California regulators withdrew a proposal, widely opposed by the solar industry, that would have reduced compensation to residential solar users for selling their excess electricity back to the grid.
Administrative Law Judge Kelly Hymes, who has overseen the drawn-out proceeding at the California Public Utilities Commission, issued an order Thursday withdrawing the proposal to reform what’s known as “net energy metering.” Hymes subsequently issued another revised proposed decision for reforms, which includes substantial changes.
“For the sake of transparency and due process, the breadth of the changes necessitates a new proposed decision,” Hymes said in the ruling.
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The withdrawn net metering proposal would have added a “grid participation charge” of $8 per kilowatt of installed solar per month to residential users and would have reduced compensation rates paid to them by utilities for power sold back to the grid.
Utilities supported the reforms, as did some environmentalists, who argued that fixed grid charges were being unfairly born by lower- and middle-income electricity customers as wealthier residents deploy solar and buy less power from the grid.
Prominent lawmakers and figures, from Sen. Dianne Feinstein (D-CA) to Elon Musk, weighed in against the proposal.
Solar interests insisted it would disincentivize the expansion of solar technology, for which California is the top market. They also argued the reforms would work against the shared climate change agenda of California’s majority-Democratic government and President Joe Biden, which is built on an exponential increase in solar generating capacity.
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The revised proposed decision “represents a notable shift in favor of rooftop solar,” said Timothy Fox, vice president of ClearView Energy partners.
“While the new proposal would extend the payback period for rooftop solar compared to the status quo, we consider the reforms offered in last year’s proposed decision as more severe,” Fox said.
Favorable changes include the elimination of the grid participation charge proposed in the previous proposal.
