California’s NEM 3.0 Stopped In Tracks

Widespread Criticism Later, California Public Utilities Commission Delays Decision On NEM 3.0

California’s NEM 3.0 Stopped In Tracks

US residential solar companies including SunPower will benefit from the California commission’s decision to delay pronouncing a verdict on its controversial NEM 3.0, according to Roth Capital Partners. (Photo Credit: SunPower Corporation)

  • CPUC has asked for more time to take a decision on its proposed NEM 3.0 net metering changes
  • SEIA believes the Proposed Decision would have compromised the reliability of California’s electricity delivery system, increased costs and cut jobs
  • Roth analysts see this delay as a meaningful positive for US residential solar companies

The California Public Utilities Commission (CPUC) has decided to delay taking a decision on its proposed net metering changes, also referred to as NEM 3.0, for an unidentified period as its President Alice Reynolds said she needs more time to review and consider the revisions.

Ever since the commission introduced the Proposed Decision on the subject in December 2021, there was a widespread protest from the solar industry as these would have made solar and storage expensive for residential customers to invest in. The commission had proposed to bring down the payment charges for excess solar power fed into the grid by this segment, by as much as 80%.

Analysts at Wood Mackenzie recently calculated demand for Californian residential solar to come down in half by 2024 if the new rules were implemented (see California’s NEM 3.0 To Shrink Residential Solar).

Roth Capital Partners’ Philip Shen sees this decision as a ‘meaningful positive’ for PV companies active in California’s residential solar market.

The Vice President of State and Regulatory Affairs at the Solar Energy Industries Association (SEIA), Sean Gallagher welcomed the delay saying it didn’t make sense as it is.

He explained, “It would have compromised the reliability of California’s electricity delivery system, harmed California’s effort to tackle climate change and cut jobs and economic opportunities for all Californians. The increased costs and loss of demand for solar also would have made solar less accessible to moderate- and low-income families.”

However, for the solar industry the fight is far from over or so, thinks the California Solar & Storage Association (Calssa). In a statement issued, it warned against taking the ‘unusual announcement’ for victory. “The notice states that ‘additional analysis’ is being conducted. In our view they already have what they need to make the right decision, so additional analysis may have more to do with new ways to make the solar market difficult than ensuring changes do not go too far,” stated Calssa.

Roth’ Shen too cautions, “Our checks suggest the NEM process should not be delayed indefinitely, and the CPUC will probably pick it back up ‘in March or April’. The timing of the to-be-rescheduled oral arguments may serve as a clue for what to expect ahead.”

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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