California’s Governor rules that schools and farms cannot use their own solar energy production

From pv magazine USA

California Governor Gavin Newsom has once again made a ruling in favor of the three major investor-owned electric utilities and against solar-supportive consumers in his state, rejecting Senate Bill 1374. The bill sought to undo regulations that make it economically harder for schools and farms to install solar. 

Over the past couple of years, California has shifted from being the crown of the U.S. rooftop solar market, to a state with some of the most aggressively anti-consumer and pro-investor-owned-utility regulations in the nation.

California has made numerous cuts to solar incentives and programs in its state, including reductions in the valuation and crediting of exported solar generation, cuts to its emerging community solar program, and imposing a monthly fixed charge that erodes the potential savings brought on by rooftop solar. Numerous national installers have gone bankrupt in the wake of these actions, and over 17,000 solar jobs have been lost, according to the California Solar and Storage Association (CALSSA).

“California should be in the golden age of solar, but our state’s regulators – backed by powerful utilities that fear solar competition – are intent on halting California’s clean energy progress,” said Bernadette Del Chiaro, executive director of CALSSA.

Now, Newsom has satisfied the demands of Pacific Gas and Electric, Southern California Edison, and San Diego Gas & Electric, rejecting Senate Bill 1374, a bill sponsored by Senator Josh Becker.

“This bill is simply a matter of fairness. Multiple-metered customers should get the same treatment as everyone else — not have to sell their power to the utility at low prices and immediately buy it back at much higher retail prices,” said Becker.

Senate Bill 1374 was designed to undo a ruling from August 2023 that determined that properties with multiple electric meters, like schools, farms, and multifamily housing, cannot use electricity produced by their solar array. Even if these entities fully own the system, they are forced to sell power to the grid at a low rate, and then buy it back at a much higher rate.

The billing structure means that schools, farmers, and multi-family homes, which pay among the highest electricity rates in the world, are essentially forbidden from reaping the benefits of their investments. They must sell electricity generated on their roof to the grid for a wholesale price, and then buy it back at a retail price, multiples higher than what they paid for it. This is the market condition that Gavin Newsom voted to uphold, despite strong support from the legislature to restore a fairer market.

“Public schools have one general fund that everything comes out of: teachers’ salaries, textbooks, mental health counselors, utility bills-–it all comes out of the same bucket,” said Sam Davis, Oakland Unified School District board president. “In previous years, we used solar energy to offset these rising costs and invest the savings in programs that improve educational equity. Restoring and protecting these incentives is critical to ensuring all students receive the education they need to thrive.”

What’s more, local zoning laws and permitting requirements can make it difficult, if not impossible in some zones, for ratepayers to cut ties to the utility and go completely off-grid. Customers are essentially captive to the sell-low, buy-high scheme run by electric utilities.

Though California has historically been a market leader in rooftop solar, advocates say there is much progress to be made, calling Newsom’s rejection “shortsighted.” California currently has taken advantage of about 10% of its technical rooftop solar potential.

Utilities have justified cuts to rooftop solar programs based on an argument that non-solar customers subsidize those with solar. The utilities alleged the bill “is likely to trigger grid upgrades, which results in high cost for all, but for the benefit of only a few customers.” However, analysis from the California Public Utilities Commission (CPUC) has determined that non-residential solar programs have not caused a cost shift.

“We’re disappointed in Gov. Newsom’s decision to pump the brakes on this popular, proven clean energy resource, especially as cuts to solar incentive programs in the last two years have made rooftop solar’s future so uncertain in California,” said Steven King, Environment California.

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