California takes another swipe at net metering. This time, apartments, schools, and farms get hit

A rooftop solar PV system on Lick Wilmerding High School in San Francisco, California.
(Courtesy: mjmonty/Flickr)

Advocacy groups rally against regulations impacting properties with multiple meters, like schools, farms, and small businesses

On November 16, 2023, the California Public Utilities Commission (CPUC) unanimously approved new regulations on the state’s virtual net metering (VNEM) and net energy metering aggregation (NEMA) programs, impacting how properties with multiple electric meters can share a solar system’s benefits.

With its latest action, the CPUC has excluded properties with multiple electric meters — think schools, farms, multifamily housing facilities, small businesses in strip malls, etc. — from accessing VNEM or NEMA incentives. Instead, those facilities with on-site solar power generation will be required to buy back the power from the utility at full retail prices, according to the California Solar and Storage Association.

These changes modify earlier rules, which decidedly didn’t go far enough to enable renters access to clean energy. Still, many people believe massive groups of Californians are being carved out of the transition.

In an interview with Renewable Energy World, Andrea León-Grossmann, deputy program director for the national non-profit Vote Solar, called this decision disappointing.

“This is just another way that the CPUC is pulling the rug from under a lot of Californians who want to adopt solar,” she said. León-Grossmann believes these policies undermine the state’s climate goals, which will now take more effort to meet.

She’s far from alone. Farmers, school districts, politicians, small businesses, and clean energy advocacy groups are lining up to voice their displeasure with the CPUC.

Dozens of state politicians decried the ruling in a letter sent to Gov. Gavin Newsom, who appoints commissioners to the CPUC.

“Multifamily housing has different electric accounts for each unit. School campuses typically have separate meters for separate buildings. Most farms have multiple irrigation wells that are separately metered,” the letter pleads. “In each of these cases, it is impractical for the customer to install a separate solar array and battery for each meter. The solar tariffs should continue to allow customers to install solar and storage systems for the energy needs of the property as a whole.”

“It is astonishing how intent the CPUC is on continuing to block the growth of solar at the expense of consumers and our state clean energy goals for the benefit of big utilities like PG&E.,” said Bernadette Del Chiaro, California Solar Storage Association executive director, in a statement.

Vote Solar’s León-Grossmann fears how much lobbying power California’s three largest utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric) have in dictating the state’s clean energy transition. She says they’ve got shareholders’ interests in mind.

“And that clearly shows in their advocacy and the results from these proceedings,’ León-Grossmann quipped.

CPUC President Alice Reynolds said the changes, which apply to new projects in 2024, will help California ​“achieve a constellation of goals including grid reliability, greenhouse gas reductions, affordability equity, consumer protections, and cost containment of utility bills.”

León-Grossmann, for one, disagrees. “We have this regulatory body that really has been captured by the (utility) industry,” she said of the CPUC.

Vote Solar is concerned these net metering regulations will undermine some of California’s initiatives, like the Clean Energy 2028 Roadmap.

“Los Angeles County is trying to deploy all (this) rooftop solar, especially with multifamily buildings.
You have 2500 gigawatts. So what is gonna happen with that?”

The ruling comes nearly a year after a CPUC decision on “NEM 3.0,” which has since rocked the state’s industry-leading residential solar market. In that decision, the CPUC began the process of sunsetting the state’s net metering construct in favor of an “improved version of net billing” designed to incentivize co-located energy storage.

GO DEEPER: Vote Solar executive director Sachu Constantine joined the Factor This! podcast to break down the latest in the fight to save rooftop solar in California. Subscribe wherever you get your podcasts.

Drawing another ‘red line’ on the grid?

Previously, Californians could save money by consuming rooftop solar power onsite and selling any excess back to the utilities at retail rates, further offsetting electric bills. This made switching to renewables a smart economic solution, especially for customers in low-to-middle-income communities.

Enter the CPUC, which initially decided last December nobody could benefit from virtual net metering; now renters are able to do so, albeit only in the case of separate units and not for common areas. And any excess energy sent back to the grid? It’s paid out at an export rate that’s only a fraction of the previous retail rate.

León-Grossmann thinks that alone will destroy the economics of community-based solar in many places, especially in farms and schools. “It’s just not gonna pencil out,” she warns. “Now it’s really going to be impacting students.”

The CPUC says it’s tough to precisely measure how much solar power vs. grid power is actually being consumed in specific instances.

“That doesn’t really hold any water,” León-Grossmann argues. She fears these policy decisions will undoubtedly limit renters’ access to clean energy by making them more expensive.

That concern is shared in a letter to the CPUC penned by multifamily housing providers and community leaders, which claims more than 37,000 renting families currently benefit from onsite solar under the VNEM program.

“Renters are often low-income or minority populations that face systemic socioeconomic barriers. Renters lack the ability to make traditional investments in clean energy resources unlike property owners,” it reads. “VNEM enables multifamily properties to make these clean energy investments that result in tangible economic benefits for renters that they otherwise would not receive.”

Last year, California passed an environmental and social justice plan that promises to “safeguard the environment, assuring safe and reliable access to all Californians.” However, hard data indicates access to renewables is inequitable.

According to CALGem, more than 3.8 million Los Angeles residents live within a quarter mile of an active or idle oil well. CalEnviroScreen 4.0, released by California’s Office of Environmental Health Hazard Assessment (COEHHA), shows how pollution is distributed across the state. Unsurprisingly, when compared to maps showing distributed rooftop solar in California, socio-economic inequities become quite clear, says Vote Solar’s León-Grossmann “If you look at even those two… It’s just environmental racism basically,” she said.

“In Los Angeles for instance, the areas that have been overwhelmed by oil extraction compared to where the areas where most of the clean energy has been deployed… There’s like a clear red line and we need to make sure that that red line goes away. Decisions like this are not going to help get rid of that red line.”

“You’re talking about over 100 pages on how we’re gonna do right by Californians, especially disadvantaged communities,” León-Grossmann said of the environmental and social justice plan. “It just seems like they published it and then they tucked it away instead of really putting it into play, ensuring that those communities are again overburdened by dirty energy.”

What can be done now?

After going back and forth since last year, León-Grossmann thinks it’s very unlikely CPUC will change anything else in regard to this particular guidance. Now she and other advocacy groups are counting on the state legislature for a fix.

Some relevant legislation stalled last year and will likely be reconsidered in 2024, including SB 527 – Min and AB 593 -Haney, Stern, which strive to decarbonize buildings. 

SB 527 requires the CPUC to establish the Neighborhood Decarbonization Program, a cost-effective, community-scale program that will decarbonize neighborhoods by providing both energy bill affordability for ratepayers and healthier, safer, more climate-resilient buildings.

“It’s gonna take way more to reach those (climate) goals,” says León-Grossmann. “And the fact is that communities that have had to bear the brunt of the fossil fuel industry are going to continue to bear the brunt.”