Three environmental groups petitioned the California Court of Appeals last month to review the state’s new rooftop solar policy. The policy dramatically decreases the credit new solar users receive for sharing their surplus solar energy with the electricity grid. It took effect on April 15. The lawsuit also names three investor-owned utility companies in California: Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas and Electric Company.
The Center for Biological Diversity, The Protect Our Communities Foundation, and the Environmental Working Group filed the petition after California’s Public Utilities Commission President Alice Reynolds did not respond to a request to delay the effective date until regulators reserved an appeal the groups filed in January. The cuts make “solar less affordable” for people, businesses, and organizations, the request to delay pointed out.
“California is ground zero for the climate emergency, and it’s outrageous that the commission is slow-walking our renewable energy transition when we need to be racing toward it,” said Roger Lin, an attorney at the Center for Biological Diversity. “I’m hopeful the court will force regulators to implement a new policy in the public interest instead of one that pads fossil fuel utility profits.”
Devastating Rooftop Solar Adoption
The new rooftop solar policy “will devastate solar adoption rates, especially for working-class Californians,” according to the petition. The policy ignores solar energy’s benefits, including “reduced greenhouse gas emissions, resilience to extreme weather and power outages, and avoided land use impacts by decreasing the need for utility transmission infrastructure which also keeps electricity bills down.”
Under California law, the new policy must ensure that the rooftop solar market continues growing. However, the new policy makes expanding rooftop solar more difficult. The petition claims that for-profit utilities want to reduce rooftop solar programs because distributing solar energy resources threatens their bottom line.
“The commission’s new rooftop solar policy enables the utilities’ self-interested attack on rooftop solar,” said Bill Powers, an energy expert with The Protect Our Communities Foundation, in a statement. “The real problem is the heedless pursuit of maximum profit by the utilities at the expense of reasonable rates and commonsense climate action.”
NEM3 (net energy metering) is the name for the state’s new rooftop solar rules, the third version of the rules. The Commission adopted the rules in late 2022 and went into effect in mid-April 2023. Solar users who adopted rooftop solar before NEW3 are called NEM1 or NEM2. NEM3 solar users now receive 75 to 80 percent less from the utility for their surplus solar energy shared with the grid.
California Needs Solar Energy Expansion
Rooftop solar “is a key tool in the fight against climate change,” a 2021 report stated. California is the top solar state with over 39,000 MW installed. The number two state, Texas, has 17,000 MW installed. Expanding solar, including rooftop, helps the state “meet the solar crisis, and it can do so while contributing to a resilient, ecologically vibrant future for California,” according to the report.
For California to achieve 60 percent renewable electricity by 2030 and 100 percent by 2045, the state needs rooftop solar. The state leads rooftop solar, with 38 percent of the nation’s small-scale solar photovoltaic (PV) capacity at the end of 2020. California accounts for only seven percent of the nation’s electricity consumption.
Looking at similar policies in other states, it’s clear that the new rooftop solar policy will decrease solar expansion. Arizona’s Salt River Project adopted new rooftop solar policies that almost doubled the payback time of solar projects. Researchers estimated that the policy caused solar adoption to decline by 50 and 95 percent. Hawaii ended net metering in 2015, and from 2015 to 2018, the state installed around half as much residential rooftop solar.