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Regulators cast more clouds over California solar market

California regulators are poised to shake up the solar market for the state’s apartments, schools and farms.

An administrative law judge is proposing changes that critics say make the economics of investing in solar projects unappealing.

The California Public Utilities Commission (CPUC) rewrote the net energy metering (NEM) rules for solar on single-family homes last year and could do the same for bigger complexes that have one solar array with multiple metered hookups.


It is part of the legislatively mandated review of the state’s NEM solar rules.

Changes approved for owners of single-family homes slashed the value of electricity sold back to the grid, adding to the length of time it would take to recoup the thousands of dollars homeowners invested in installing solar panels on their roofs.

The new proposed decision calls for an end to something called virtual net metering for complexes that have multiple electric meters but are only served by one solar array.

“Virtual net metering allows that property to install one solar system on the property,” said Jae Berg, of the Center for Sustainable Energy.

It also sets up the mechanism that allows each electric meter on the premises to share in the savings that a solar array generates.


“So there’s contractors that specialize in virtual net metering, and they are experts to help property owners go and figure out how to break up the allocations so that each property and each tenant is getting the desired amount,” Berg said.

Virtual net-metering systems are already in place around California, and the system is used to share solar benefits in qualifying low-income housing complexes.

California’s Solar on Multifamily Affordable Housing program relies on virtual net metering, and that program will continue through 2050 — even if other changes are adopted.

“We need 10 times more solar power than we have today, and we’re not going to get there if we basically tie up the economics of solar for renters.”
Bernadette Del Chiaro, California Solar and Storage Association

But the proposed decision ends virtual net metering for the rest of the state’s rental complexes.

California’s investor-owned utilities — including San Diego Gas and Electric — argue in legal filings that developing an updated virtual net-metering program is too complicated and too expensive.

“The utilities have no problem billing us. They can figure that out,” said Bernadette Del Chiaro, who works with the California Solar and Storage Association. “What they’re complaining about is giving us credits and lowering our energy bills. They’re saying that that’s just too difficult. And we just don’t buy it. We know it’s not true.”

SDG&E declined to comment.

The investor-owned utilities also indicate in filings that they support the recommendation to require complexes to sell their solar-generated electricity to the utilities at the wholesale price.

Under this decision affected customers would then buy electricity from the utility at the retail price without having the solar array offset any energy generated during the day, like homeowners are allowed to do.

“We are developers of affordable housing,” said Arnulfo Manriquez of the Metropolitan Area Advisory Committee. “We build multifamily housing and we’ve been installing solar at a lot of our apartments.”

The MAAC social services nonprofit operates a 300-unit affordable housing complex in Southeast San Diego and virtual net metering allows everyone in the complex to benefit.

“We want solar because using solar is using a natural resource,” Manriquez said. “It does have substantial savings to our operation on the cost that the landlord pays. But then the savings also get passed through to the residents for utilities that they spend individually in their own unit.”

Changing the rules and eliminating virtual net metering makes solar financially unappealing for Manriquez, and he said future projects would likely do without solar arrays.

“Through this proposed decision, which would virtually end the program, it’s really taking multiple steps back for us,” said Tyler Valdes of the California Environmental Justice Alliance. “Really for us we believe it’s going to perpetuate a long legacy of racism.”

The CPUC was set to take up the issue last month, but postponed that decision for a couple of weeks. Some observers think that changes may be in the works.

But Del Chiaro said she was not optimistic, because this is the same commission that gutted financial benefits for owners of single-family homes.

“We really would like to see this commission get back into the place of promoting distributed rooftop solar for Californians,” Del Chiaro said. “We need 10 times more solar power than we have today, and we’re not going to get there if we basically tie up the economics of solar for renters.”

The CPUC’s five commissioners will likely decide the fate of the proposal when they meet on Thursday.