A panel of three appeals court judges recently heard arguments from both sides in a case involving a controversial decision made by the California Public Utilities Commission (CPUC) that impacts over 1.6 million customers with rooftop solar installations across the state. The hour-long proceeding took place in the First Appellate District in San Francisco, during which Presiding Justice Alison Tucher expressed her panel’s interest in the case.
The CPUC’s decision, issued in December 2022, involved a vote to overhaul the Net Energy Metering rules, affecting the credits received by solar customers for excess energy generated by their systems. Under the new rules, customers would no longer be credited at the retail rate of electricity but would instead be paid at the “actual avoided cost,” which varies depending on the time of day and the demand on the electric grid.
Critics of the decision argue that reducing the credits will deter potential new solar customers from installing systems, ultimately impacting the growth of renewable energy generation. The California Solar & Storage Association has estimated that the average compensation rate for solar customers could drop by as much as 75 percent under the new rules.
The appeal was filed by the Protect Our Communities Foundation, the Center for Biological Diversity, and the Environmental Working Group, alleging that the CPUC’s decision violates a statute in the Public Utility Code that aims to ensure the sustainable growth of customer-sited renewable distributed generation.
The CPUC, however, maintains that its decision was a balanced attempt to address the increasing cost shift to customers without solar systems, and it has defended the new rules in court.
The ruling issued last year also included substantial upfront incentives for customers to pair solar with battery storage systems and set aside funds for low-income customers. The commission projected that the updated rules would save residential customers with solar-plus-storage at least $136 per month on their utility bills.
The historical background of this topic is rooted in California’s commitment to renewable energy and the challenges associated with transitioning to a more sustainable and equitable energy infrastructure. The ongoing debate over the CPUC’s decision reflects the complexities of balancing the growth of renewable energy while ensuring fairness and economic viability for all customers.
As the appeals court considers the arguments presented, a final ruling could have significant implications for the future of rooftop solar energy in California and potentially inform policies in other states as well.
