California Supreme Court to hear appeal seeking to overturn new rooftop solar rules

Rob Nikolewski, The San Diego Union-Tribune on

Published in Business News

A trio of environmental groups opposed to recent changes to the rules affecting the 1.8 million Californians who have installed rooftop solar on their homes and businesses will get their day before the state Supreme Court.

The high court has agreed to hear arguments by the Environmental Working Group, the Center for Biological Diversity and the San Diego-based Protect Our Communities Foundation, appealing a decision by the California Public Utilities Commission that slashed the financial compensation solar customers receive when their systems generate more electricity than they consume.

"We could not be more pleased that the court decided to take our case," said Malinda Dickenson, legal and executive director at the Protect Our Communities Foundation.

The case is not expected to be heard for a few months, since briefs from each side must be submitted to the court and a date on the docket is still to be determined. Arguments will be made before the seven justices of the California Supreme Court, based in San Francisco.

In December 2022, the utilities commission unanimously voted to approve a third iteration of the state's net energy metering program, colloquially called NEM 3. The new rules went into effect in mid-April 2023.

The complicated and controversial 260-page decision included incentives to encourage customers to pair solar installations with battery storage systems.


But the revised tariff no longer credited new rooftop solar customers at the retail rate of electricity when their systems generate excess energy. Instead, they get paid at the "actual avoided cost," which is lower. The commission said the change sends "more accurate price signals that encourage electrification."

California utilities — as well as some academics and consumer groups — argued that the earlier NEM rules needed to be changed, saying the growing number of rooftop installations left customers who don't have solar paying an unfair share of the fixed costs that come with maintaining the electric system — things like wires, substations and transformers.

But the California Solar & Storage Association, which opposed the commission's decision, estimated the average rate of compensation would drop from 30 cents per kilowatt-hour to 8 cents — a reduction of 75 percent.

Since solar systems can run into the tens of thousands of dollars, opponents of NEM 3 say the changes will extend a new customer's payback period — the point where the amount of money they save in lower bills matches or exceeds the amount of money they spent to buy the system.


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