Ensuring Fairness for Rooftop Solar In California

For generations, California was a beacon of light attracting families, workers, farmers, immigrants, and innovators; a place all could prosper.  But with our high cost of living, the Golden State is at risk of becoming a place only the one percent can enjoy.

While gasoline, food, cars and trucks and other inflationary costs may be a global concern due to factors like the pandemic and the war in Ukraine, some of the economic burdens being felt by the working classes are self-inflicted by California’s government. This is why the California Public Utilities Commission (CPUC), a little-known regulatory body, is proposing to reform a program called “net-metering” or NEM.  A proposed decision that is supported by dozens of equity minded lawmakers in Sacramento but has been stalled by the Governor’s newly appointed CPUC.

The way NEM currently works, is that when a Californian puts rooftop solar panels on their home, the law mandates that the local utilities pay them a retail price for the excess power they produce and put back onto the electric grid.

Of course, NEM was designed to be a generous benefit to homeowners to offset the cost of the installation of the costly solar panels. But NEM is also creating a problem that hurts low income Californians.

Because NEM reduces power bills for people with rooftop solar, it is also reducing the fees – that are commensurate with power electricity usage – for maintaining the electrical grid. Which means those costs for grid maintenance are being passed onto families that don’t have rooftop solar.

Understand, that the beneficiaries of rooftop solar tend to be wealthier individuals. This is because you must both own a home – renters cannot install solar panels – and afford the price of the solar panels, which can cost upwards of $20,000 per home.

In response to these concerns, the California Public Utilities Commission recently issued a report about the importance of reforming the NEM program. The CPUC found: “Ratepayers without NEM systems, who are disproportionately low-income, pay significantly higher electricity rates due to NEM. The Public Advocates Office at the CPUC estimates that low-income households without NEM systems pay $67 to $128 more per year…”

As more Californians continue to sign up for NEM, those costs are going to increase. It is also absolutely critical that everyone pays their fair share of these maintenance fees for the power grid, to ensure that we reduce the risks of wildfires and ensure a more energy efficient electrical infrastructure.

Keep in mind, the energy produced and put onto the grid by NEM is costly. According to the CPUC study: “All ratepayers pay as much as 10 times more for exported NEM energy than for other sources of renewable energy…”

Thankfully, there is a better way to encourage the use of renewable energy sources in California, without placing a burden on working class families. First, the CPUC can approve the proposed NEM reform decision and create a $600 million equity fund.  Second, we can expand existing low-income programs to include solar-like weatherization. Third, we can continue to incentivize electric utilities to invest in large scale wind and solar farms. Fourth, we can reward low income and working-class customers to purchase batteries to store excess power that they can use when they need it.

Unfortunately, the CPUC proposed decision has not been set for hearing. We need to make sure the Governor and the State finally address equity in energy. We need to ensure that low income Californians are not subsidizing their wealthier neighbors for maintaining the power grid. Fixing this economic injustice will help make our state more affordable for everyone.