HeatSpring sat down with Carter Lavin, Director of Membership at the California Solar and Storage Association, to discuss the proposed changes to net metering policy in the California and what that means for states across the country.
Brit: Thanks for joining us, Carter! Can you tell us a bit about yourself and where you work?
Carter: Sure, my name is Carter Lavin. I’m with the California Solar and Storage Association (CALSSA). We are the political voice of the solar industry here in California. We represent over 700 companies that do the vast majority of the solar and storage work that goes on homes, businesses, farms, schools, churches, synagogues, basically customer-sited solar and storage for California.
Brit: Why does CALSSA exist? What’s the need?
Carter: The short version is we’re pushing for this clean energy revolution. A lot of us have this vision of solar on every building, batteries in every building, this distributed world where it’s more resilient and cleaner and cheaper and stronger. That’s a big, beautiful vision. There are people who are fighting for the opposite of that mission.
There are people who like our grid to be dirty. There are people who like our grid to be under monopolistic control, who like the grid to be centralized, and under their thumb. Those people have a lot of political power. They also have a lot of money and they use it to try to crush this industry.
CALSSA exists to really make sure that the solar industry stays alive in the face of these existential threats. We also work at the intersection of government and industry. Sometimes it’s big, huge honking issues, like the net metering fight. Sometimes it’s things like pushing for a solar requirement on all new commercial construction, which we just won this year. Sometimes it’s things as simple as fire code changes for battery installation. Sometimes it’s big epic spikes. Sometimes it’s taking out the trash – but that’s why we exist.
Brit: So you touched on it for a second there, but what is this big, massive issue related to net metering happening right now?
Carter: For the last year and actually for the last several years, there has been this kind of fundamental struggle of who controls the power in California and who doesn’t – meaning literally control the power.
California has been a massive success story in the United States, because of this policy called net metering. It’s a foundational policy. For those of you in different countries or different parts of the country, net metering is when you are making more power than you need at any one moment, you send it to the utility. They buy from you and they pay you a reasonable rate. If you need more power than you’re producing, you buy it from the utility and you draw from that credit. It’s like ‘take a penny, leave a penny’. It’s essentially a credit account that you have with utilities, where you buy from them at retail at full price. You sell to them for slightly less than that.
In the end, it all somewhat nets out to zero. It is the agreement – was the agreement – that has been the rule of the road for a very long time. The utilities want to append that and they want to destroy that.
So right now, retail rates in California are $.28/kWh, depending on time of day and other things like that. If you’re a solar user and you send power back to the grid, you get about $.25/ $.26. You get the retail rate minus some fees. The utilities in the state of California have put out a preliminary decision saying that ~$.25 should be dropped to $.05/kWh. That alone would destroy the financials of the vast majority of solar projects that get installed every year.
In addition, the utilities have pushed an $8 per kilowatt per month fee on every new residential solar customer, which the utility commission of California and the government of California has provisionally accepted. That means that, in California, if you want to get a 10 kW residential solar system, you will now have to pay a thousand dollars a year extra just to be connected to the grid. That would destroy 80-90% of the market. A policy that destroys over 80% of the market is just bad.
That’s what was proposed. That came out in mid-December and was the initial proposal. That was written in pencil. That gets written in pen or etched in stone on January 27th, so it’s coming up soon. We have just a few more days to put a lot of pressure on the utility commission and on the governor who appoints that commission to get them to basically throw out that terrible preliminary proceeding and come up with some alternative that is actually realistic and workable. Something that would not destroy 60,000 solar jobs.
That’s what’s happening in California.
Brit: Wow, that’s a big shift from what’s been going on in the solar industry there. California has been a leader in the United States for years for clean energy adoption. This decision is really damaging to the industry and the jobs there. What does it mean for other states? Does this decision matter for people who aren’t in California?
Carter: Right now in Florida, they have just started their own net metering fight. The association of utilities across America has been pushing for years anti net metering rhetoric and language. California is both the big fight and also the test lab. If the utilities in California pull this off, every other utility in America sees the playbook. They see how to do it – here’s how to destroy the solar market. If it can happen in a state that loves solar, a state with 1.3 million solar customers, what will happen in every other state?
Brit: What can people do? How can we help with this effort?
Carter: The big thing is we really need a lot more attention and noise about this, both focusing on the governor and the utility commission. To that end, on January 13th. We are organizing two simultaneous rallies in California. One is in San Francisco and the other is in Los Angeles. People can get more details on our website.
To be blunt, this all is supposed to go into effect on May 27th. The solar industry could start seeing massive layoffs, starting in June. The governor is only going to step in and do something about this if he feels that people care about this, meaning people are in the streets and people are flooding their office with calls and emails. Contact the governor’s office letting them know that you, as a solar worker or as a solar ally, won’t stand for this.
Also, tell your friends. Anyone can sign the petition on SaveCaliforniaSolar.org. This affects your neighbors, your friends, and so many people. Everyone should be signing this, because the governor needs to hear from the people. The more voices we get out, it becomes very easy for him to see the will of the people and then to enact the will of the people. It’s on us to demonstrate what that will is.
Brit: Is there any other information that’s important to include that we haven’t covered yet?
Carter: I would say one of the key facts about this situation that’s particularly bad is that it hurts existing solar customers.
Currently, if you already have solar, you have your net metering established for 20 years. The proposal is moving that to 15 years. If you are a school and you signed a 20-year PPA or a 20-year loan or some finance agreement assuming you will have 20 years of net metering, you are now very likely underwater with this. You have five years where you have to pay tons of fees or get much lower net metering credits. If you are a homeowner who got a 20-year loan, you are now in trouble. The state needs to hear from you about that. This proposal from the utility commission is a real gross overreach.
This is a question – does the solar industry in California live or die? Does the solar industry in California exist behind the meter or not?
We strongly recommend people get involved. If folks have questions, they can always email me at Carter@CALSSA.org or call us (916) 228-4567. Thanks!