(CN) — Their case against the California Public Utilities Commission's new solar panel rules might have been rejected by an appeals court in San Francisco, but rooftop solar power advocates say they’re not done fighting to expand renewable energy in the state.
On Wednesday, a panel of three First Appellate District judges rejected a petition brought by The Center for Biological Diversity, the Protect Our Communities Foundation and the Environmental Working Group challenging the California Public Utilities Commission’s new rules on “net energy metering,” a tariff created for people with rooftop solar panels which allows them to give energy they don't use to the grid. For that, customers are given credit on their electrical bills.
In late 2022, the utilities commission updated the tariff that bolsters incentives provided by the federal government from the Inflation Reduction Act for solar and battery storage. The agency also added more electricity bill credits to people who put in solar and solar battery storage in the next few years, including low-income people and members of Native American tribes. Most controversially, though, the commission adopted a rate change for homeowners who install rooftop solar panels for the first time.
The commission touts the changes as ways to encourage people to use electricity when it’s most beneficial for grid reliability, put in battery storage and to shift load demand from evening hours to overnight or midday hours.
But the environmentalists groups say the new tariffs will slash what rooftop solar owners get from sharing their excess energy by 75% to 80%, making solar less financially beneficial.
The groups say the commission ruined a successful program that helped provide 7% of the state’s total electricity supply in 2019, and that the new tariffs will dramatically reduce the growth of rooftop solar and other distributed, renewable generation of energy.
According to the groups, this means the commission violated a number of legal requirements the Legislature put down for the net energy metering tariff successor, including a requirement to produce policies that continually grow rooftop solar and distributed generation.
Associate Justice Victor Rodriquez, a Newsom appointee, shot down that argument.
The tariff serves the “sometimes inconsistent objectives” of the commission’s policies as set by the state Legislature, Rodriquez wrote in his order.
As for their objective to promote the continued growth of renewable power generation while also balancing costs and benefits to all customers, Rodriquez wrote that continued growth of renewable energy “does not require continued growth at the same pace. That the rate of adoption of renewable systems will slow under the successor tariff does not mean adoption will cease. Rather, it will simply grow more slowly than it would have under a NEM tariff.”
“Just because the court found the NEM 3 decision legal doesn’t make it right. I guess that’s the topline,” said David Rosenfeld, the executive director of the Solar Rights Alliance, a nonprofit association of California solar users.
Rosenfeld said the commission is not only out of line with public sentiment, but with the state’s own clean energy and climate change mitigation goals, and that the solar panel industry is already taking a nose dive because of this rule.
“Literally as we speak the solar panel industry is collapsing,” he said.
In November the California Solar & Storage Association estimated that by the end of 2023, 17,000 solar jobs in the solar industry, or 22% of the all jobs in the industry, will be lost because of the commission's new rules.
But others agree with the commission’s new rules.
“It is an important win for rationalizing rooftop solar policy, though California net energy metering policy still leaves massive and growing cost shifts from anyone who put in solar before 4/15/23 onto other ratepayers. And substantial cost shifts even from people who have put in solar since then,” wrote Severin Borenstein, a professor at UC Berkeley, and the faculty director of the Energy Institute at the Haas School of Business, in an email.
When asked for further expand on his position, Borenstein sent a link to an article he wrote late last year where he wrote about that the new commission rules recognize that people with solar panels benefited from the old rules, and were compensated for it, in excess of what energy they fed back into the grid, which caused a large cost shift onto people without solar panels, who are disproportionately poorer than people with solar panels.
“Yes, some lucky low-income households benefit from targeted solar incentives, but the vast majority won’t have solar for a decade, if ever. So their rates will pay for all of the solar subsidies, a kind of solar rooftop Hunger Games,” he wrote.
However, environmentalists say that to save solar and renewable energy in California, the Legislature is going to have to fix the damage the commission has done, especially considering another controversial plan to partly base how much Californians pay for electricity on household income.
“It’s very unfortunate that California is doing it because the state has such a commitment to clean energy,” said Ahmad Faruqui, an energy economist. “It’s contrary to what many of us think California should do.”
Faruqui put up solar panels on his home in the East Bay in 2019. If these new tariffs were in place back then, he said he wouldn’t have done it.
“I think it’s up to the CPUC to reconsider what they’ve done,” he said.
“The court’s disappointing decision underscores the need for Gov. Newsom to step in and fix this massive threat to California’s climate progress,” wrote Roger Lin, a senior attorney at the Center for Biological Diversity, in an email. “It’s increasingly clear that the commission’s rollbacks will devastate solar growth in working class families, and our governor can’t let that happen. If the courts won’t protect our rights to rooftop solar, Newsom must act to solidify his climate leadership not only in California but across the country.”
The Center for Biological Diversity is “considering all options,” Lin added, including appealing the court’s decision to the Supreme Court of California.
“It’s one of the options on the table,” he wrote.
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