SAN FRANCISCO – California regulators today voted to quash the state’s wildly successful rooftop solar program, which will hobble solar’s growth by putting it financially out of reach for millions of working families and eliminate the only source of competition facing the state’s investor-owned utilities.
The move will also hurt the state’s and Gov. Gavin Newsom’s standing as a leader in fighting the climate crisis.
The California Public Utilities Commission, or CPUC, NEM 3.0 plan will slash the incentive credits new solar customers get for the surplus energy they generate and sell back to the grid. The credits are a critical component of the solar “net-metering” program that allows budget-conscious families to keep their monthly electric bills low.
Pacific Gas & Electric and California’s two other monopoly utilities see solar as their source of competition, and the plan will help them protect their profits by curbing the growth of residential solar.
“What the CPUC did today is a disgrace and a disservice not only to Californians, but to the nation,” said EWG President and Bay Area resident Ken Cook.
“The commission’s decision will hammer the residential solar market in California and undercut Gov. Newsom’s pledge to be the nation’s leader in building a 100 percent clean energy grid,” said Cook.
Solar can play a key role in advancing the state’s ambitious plans for combatting the climate crisis and becoming carbon neutral by 2045. At the same time, the clean energy source can make electricity more reliable and affordable. Putting an effective halt on expanding residential rooftop solar takes the state in the opposite direction.
“By making residential solar economically untenable for millions of working families, the CPUC will crush the only competition the big utilities face,” said Cook.
“This sets up PG&E and the other power companies to keep splurging on misguided, high-cost infrastructure investments,” said Cook. “Instead of California having a robust solar and storage market, the utilities’ plan could lead to more reliance on dirty fossil fuel plants to make up for electricity shortfalls caused by hobbling solar.”
The deep cuts to the monthly credits will be the most severe of any residential solar program in the country. This change will hit working families the hardest as electricity bills in California soar, with PG&E and the other utilities fighting those cost-cutting measures every step of the way.
Many people installed solar to reduce their bills by selling electricity generated back to the grid.
California has the nation’s most successful residential solar program, which has installed solar panels on the rooftops of more than 1.5 million homes, schools, churches and small businesses. The market will fall apart, thanks to the CPUC’s vote, just as it has in Nevada and other states that adopted similar anti-solar plans. The plan will also undermine affordability and system resiliency goals.
“This decision by the CPUC will enshrine in California the flawed monopoly business model that allows utilities to keep embracing natural gas, jack up rates on captive customers and build more unneeded, expensive and dangerous infrastructure,” said Cook.
“It’s beyond a setback. It’s a complete retreat from California’s unrivaled position of leadership in the clean energy revolution. This debilitating precedent by the leading rooftop solar state will threaten rooftop solar programs across the country,” he said.
The CPUC’s proposed decision to slow the growth of residential solar is antithetical to the clean energy goals of the Inflation Reduction Act. In September, 16 members of California’s congressional delegation sent a letter to the chair of the CPUC, arguing that scrapping state incentives would undermine the IRA’s investments in renewable energy.
The Environmental Working Group (EWG) is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.