$100 Site Donor 2021
- Apr 28, 2008
- Ontario, Canada
California pulls the plug on rooftop solar
The Public Utilities Commission approved Net Energy Metering 3.0, slashing payments for sending rooftop solar production to the grid. New rooftop solar projects are now considered uneconomical without an attached battery.
As previous discussed:
California slashes residential solar feed-in rates
https://www.sfchronicle.com/bayarea/article/California-regulators-unveil-new-rooftop-solar-17576253.php The revised rules would: Remove a proposed $8 monthly fixed charge, a so-called solar tax, on new residential systems. Reduce utilities’ payments to homeowners for excess power...
The proposed revisions to NEM 3.0 have now been made:
The California Public Utilities Commission (CPUC) unanimously voted to approve Net Energy Metering 3.0 (NEM), slashing payments for excess solar production sent to the grid by 75%.
CPUC voted cut the average export rate in California from $0.30 per kWh to $0.08 per kWh, making the cuts effective on April 15, 2023. Customers who have new systems installed and approved for grid interconnection before the effective date in April will be grandfathered in to NEM 2.0 rates.
During the vote, the Commission said the balancing of costs and benefits continue to be “quite generous” under the decision.
Currently, average net metering rates range from $0.23 per kWh to $0.35 per kWh, and the new proposed decision cuts those rates to an average of $0.05 per kWh to $0.08 per kWh. This is set to be the largest cut of export rates in U.S. history, in a market that represents roughly 50% of the nation’s residential solar market.
The reason for this revision we've discussed previously, that is, ratepayers without solar were subsidizing those that have it:
Payments were cut as a result of a reported cost shift where non-solar owners cross-subsidize solar owners for maintaining the grid. The utility-backed concept suggests poorer Californians are paying higher utility rates to pay for lost profits that utilities endure in order to pay solar owner for delivering clean energy to the grid.
The idea with this change is to push people toward also installing storage. This is to aide in reducing the duck curve effect we've also discussed:
As exported power loses its value, Californians now have their hand forced to adopt batteries with their solar installations if they want a reasonable return on investment. Return on investment periods are estimated to move from an average of about 4.5 years to 6.5 years to 14.5 years, said Centrica Business Solutions.
“We believe this would represent a potential 70-85% drop in economic value for solar-only systems, which would suggest California would effectively become a 100% solar and storage end market, which ultimately makes solar much less accessible and affordable,” wrote Phil Shen, managing director, ROTH Capital Partners.
@JeffKeryk and @UncleDave you are lucky to have gotten in when you did!