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Solar Energy Shines in California’s 2013 Legislative Session

The California legislative session ends this week with lawmakers passing four bills that expand and strengthen the state’s growing solar energy market. Together these pieces of legislation give residents, schools and businesses across the state more ways to participate in, invest in and benefit from our growing solar economy. All four bills now await the Governor’s signature to become law.

Here’s a quick run-down of those 2013 bills that clear the way for continued solar growth in California:

AB 327 (Perea) – Net Metering and Rate Reform: Following intense negotiations and tens of thousands of emails from Californian solar supporters, this much-watched utility rate reform bill passed the Legislature with support from the solar industry, utilities and ratepayer advocates alike. All in all, the bill is a solid win, clearing the way for hundreds of thousands of homes, schools and businesses go solar and lower their electricity bills:

  1. It ensures that California’s successful net metering program will stay in place until customers of the three large IOUs have installed over 5,200 MW of net metered generation, instead of being suspended by the CPUC as soon as the end of 2014.
  2. It gives the CPUC authority to remove caps on participation in the net metering program altogether for the first time in California history. The existing cap is set at a rather arbitrary 5 percent of utility non-coincident peak load, beyond which new California solar customers are no longer guaranteed to receive net metering credit for the valuable clean power they deliver to the grid. Over the years Vote Solar has fought time and again to raise this cap: from 0.5 percent to 2.5 percent to its current level. The prospect of an uncapped program is great news indeed!
  3. It allows the CPUC to require the utilities to procure renewables in excess of the state’s Renewables Portfolio Standard targets. That’s right, 33 percent renewables will no longer be a ceiling, but a floor.
  4. It requires that by July 2015, IOUs must submit plans to the CPUC on how to maximize the locational benefits of distributed solar and other resources on the grid. This is exciting because there is so much overall grid benefit to be gained from customer investment in distributed solar where it is needed most, and we think that value should be fairly recognized.

The bill does leave some big unanswered questions that will need to be diligently addressed through implementation at the CPUC:

  1. It authorizes the CPUC to approve up to a $10 fixed charge on residential customers of California’s biggest utilities. Charges like this create a big disincentive for solar and energy efficiency measures because they are slapped on customers no matter how much energy they buy from the utility. We’ll push back against fixed charges at the CPUC, highlighting the need for rate structures that encourage good green behavior.
  2. It directs the CPUC to determine the compensation structure for net metered customers who go solar after the 5 percent program cap has been reached. This decision about the future of net metering must be reached by the end of 2015. We’ll advocate for an uncapped program with a fair structure that ensures customers who go solar receive the full value of the clean energy they feed back to the grid.
  3. It gives the CPUC until March 2014 to determine how net metered customers who go solar under the 5 percent cap will transition to the rules of the expanded program. We’ll argue that solar customers shouldn’t have the terms of their investments changed on them mid-stream.

It’s clear that the work is not done until it’s been fully implemented at the Commission. Bottom line, though, AB 327 makes great strides to provide needed certainty for the growing market and affirms that the state’s lawmakers agree that rooftop solar is here to stay. 

SB 43 (Wolk) – Green Tariff Shared Renewables Program: Solar is growing by leaps and bounds in California, but many residents and businesses in the state still can’t go solar today. The traditional panels-on-your-roof approach to solar simply doesn’t work for renters, tenants of multi-unit buildings, property owners with shaded roofs and plenty of others.

SB 43 changes all that. It creates an innovative green power program that allows any customer of our state’s largest utilities — PG&E, SCE, and SDG&E — to purchase up to 100% renewable electricity for their home or business. That clean power would come from small to medium-sized solar and other renewables projects.  Participants would then receive a credit on their utility bill for the clean energy produced. In doing so, SB 43 opens the door for renters and those with shaded roofs to go solar for the first time. Let’s be clear that this program is no ordinary “green tariff.” It’s not just about customers paying more for some RECs produced who knows where. SB 43 is better for two key reasons: 1. It will result in up to 600 MW of new clean energy projects built in California, sized 20 megawatts or less and 2. It provides participants with tangible economic benefits in the form of bill savings over time.

AB 217 (Bradford) – Low-Income Solar Programs. California’s Single-Family Affordable Solar Homes and Multi-Family Affordable Solar Housing (SASH and MASH) rebate programs have proven hugely successful in delivering utility bill savings and solar job opportunities to disadvantaged communities. The first of their kind in the nation, the programs began in 2009 through the California Solar Initiative, funding for which is nearly exhausted. AB 217 extends the two programs through 2021, ensuring that solar will continue delivering economic benefits to the Californians who need them most.

AB 792 (Mullin) – Utility User Tax Exemption: This bill clarifies that all solar customers are exempt from local utility user’s tax on the clean electricity they generate - regardless of the financing model used. In doing so, it creates more tax certainty for Californians who go solar through a third-party PPA financing model, which accounted for more than 70 percent of the state’s residential solar market in 2012.

Thanks to policymaker leadership and a hefty dose of the pioneering spirit that makes the Golden State famous, solar is a real and growing part of California’s energy landscape. California is the nation’s solar power leader with 3,761 Megawatts installed, according to the Solar Energy Industries Association (SEIA). The state currently generates enough clean, reliable solar energy to power more than 800,000 homes. This growing solar industry employs more than 43,700 Californians, according to the Solar Foundation’s National Solar Job Census. This year’s legislative session closes with our lawmakers having clearly reaffirmed their commitment to continued solar success and to connecting Californians with the clean energy they want. 

Lead image: California flag via Shutterstock

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