December 12, 2011
The Honorable Governor Jerry Brown
California State Capitol
Sacramento, CA 95814
Re: Keep California’s Bright Spot Shining: Preserve and Expand California’s Net Metering Program
Dear Governor Brown:
As a broad coalition of local leaders, clean energy businesses, green jobs advocates, consumer and environmental organizations, we are writing to express our strong support for the preservation of California’s current net metering program and to ask for your help in lifting the cap on net metering to ensure that this policy continues to play a leading role in achieving your goal of building 12 GW of localized renewable energy by 2020.
California’s rooftop solar power market, along with other forms of local clean energy, provides many benefits to the state, including tens of thousands of jobs, clean air, reduced global warming pollution and a more diverse and, therefore, stable electricity grid. In fact, California’s solar energy market is the one bright spot in California’s economy with 3,500 companies employing more than 25,000 people statewide. Continued growth within this industry, which is made up primarily of small California businesses, is on the horizon.
Thanks in large-part to the effectiveness of net metering—a cornerstone of the Million Solar Roofs Initiative passed in 2006—in driving consumers toward investing in technologies like solar power, California has just celebrated the important milestone of installing more than 1 GW of rooftop solar. This is a significant achievement shared by only five other countries in the world. Looking ahead, California has tremendous potential to build upon this solid foundation to achieve not only your vision of building 12 GW of localized power, but to surpass your goal five, six, even seven fold.
To get there, it is imperative that the State of California continues to offer net metering as a powerful motivator to drive consumers toward investing in solar power. Net energy metering is attractive because it makes sense—consumers get a credit for what they produce at the same rate for what they are charged. This arrangement is easy to understand, and homeowners and business owners readily grasp that their solar systems can generate excess energy that will spin their meter backwards. This allows customers to clearly evaluate the costs and benefits of their investment in solar energy.
However, in the last several months the investor owned utilities (IOUs) have made a concerted effort at the California Public Utilities Commission (CPUC), combined with heavy pressure at the legislature, to change the rules of net metering and accelerate limitations on the program due to the 5% net metering cap. The state takes a huge risk in significantly changing a mechanism that is well known and accepted by consumers.
California must ensure that:
1. Net metering customers are not charged for the electricity that they put onto the grid for others to use, and
2. The 5% cap on net metering is lifted to ensure that California continues to be a hotbed of investments in clean energy technologies like solar power.
Currently, San Diego Gas & Electric is proposing new rates for its solar customers—changes that could serve as a clear disincentive for going solar, and set an alarming precedent for solar customers throughout the state, if approved by the California Public Utilities Commission.
With the proposed changes:
• SDG&E’s solar customers would not only be charged for any energy they use from the grid, they would also be charged for the energy they contribute to the grid for others to use. The California Center for Sustainable Energy estimates that typical residential solar owners would see their SDG&E bills increase by $10 to $40 per month. Schools, local governments and business currently on the most “solar friendly” commercial rates would see their bills increase by thousands of dollars annually.
• Residents who are now considering solar PV would see their payback times lengthen and internal rates of return decline, though the return would often still be greater than zero. Non-residential customers would not generally be so lucky, particularly if the 30% federal investment tax credit is terminated, as seems possible.
• Mixed signals would be sent to the solar marketplace. After years of carefully planned and successful policy support, these mid-game changes would significantly reduce the benefits of investing in solar, undermining the future development of California’s critical solar marketplace.
Such a proposal would not only threaten one of the few growing sectors in our economy, but it fails to recognize the clear benefits that distributed renewable energy resources provide to the grid and to the state as a whole. Benefits such as reducing line losses, freeing up distribution capacity, and reducing the need to expand distribution and transmission systems.
While several policies will be needed to continue to build California’s rooftop solar market and other forms of localized clean energy, net metering has played a leading role in driving the exponential growth in California’s clean energy markets. However, if the customers who have participated in California’s solar programs are penalized for using net metering, the benefits of California’s solar program will rapidly decline. California cannot afford to turns its back on such a powerful policy driver for renewable energy investment.
We respectfully ask that you work to preserve the current net metering program by requesting the CPUC immediately clarify the cap calculation methodology and reject the illegal rate proposal by SDG&E. These actions will set the table for a thoughtful and balanced consideration on lifting the cap on net metering so that clean energy can continue to transform our economy, generate jobs, benefit consumers, protect our health and preserve our environment for generations to come.
Clean Energy Advocate
Utility Consumers' Action Network
Environmental Health Coalition
California Solar Energy Industries Association
Director, Western Policy
The Solar Alliance
The Vote Solar Initiative
Sierra Club California
Los Angeles Business Council
California Environmental Justice Alliance
President & Founder
Sullivan Solar Power
Senior Vice President
Sanyo North America Corporation
Manager, Policy & Business Development
Director of Government Affairs and Senior Counsel
Edwin Orrett, PE
Resource Performance Partners, Inc.
Donald E. Osborn
Spectrum Energy Development Inc.
PHAT Energy Corp.
Patrick A. Redgate
President & CEO
AMECO Solar, Inc.
Centric Building Inc.
VP Sales & Marketing
Chairman, Sustainable Napa County
Vice President, The Gasser Foundation
Managing Director of Operations
Charles E Henning, CHA
The CIA Greystone
Donn L. Black; Antonia Allegra
Geoff. Van Loucks
Del Mesa Carmel Community Association
California Climate Policy Director
Center for Biological Diversity
Aaron Jobson, AIA, LEED AP
Principal, Quattrocchi Kwok Architects
Board Member, School Energy Coalition
Women's Energy Matters
Green Leap Forward
Residents Organized For a Safe Environment (ROSE), San Clemente
President, Board of Directors
Customer Service Specialist
Cc: PUC Commissioner Peevey, PUC Commissioner Ferron, PUC Commission Sandoval, PUC Commissioner Florio, Wade Crowfoot, Cliff Rechtschaffen, Julia Levin, Michael Picker, Ken Alex