California PUC seeks to limit self-consumption of solar in new virtual NEM rules


The California Public Utilities Commission (CPUC) proposed new rules last week that would “make it unaffordable for renters in multifamily housing, farms, and schools to benefit from rooftop solar and battery storage,” according to the California Solar & Storage Association (CALSSA).

Background | The Virtual Net Energy Metering (VNEM) and Net Energy Metering Aggregation (NEMA) programs let properties with multiple electric meters install a single solar system for the entire property, sharing one solar system’s electricity and net metering credits with all customers and meters on that property.

Why it matters | This brings the benefits of going solar to many types of consumers who otherwise would not benefit from Net Energy Metering (NEM), the program that makes solar more affordable by crediting consumers with solar systems for the excess energy they produce and share back with the energy grid.

Renters and apartment complexes are first who come to mind, but also farms, which have separately metered irrigation wells, and commercial developments and school campuses that rely on the ability to share solar generation and net metering credits.

CPUC proposed changes | The CPUC proposed changes that would deny multifamily properties the ability to consume the energy that they produce on-site without selling it to the utility and buying it back at higher rates. The proposed decision is slated for a vote by the CPUC commissioners on Sept. 21.

Counter to NEM 3.0 | Last December, the CPUC issued its controversial NEM 3.0 decision to alter the value of solar credits for single-family homes. That decision includes a distinction between energy consumed on-site and energy exported to the utility electric grid.

  • NEM 3.0 It drastically reduced compensation to customers for exported energy. It drastically reduces compensation to customers for exported energy, but allows customers to continue using their own generated electricity in real time. Customers consuming the energy they generate results in them buying less energy from the utility.
  • The proposed decision on virtual net energy metering does not include a distinction between energy consumed on-site and energy exported to the utility electric grid.

According to CALSSA | “It effectively prohibits customers from buying less energy from the utility even when they produce and consume energy on-site in real time. It would force customers in multi-meter properties—such as renters, small farmers, schools, and colleges—to sell all of their generation to the utility at low rates and buy it back at full retail rates.”

CALSSA believes the decision could end the ability of apartment buildings and many schools and farms to install solar and energy storage.

Response | Hundreds of organizations and businesses representing clean energy and renters’ rights advocates, affordable housing, farms, and schools—as well more than 135 local elected officials—previously called on the California Public Utilities Commission (CPUC) to reject proposals from the utilities and CPUC Public Advocate to make it nearly impossible for their constituencies to benefit from rooftop solar and battery storage. The top recommendation in those letters was maintaining a distinction between self-generation consumed on-site and energy exported to the electric grid.

A recently adopted resolution by the Oakland City Council calls on the CPUC and Governor Newsom “to reject any proposals that seek to frustrate or dismantle the ability of multifamily tenants and schools to avail themselves of the benefits of local, renewable, and affordable energy through rooftop solar and battery storage.” Instead, the City Council urged the CPUC to “approve a net energy metering tariff for multifamily housing and schools that includes full credits and savings for multifamily tenants and schools from customer generated energy.” 

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