideration from now through June 4th. 

AB 1139 – The PG&E, SoCal Edison, SDG&E Profit Grab Bill – Continues to Perpetuate Inequities and Harm Low-Income and Working-Class Families, Small Businesses, Schools

Joint CALSSA & SEIA Floor Alert Opposing Amendments

AB 1139 (Gonzalez) – OPPOSE MAY 28 AMENDMENTS!

AB 1139 (Gonzalez), even with the proposed floor amendments, will:

• Extend the eligibility period of the current net energy metering policy to wealthier homeowners and large businesses with the means to purchase their solar arrays outright, while lowering that period for the very groups that Asm. Gonzalez purports to help:

  • lower-income homeowners (both current homeowners with solar and families aspiring to purchase their first home)

  • under-resourced schools, and small businesses who lack the resources to purchase the solar panels outright and must lease them or enter a power purchase agreement

  • Hurts California’s aspiring new homeowners and new solar home market that rely heavily on financing of solar systems

  • Over 400,000 existing solar users who don’t own their solar system would still be harmed by the bill! Financing options are the biggest driver in solar adoption in low- and working-class neighborhoods.

  • “Downward trend in solar-adopter incomes is associated primarily with third-party owned (TPO) systems, as median adopter incomes for host-owned systems have remained relatively flat over time. Across all U.S. solar adopters in 2019, 21% were <80% of AMI and 42% were <120%. LMI shares of solar adopters are trending up over time, predominantly driven by third party ownership.” – LBNL

• Kill California’s rooftop solar and energy storage market by subjecting the future net metering tariff to utility profit grab language harming over 2000 small businesses and 65,000 jobs

• Remove the requirement to “ensure that renewable distributed generation continues to grow sustainably” clearly revealing the intentions of this bill.

• Require all solar projects built with private money on private property to be considered public works, an unprecedented expansion of existing law.

• California Public Utilities Commission (CPUC) is currently engaged in a proceeding to modify the state's net metering program. AB 1139 is not needed!

VOTE NO AB 1139!!!

CALSSA Statement on Proposed Amendments to AB 1139 (Gonzalez)

Even with the proposed amendments, AB 1139 – Assemblymember Lorena Gonzalez's utility profit grab bill –does the bidding of big investor-owned utilities by changing the rules in their favor so they can profit off the energy created by solar consumers and eliminate a growing competitor in the energy market. AB 1139 still adds new fees on all rooftop solar consumers and severely reduces the credit they receive for excess energy sent back to the grid – beyond what even the utilities have proposed at the CPUC. AB 1139 still threatens to break a promise to existing solar users after the state encouraged their rooftop solar investment – especially targeting moderate- and low-income consumers. Rooftop solar remains extremely popular with voters. This unprecedented attack would take California from leading the nation in expanding solar in working- and middle-class neighborhoods to a solar unfriendly state where clean energy is accessible only to the rich. AB 1139 will increase energy bills for hundreds of thousands of consumers, hurt local small businesses, and kill jobs at a time when California's economy needs a boost.

We will be sharing more details on the amendments shortly and ways you can take action to stop this Bill. Stay tuned.

AB 1139 Update: Bill Heads to Floor Vote – Take Action!

AB 1139, the Utility Profit Grab bill to kill rooftop solar, heads to an Assembly Floor vote expected this coming Thursday. If you haven’t called your local assembly member already, please do that right now. Click here to take action.

Please share this action with every colleague and client you know. We need to flood the assembly with thousands of phone calls. Phone calls work! So, just do it now. It takes all of 2-3 minutes.

Want to do more?

Click here for a list of things you can do this week to help us fight against the utility attack on rooftop solar.

Many thanks to all the businesses who participating in last week’s No on AB 1139 rally at the State Capitol.

Our goal was to shine a bright spotlight on this bill, educate the legislature about how controversial it is, and blow the whistle on this sneaky utility profit grab. It worked. We attracted four TV cameras and made the nightly news while raising awareness inside the Capitol, still under lockdown from Covid-19. Check out all the news clips here. The SF Chronicle also wrote a story on the bill, click here.

Solar Rights Alliance and other coalition allies also rallied on the north steps of the Capitol on Wednesday with speakers from environmental justice organizations, public schools, local elected officials, and renters pointing out how bad AB 1139 will be for consumers, schools, affordable housing, and local governments. Watch the recorded press conference here.

Mark Smith of member company Solar Forward, also put together this video on the May 19 event. Watch the video and then call your Assemblymember!