What's happening to net metering in California?

California has historically been the best market for solar in the US, and the success of the solar industry can largely be traced back to the success of solar in California. In fact, out of the more than 2.5 million residential solar installations in the US, more than 1.2 million are in California alone!

However, the future of solar in California –and residential solar in particular–hangs in the balance. In a current review of the future of net metering in the state, a series of proposals before the California Public Utilities Commission (CPUC) recommend significantly reducing the value of residential net metering credits. For a sense of the types of proposals submitted, check out this joint proposal from the major utilities in the state, which would reduce residential net metering credits to 23 percent of their value today and impose a monthly fee on solar owners of nearly $80 per month, making new residential solar all but impossible in the state.

To better understand the state of solar in CA, what's happened in previous net metering proceedings, what's at stake in this round of policy battles, what it means for the solar industry outside of California, and what you can do to help support solar in California and beyond, we sat down with Carter Lavin from the California Solar and Storage Association (CALSSA). Below is our conversation, edited for brevity.

EnergySage: Where are we now, and how have previous net metering policy battles influenced what solar shoppers currently receive for solar?

CALSSA: For the three main investor-owned utilities (IOUs) in California, net-metered solar is credited at basically retail rate minus a penny or two for non-bypassable charges (NBCs). (Editor's note: NBCs are per-kilowatt-hour charges built into utility electric rates that fund energy efficiency, low-income customer assistance, and other related programs.)

In 2016, there were a lot of different net metering policy fights throughout the country–Nevada, Hawai'i, and here in California. Part of how that policy fight shook out is that after lobbying from CALSSA, the CPUC said, "We'll make modest changes now and reevaluate in a few years."

Those modest changes were a "haircut" for solar credits–the 2 cents per kilowatt-hour for NBCs that are deducted from your net metering compensation credits–and, given that "no changes'' wasn't an option on the table, this was a win for CALSSA and the solar industry and came in no small part as a result of CALSSA mobilizing the industry.

EnergySage: What's at the root of these policy battles over net metering?

CALSSA: The main question at hand boils down to this: if you go solar and I can't, did you put money in my pocket, or did I put it in yours? In other words, are solar customers subsidizing everyone else or vice versa, and if so, by how much? There are well over a million homes with solar in California–and another 100,000 added every year!–so it's an important question to answer.

EnergySage: What types of policies were on the table last time?

CALSSA: In 2016, the utilities had proposed similar things as was what's on the table–basically, the cratering net metering. What was on the table was reducing net metering credits to wholesale rates (i.e., 5 cents per kilowatt-hour as opposed to retail rates), lots of monthly fees that are proposed again this time around (grid interconnection, etc.), and just generally things that utilities are trying to do to make solar more expensive. So, again, coming away from that net metering fight with just a 2-cent haircut on the value of solar was very much a win because we were only able to play defense.

EnergySage: And what's being proposed this year?

CALSSA: To try to answer the question from above, the utility commission hired an engineering/consulting firm to do the math and answer, what's the value of solar? What are all of the costs and benefits? The utilities have just come out with a new proposal – $11 per kilowatt (kW) per month fee AND a $24 per month fee for everyone who goes solar. There are a lot of other parts and changes included in these proposals-- but just those two fees alone means small systems would never pay for themselves.

That alone would mean that pretty much any solar install 5 kW or smaller is dead, which is important because half of all solar installs in the state are 5 kW and below. Some proposals also consider demand charges for residential solar.

Also on the table is a reduction in the value of net metering credits to 23 percent of their value today--not a 23 percent reduction, a 77 percent reduction. Different proposals call for different reductions in net metering credits, but at the end of the day, they are calling for assessing hundreds of dollars in extra fees for your solar project per year while also reducing the value of what you get back from the grid for exported solar by 60 percent or more.

All in all, these policies–if enacted–would result in the evaporation of 80 percent of the solar market in California.

EnergySage: How likely are these policies to be enacted?

CALSSA: If the vote was today, the policies would be enacted as is: there are complicated politics that don't work in the favor of rooftop solar. Thankfully, the vote is in November, so we have some time to try to turn the tide.

EnergySage: So, what can we do to support the solar industry in California? As homeowners, business owners, solar installers, manufacturers, solar supporters, etc.

CALSSA: To turn the tide, we need to show the world & CA that rooftop solar is a job maker, and we need to show that there are more people who work in rooftop solar than for the utilities: there are 1,000 solar companies in California that support 75,000 jobs. Now, in the middle of a pandemic and an economic downturn, it is very much not the time to cut jobs. So what we need to do is demonstrate who these people are – you, the person who's reading the EnergySage blog, you exist!

In California, Steps 1, 2, and 3 are: if you're an installer become a member of CALSSA! CALSSA already represents about 80 percent of the market, but if you're not a member, the government doesn't know you're there from a political perspective. And, more than that, we're doing all of the specialized work that's required to win the battle: reports, expert testimony, coordinating the campaign, and more.

If you're a homeowner, there's the Solar Rights Alliance. Join them and sign the petition they've put together: that's something anybody in California can do and is a great way to show the governor the strength of the industry. So even if you don't live in If you have CA friends/network, let them know–tell them to sign the petition!

Otherwise, the best thing you can do is raise awareness about this story: it's national news, even international news! Get the word out about what's happening to solar in California.

EnergySage: Why should people outside of California care about what's happening in California?

CALSSA: If we lose net metering in California, it is going to be nearly impossible to save net metering anywhere else in the US. You can bet that if net metering loses here, utilities elsewhere in the country will take a look at decreasing net metering credits too.

So if you live outside of California, look out for proceedings about net metering at your own utility commission that might impact the financials of solar in your state. But, most importantly, go solar now! When it pencils out for you financially, go solar. Technology is getting better all the time, but the politics are not.

EnergySage: Any final thoughts?

CALSSA: We have the ability to win, but only if we mobilize and we get everyone involved.

The stakes are extremely high–it would be hard for the stakes to be higher than they are in California. This is a winnable fight, but when you read this article, you need to say, "That's big! I'm going to sign the petition, get five friends to sign the petition, and get in touch with CALSSA to say, what can I do?"