In the past, we have talked about how some states have tried to prevent the average citizen from getting solar on their homes, but not California. Think again. This fall, the utilities presented a formidable proposal to the California Public Utilities Commission. The solar industry fought hard with demonstrations, phone calls and emails to PCUC and Governor Newsom. Thankfully, the utilities didn’t get everything they were asking for, but the CPUC passed a proposal that could put many solar companies out of business. 2023 is going to be a rough year for solar companies, and even strong ones might need to lay off many of their employees.
With California’s goals of being energy independent, this is going to slow down the solar progress of the state. CPUC, along with the utilities, is making it more difficult for the average citizen to benefit from having solar energy. Of course, there are going to be solar farms going up, but using all the empty roofs would be much easier on the environment. Also, the solar is being produced where it is being utilized. With solar farms, the energy will have to be transported on electric lines from distant places. Then charge the extra expense to those low-income users they seem so worried about. So, what are we dealing with and what will be the solar companies’ next move?
Solar owners produce more kWh during the day than they can use. They are currently hooked up to the utilities with Net Metering 2.0 (NEM 2.0), and the extra energy they produce goes back to the utility grid. The solar system shuts down at dusk and then they use energy from the grid. The utilities credit the home or business owners the same amount that they are charged, around $.30/kWh. Those under NEM 1.0 and NEM 2.0 are grandfathered in for 20 years from the date of purchase.
On December 15, 2022, the CPUC voted to change that. With NEM 3.0, instead of being credited with $.30/kWh, they will be credited with only $.08/kWh when they use it back. This results in a lower financial gain for the solar customer. The only way to offset this loss is to install storage batteries, so no extra solar goes on the utilities grid, but rather stores in the batteries. That way when the sun goes down and the solar shuts off, the home or business can run off of the battery. This will add to the price of the solar system, but here at Cosmic Solar we have daily requests for battery storage because it also gives you protection during power failures. Unfortunately, it will lengthen the payback years for the purchase of the system, but it will mitigate the financial loss with NEM 3.0.
Solar.com estimates a monthly bill of $250 will be reduced to $18 per month with solar under Net Metering 2.0. Under NEM 3.0 that will increase to $95, which is still a saving of $155, and batteries would take it back down to $18. A lifetime saving of $110,000 would become around $75,000. It is still saving but less than before.
The good news is that NEM 3.0 does not go into effect until April 13th, so if Californians get their solar applications submitted as soon as possible it will grandfather them into Net Metering 2.0 for twenty years. For those Californians who want to do solar, better sooner than later. The utilities are offering an incentive for battery storage by allowing customers to add batteries later without being bumped up to NEM 3.0. Whether battery storage is done up front or later, it increases the value of pairing battery storage with solar.
Our Cosmic Solar & Roofing staff is on hand to submit interconnection paperwork immediately after the sale to ensure we can grandfather as many people as possible in to NEM 2.0 before April. If you want to install a solar system, call Cosmic Solar & Roofing right away at 760-749-1111 or go to: www.cosmicsolar.com.
Judith Shadzi
Vice President of Cosmic Solar & Roofing, Inc
