After changes implemented in April 2023 decreased incentives for solar customers in California and caused demand to plummet, a newly introduced bill seeks to repeal them.
Assembly Bill 2619, authored by Assemblyman Damon Connolly would require the state’s utility commission to develop new rates for credits provided to solar customers for producing more energy than they consume.
At issue are changes made last year by the California Public Utility Commission known as NEM 3.0—the third iteration of so-called “net energy metering” guidelines that dictate how much utility companies must reimburse solar customers for energy they provide to the grid—which decreased incentives by approximately 75 percent.
“The NEM 3.0 decision has clearly disincentivized clean energy adoption,” Mr. Connolly said in a Feb. 14 press release announcing the new bill. “AB 2619 will restore our commitment to a sustainable, clean energy future and provide relief to Californians who are suffering under these new rules.”
Citing higher fees—including a monthly grid participation charge— and lower reimbursement rates as why demand has diminished, the lawmaker said the impact is felt across the state, with provisions in his new bill prohibiting such charges, taxes, and fees.
“When talking with ... Californians ... it’s clear that additional taxes on solar and the removal of incentives that have helped offset the cost of solar installation has had severe consequences on our ability to generate clean energy,” Mr. Connolly said.
Rooftop solar sales declined by up to 83 percent after the rules were amended, according to the lawmaker.
With higher fees and fewer credits for energy produced, the return on investment for installing solar panels and battery storage increased from fewer than 10 years to 15 years or more, depending on system size and utility company, according to experts.
Layoffs ensued, with more than 17,000 workers let go across the industry in California after the rules took effect, according to a November 2023 survey conducted by the California Solar and Storage Association.
Some businesses are “on the brink of bankruptcy,” according to solar panel manufacturing firm Solarever USA.
A report issued in 2022 by Wood Mackenzie—a global analytics firm providing data to natural resources industries—predicted just such an outcome from the NEM 3.0 rules.
“Ultimately, the [regulations] will create a challenging business environment in the near- to mid-term,” co-author Bryan White, wrote in the report. “Many solar companies will not survive this double whammy of policy headwinds, resulting in significant consolidation in a contracting California residential solar market.”
Homeowners that installed solar panels in recent years also said NEM 3.0 is impacting their finances.
“Solar homes are getting paid pennies for power we feed back to the grid,” John Kes of the Los Angeles area, posted Feb. 10 on X.
Seeking to bring relief to businesses and consumers, AB 2619 awaits assignment by the Assembly Rules Committee to respective policy committees for review in the coming weeks.
