April 21, 2012

California considers net metering change

The California Public Utilities Commission (PUC) has proposed a decision that, if approved, will likely boost renewable energy use by homeowners, businesses, and commercial uses and lower energy costs for both solar and non-solar energy ratepayers.

The proposal, put forward by PUC Chairman Michael Peevey, clarifies the methodology to fairly calculate the cap on net energy metering, a billing arrangement that allows utility customers to offset energy use with their own renewable energy systems (such as electricity-generating solar panels). Net metering works like “rollover minutes,” with customers receiving credits on their bills for the excess power they generate that is put back on the grid.

"When we crafted California's original net metering law, the goal was maximize the amount of clean distributed energy on the grid,” said former Assemblyman Fred Keeley, author of California’s net metering law “By proposing this methodology, the CPUC is complying with the original legislative intent and helping California lead the way toward a clean energy economy.”

Established in 1995, California’s net metering policy has helped make the state the nation’s solar leader. But there is a cap on the amount of net metering that must be made available to customers. California’s law sets the cap at “5% of aggregate customer peak demand,” but does not specify how utilities should calculate that number. Consequently, utilities uses a more restrictive methodology that results in almost 50% less net metered solar and renewable energy than would otherwise be allowed. Chairman Peevey’s proposed decision clarifies that utilities should use the cap calculation methodology that results in more Californians having access to the energy bill saving benefits of net metering.

“This is about choice,” said Vote Solar Initiative Executive Director Adam Browning. “Do we want to allow Californians to generate their own electricity using clean, renewable power or stay beholden to the utilities? Do we want to allow people to put panels on their own roof and get fair credit for that power? Schools across the state are already saving $1.5 billion on their electricity bills thanks to net metering. Do we want more of that, or less? This proposed decision comes down on the side of more.”

The Solar Energy Industries Association (SEIA), the Vote Solar Initiative, Sierra Club and the Interstate Renewable Energy Council submitted joint comments in the PUC’s cap calculation proceeding. The proposed decision will be considered by the entire commission at an upcoming hearing, to be held no sooner than 30 days from the issuance of the proposed decision.

Solar is the largest and one of the fastest growing segments of the state’s new green workforce, employing more than 35,000 Californians today, according to a report by the Solar Foundation.


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