How Will CPUC’s Ruling on NEM Impact California Solar?

California’s net metering rules have been in for quite the overhaul this year, and November brought yet another ruling by the California Public Utilities Commission (CPUC). This time, the CPUC updated its onsite solar and storage tariffs for multimeter properties, specifically through the state’s Virtual Net Energy Metering (VNEM) and Net Energy Metering Aggregation (NEMA) programs.

Their proposal was issued November 8th, and the final decision was made on November 16th. In this post, we’ll summarize the details of the CPUC’s decision and what it all means moving forward.

2023’s VNEM & NEMA Updates Cut Back Incentives

The CPUC’s decision drastically affects the economic viability of solar for properties with multiple electric meters, such as schools, farms, apartments, and small businesses. These properties, under the new decision, cannot use solar energy produced on their rooftops to offset utility bills, reducing financial incentives for adopting solar. They must instead sell the energy back to the grid – at lower rates than those charged for purchasing energy.

While residential meters in apartment complexes are allowed to participate in net metering, common and shared areas (like hallways and outdoor spaces) are excluded. This exclusion diminishes the incentive for building owners to install solar panels, meaning that fewer individual tenants will be able to access solar benefits as time goes on.

These tariffs will apply only to future customers, with a 90-day grace period for current customers to enroll in existing tariffs before the new ones take effect​.

Another Hurdle for California’s Solar Transition

The barriers put in place by the VNEM & NEMA updates have dealt a blow to future solar expansion. Industry leaders reacted with disappointment.

Steven King from Environment California argued that the decision could leave many viable rooftops without solar panels, missing opportunities for renewable energy generation and utility bill reductions. And CALSSA executive director, Bernadette Del Chiaro, expressed worry that this will only worsen the effects of CPUC’s NEM 3.0 update, which has already triggered job losses in California’s solar market.

Stephanie Doyle, California State Affairs Director for the Solar Energy Industries Association (SEIA), issued the following statement after the decision was announced:

“Yesterday’s vote by the California PUC is another step backward for a state that should be at the forefront of the clean energy transition. This decision does not allow schools, farms, and small businesses to fully benefit from onsite solar generation, making it far more difficult for them to choose solar. These entities are the backbone of our communities and are the ones that can most benefit from the cost savings that come with clean energy.

 “Higher interest rates are already creating economic headwinds for solar and storage companies, and the impacts of climate change continue to intensify. It’s time for Governor Newsom and other state leaders to step up and ensure California can stay on track to hit its clean energy targets.”

Like Doyle, many of California’s solar advocates are urging state leaders to address the negative impact of these changes and realign with the state’s clean energy goals. But it will be quite some time before we can expect the possibility of new hearings.

Finding Stability in California’s Solar Market

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