Rooftop Solar Growth Needed by California NEM

The California Public Utilities Commission is now conducting a procedure to modify net energy metering (NEM) policy. NEM controls how much rooftop solar clients are paid for the electricity their solar panels generate. One of the most significant challenges facing the CPUC as it develops the new NEM policy, known as NEM 3.0, is ensuring that rooftop solar continues to grow sustainably in California, as mandated by law.

This NRDC blog illustrates how the NEM 3.0 proposal protects rooftop solar’s long-term viability. Background on NEM and the NRDC proposal can be found in our earlier blog. Assembly Bill (AB) 327, which was passed in 2014, mandates that the CPUC design a NEM policy that is cost-effective for all consumers while ensuring rooftop solar continues to “grow sustainably.” However, AB 327 does not specify what it means to “grow sustainably.”

During the NEM 3.0 procedure, the CPUC must define this word and use the definition of “to grow sustainably” as a vital criterion to evaluate each NEM 3.0 proposal. The definition of the term “grow” is simple. In California, the total amount of rooftop solar installations needs to increase over time. Customers should be encouraged to install rooftop solar systems as a result of NEM policy.

NEM 3.0 can achieve this by ensuring that future solar customers will recoup their investment in a fair amount of time and make money during the life of the system while also helping the environment. The term sustainably, on the other hand, invites discussion. To be truly sustainable, NEM 3.0 must take into account all utility consumers, both those who have solar and those who do not. From the perspective of new solar customers, NEM 3.0 will be sustainable if it allows them to recoup their solar investment in a fair amount of time while also helping the environment.