California appeals court rejects challenge to state’s updated net metering rules (original) (raw)

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UPDATE: Dec. 21, 2023: A three-judge panel for California’s First Appellate District Court on Wednesday dismissed a challenge brought by three groups against the California Public Utilities Commission’s latest update to the state’s net energy metering rules. “The scope of our review is ‘limited’ ... and there’s a ‘strong presumption’ in favor of the Commission decision’s validity,” the ruling stated.

Dive Brief:

• A California state appellate court heard oral arguments Wednesday in a challenge brought by environmental groups against the state’s new rules around net metering.
• The April rule changes were necessary to modernize California’s grid and “[reduce] the amount customers without solar pay to support the program” — as well as incentivize solar plus storage, which saves customers 137amonthontheirenergybillsonaverage,asopposedtothe137 a month on their energy bills on average, as opposed to the 137amonthontheirenergybillsonaverage,asopposedtothe100 a month average savings from solar alone, a spokesperson for the California Public Utilities Commission said.
• California’s updated net metering policy, known as NEM 3.0, has caused significant job losses in the state’s rooftop solar sector amid high demand for solar labor nationwide.

Dive Insight:

“The CPUC’s decision updated [Pacific Gas and Electric]’s, Edison's, and [San Diego Gas & Electric]’s NEM tariff to reflect the actual value of customer solar energy exported to the grid and to control electricity costs for all customers,” the CPUC spokesperson said. “The new tariff is structured in a way that brings the [investor owned utilities] more in line with the incentive levels of California’s [publicly owned utilities], which are generally lower.”

But the new policy violates various legal requirements that the California legislature created around net metering, environmental groups told a panel of judges for California First Appellate District, Courthouse News Service reported. The plaintiffs in the case include Environmental Working Group, Center for Biological Diversity and Protect Our Communities Foundation.

“The requirement that the commission value the benefits of customer-sided generation has been on the book for 10 years, it was adopted in 2013, and yet the commission has repeatedly refused to value the societal or non-energy benefits of customer-sided generation,” Protect Our Communities Foundation attorney Ellison Folk told the judges, Courthouse News Service reported.

But the CPUC is not required to take societal benefits into consideration, commisson attorney Edward Moldavsky said.

“If the legislature had wanted the commission to consider externalities, it could have done so through clearer language in the statute saying ‘you must consider this,’” Moldavasky said, according to Courthouse News Service.

A November report from the California Solar and Storage Association said the net metering changes can be linked to a 77% to 85% drop in sales since 2022, which will lead to 17,000 job losses by the end of the year.

“The massive job loss represents 22% of all solar jobs in California. More pain is expected as 59% of residential solar and storage contractors anticipate further layoffs,” CALSSA said.

“The general outlook is grim,” said Carlos Beccar, marketing director of Fresno-based solar company Energy Concepts Enterprises. “Next year is going to be even worse. The job loss is going to probably double.” The company has already had to cut around 50% of its employees, he said, and added that it takes anywhere from six months to a year of on-the-job training for a solar installer to become “comfortable” in the role.

Beccar said the residential solar industry in California “is not past the point of no return,” but he thinks a recovery from this downturn would require another revision of the state’s net metering rules.

Meanwhile, the Solar Energy Industries Association issued a report in July that the U.S. solar workforce would need to grow to “more than a million workers” for solar to reach 30% of U.S. electricity generation by 2030, and the country still has “a long way to go to meet this goal.” In a 2022 survey of solar industry employers, SEIA found that 44% said it was “very difficult” to find qualified applicants.

Though Energy Concepts Enterprises had taken steps to diversify by expanding into battery sales and installation, Beccar said, the company doesn’t expect to be profitable next year.

“If we break even we will be very, very happy,” he said. “We’re just trying to survive this downturn.”