California Proposal Will Decimate Rooftop Solar

Sacramento, CA — Yesterday, the California Public Utilities Commission (CPUC) issued a proposed decision that will decimate the cost effectiveness of rooftop solar, and slow our progress on critical climate goals. 

The proposed decision will: 

• Add a steep new monthly Grid Participation Charge on most rooftop solar customers equivalent to $8/kW (meaning roughly $48-56/month for average-sized solar systems); 

• Slash compensation for exported energy bill credits by 64 to 88 percent immediately for new customers, and after 15 years for existing customers (rather than the current 20 year term) from the date their rooftop system came online; 

• Provide a minimal Market Transition Credit that varies by utility and customer segment to new rooftop solar adopters that declines for each year. For a PG&E residential customer, the credit would be $1.62/kW and would offset less than a quarter of the new $8/kW Grid Participation Charge; and

• Exempt low-income customers from the Grid Participation Charge and offer a higher Market Transition Credit, but pay them the same low compensation for their excess energy.

Collectively, these changes will devastate California’s rooftop solar market, which is essential for meeting our climate goals. 

Rooftop solar provides multiple benefits to all ratepayers, including avoiding demand for more expensive transmission infrastructure, improving energy resiliency amid our increasingly extreme weather, limiting the disruption of undeveloped lands for new energy infrastructure, and decreasing demand for polluting fossil fuels. Rooftop solar can also serve as the gateway for households to electrify their gas-powered vehicles and gas-fired appliances, facilitating deeper reductions in climate and air pollution.   

“California needs sustained growth of rooftop solar and home battery storage over the next two decades to meet our climate goals,” says Sierra Club Senior Attorney Katherine Ramsey. “Other states that slashed their rooftop solar programs, like California appears ready to do, have seen new installations decrease and thousands of jobs rapidly disappear. We can’t afford to make that same mistake.”

“Sierra Club’s proposal encourages existing customers to consume more of their own rooftop solar generation, and provides a longer, smoother decrease in compensation for new customers as rooftop solar becomes increasingly affordable on its own,” says Sierra Club Senior Associate Director Monica Embrey. “We proposed decreasing compensation only after each gigawatt of new rooftop solar is deployed. This proposed decision creates a cliff in compensation for new rooftop solar customers, and is clearly written to the benefit of the utilities, who want to maintain profits and control by building their own large-scale power plants.” 

Written comments on this proposed decision are due to the CPUC by January 3rd, reply comments are due January 10th, and the final written order is expected on or after January 27, 2022.

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