Californian utilities to modernise solar Net Energy Metering programme

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Three major US utilities have plans to upgrade a 25-year old solar energy programme for consumers in California.

Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E) and Southern California Edison (SCE) have filed a proposal with the California Public Utilities Commission to modernise the solar Net Energy Metering (NEM) programme.

Modernising the NEM programme will help address an unfair and growing inequity stemming from earlier versions of the initiative.

For instance, electricity customers without solar systems are paying about $3 billion more annually in their electricity bills to subsidise existing rooftop solar customers. This equates to customers without solar paying as much as $240 extra every year, or more for some customers with higher energy needs.

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However, upgrades to be made in the programme will only apply to future, new rooftop solar customers, not current solar customers.

If approved, the modernisation programme by the three utilities will:

  • Ensure solar and non-solar customers using the grid pay their fair share for its costs;
  • Minimise any new, unnecessary bill increases for customers without solar, many of whom are lower-income;
  • Help California achieve its climate change and clean energy goals in a more cost-effective and equitable manner; and
  • Update the current, outdated structure to align with today’s lower cost of solar energy and changing grid needs.

By upgrading the NEM programme, PG&E, SDG&E and SCE aim to accelerate the deployment of solar+battery storage projects by consumers, improve discounts offered to customers wanting to adopt solar generation on premises and ensure customers are fairly contributing costs associated with grid operation, mantainance and modernisation.

The NEM programme was established in 1995 to incentivise Californians to install rooftop solar panels to help jumpstart the solar industry, drive down costs and facilitate the transition to a clean energy future.

Within a year, the programme registered 10,000 participants, who have since increased to 1 million today.

Despite some shortfalls, the programme has managed to achieve its goals. Since 1995, the cost of solar has declined by 70% and almost 50% of California’s electricity is now coming from renewables including 15% from rooftop solar, according to a statement.