Myth: Rooftop solar in California will be destroyed by reforming Net Energy Metering.
Fact: The future of rooftop solar in California is secure. California’s clean energy future will ensure continued growth; any proposed changes are intended to address who pays for the subsidies. The recent Inflation Reduction Act signed into law by President Biden increases the Federal Investment Tax Credit for installing solar to 30% (up from 26%) through at least 2034.
Also, the California Solar Mandate (Title 24) requires that new homes be equipped with solar panels, which will drive up to 100,000 new solar installations every year regardless of the recent NEM (Net Energy Metering) decision, and starting in 2023, this requirement will also apply to most new commercial buildings. Meanwhile, utilities continue to offer incentives for installing rooftop solar; for example, Southern California Edison offers customers a $500 discount when they buy a rooftop system on the SCE Marketplace.
Myth: Any significant reform of NEM will harm California’s ability to achieve its clean energy/zero-carbon goals by 2045.
Fact: The exact opposite is true. In a recent study by Next10 and UC Berkeley, NEM was identified as a significant driver of higher electric rates in California. High electricity costs jeopardize the state’s clean energy goals by making it more difficult and costly to transition away from fossil fuels.
Myth: Only California’s three investor-owned utilities support NEM reform.
Fact: Diverse organizations representing seniors, consumers and environmental interests similarly recognize NEM needs to be reformed and have submitted separate reform proposals to the CPUC. That’s because the current NEM regulations result in Californians without rooftop solar — primarily renters, seniors and lower-income families — subsidizing those with rooftop solar (who are generally more affluent) to the tune of $4.9 billion each year and growing. According to the Lawrence Berkeley National Laboratory, 70% of California solar adopters are in the wealthiest 40% of society.
Myth: The growth of rooftop solar in California threatens the profits of the state’s investor-owned utilities because it reduces the need to build and operate electric grid infrastructure, from which the utilities earn a profit.
Fact: Changes to rooftop solar subsidies might impact large solar corporation profits but do not impact SCE’s profits. And significant investments in new infrastructure are needed for California to achieve its ambitious decarbonization goals by 2045. The number of homes and businesses with rooftop solar does not reduce the need for these investments, nor does it reduce the need to continue to invest in the grid, which both solar and non-solar customers rely upon. SCE estimates the state will need 80 gigawatts of new capacity from large solar and wind farms and 30 gigawatts of smaller-scale solar at homes and businesses; the latter will require solar installations on 40% of California’s homes by 2030 and 50% by 2045.
Myth: Changes to NEM will make it harder for lower-income households to afford rooftop solar installations.
Fact: The current program forces low-income families to subsidize rooftop panels that they can’t afford. All Californians should have the same opportunity to install rooftop solar panels, and any subsidies provided should be equitably shared by all customers and not fall disproportionally on lower-income families. The CPUC’s recent NEM decision includes more than $600 million from the state budget to support solar for low-income customers.