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California’s Net Metering Debate to Really Heat Up Again by Summer

With spring and summer around the corner, it’s going to get hotter in California. It’s not about the weather, which will play into the debate. It’s about a request to revisit the state’s net-metering rule that sets the payments for those who generate their own electricity and who sell it back to the utilities.

San Diego Gas and Electric and Southern California Edison asked the California Public Utilities Commission on Monday to rehear the case it decided in late January. At that time, the commission ruled to leave the current net metering rules in place that pay businesses and homeowners who have rooftop solar panels the retail rate for electricity — the same thing for which the utilities sell it. New customers, though, will have to pay a one-time connection feel of up to $150.

But the two utilities filing petitions want some modifications to that ruling and are arguing that it is those with modest incomes who will get hurt, or the ones who cannot afford to install rooftop solar panels. Previously, utilities had wanted to compensate homeowners less than the retail rate — more like the wholesale price for power — because it cost a lot of money to maintain the system. If fewer people pay into the grid, they argue, the burden falls on others.

The utilities are joined by a ratepayer group called The Utility Reform Network that wants a distributed energy tariff placed on those who access the utilities’ networks but who may not pay for their fair share; after all, those rooftop solar customers still use their wires to send back their surplus electricity and they have the utilities must still transmit power to their homes and businesses when the sun is not shining.

“What we’re really looking at is who’s really paying this additional money to maintain the grid, to build out the two-way infrastructure needed to support rooftop solar,” says Amber Albrecht, with San Diego Gas and Electric, in an interview with the San Diego Union-Tribune. Utilities have also argued that because solar energy is an intermittent resource that can’t be dispatched on demand, it is worth less than “traditional” sources of power.

The Union-Tribune story says that utilities estimate that the remaining “grid-connected” customers will pay $300 more by 2025. The public utility commission has four months to respond to this request for a rehearing, although it has said that the decision it came in January by a vote of 3-2 had been a transitional vote, not final.

The present net metering rules in California were set a dozen years ago, with the intent that they would expire when solar penetration reached 5 percent at any of three investor-owned utilities: SoCalEd, PG&E Corp. and San Diego Gas and Electric, which is nearing the threshold.

California’s current regulatory regime was established in large part to boost solar sales. Now, though, the utilities are arguing that the price of solar power has fallen and that such assistance is no longer needed — help coming at the their expense as well as those customers who remain connected to the grid. They are also saying that because solar energy is an intermittent resource that can’t be dispatched on demand, it is worth less “traditional” sources of power.

By contrast, the solar community says that its fuel is carbon-free and is well-positioned to help the state reach its climate mitigation goals. Therefore, it’s a “premium” resource that is actually worth more than traditional power. At the same time, rooftop solar generators are putting less strain on the grid, helping utilities to defray the cost of upkeep.

Under the current net metering rules — investment tax credit included — most homeowners are able to recoup the cost of their solar purchase in about 5-6 years, says Michael Powers, founding partner of Stellar Solar in San Diego. But with some of the proposals now under discussion, he told Environmental Leader that that such a pay back could be 12-14 years — a deal breaker.

“We don’t believe the PUC commissioners will agree to re-hear the case,” Powers says. “The utilities are just trying to muddy the waters enough to create uncertainty in the markets. That is precisely what the PUC is trying to avoid, so we don’t expect they will take kindly to the strategy.”

One thought on “California’s Net Metering Debate to Really Heat Up Again by Summer

  1. It’s strange that they request a reduction in grid electricity usage because of too much demand, then suggest prices will increase because too many are going off the grid. It seems like developers of new construction may go the route of new developments being built with all solar power and a closed grid for only those in the community – along with a large capacitor or battery to store the electricity for evening hours or higher-usage hours.

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