In summary

The Public Utilities Commission should reject punitive customer fees and changes to net metering rules for rooftop solar power.

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By Sam Liccardo, Special to CalMatters

Sam Liccardo is the mayor of San Jose.

Most regulatory battles before the California Public Utilities Commission capture scant attention, yet one imminent decision carries big stakes: revisions to “Net Energy Metering” rules making rooftop solar less affordable for Californians.

It pits competing visions for California’s energy future: continued dependence on a centralized grid operated by large investor-owned utilities like Pacific Gas & Electric against accelerated investment in networks of locally distributed electricity generation and storage on millions of rooftops and garages.

Which vision we embrace – and which net metering rules the Public Utilities Commission adopts –  has stark implications for our pocketbooks and our planet.

Net metering has spurred production of carbon-free electricity from 1.3 million California rooftops by crediting customers’ utility bills for the excess electricity they supply to the grid. Private utilities now urge sharp reductions of those customer credits, as much as 75% below the retail price that utilities charge for the same electricity. 

The utilities also seek to impose additional fees on California solar customers – fees that vastly exceed any other state’s. These changes would turn back the clock to the time when only the very wealthy could afford solar. They undermine community investment in the coupling of distributed rooftop solar with batteries that can make our communities more resilient to blackouts and other grid failures. 

They have California backsliding on climate progress, just as the California Energy Commission urges tripling rooftop solar deployment. That’s why several other large-city mayors have joined 600 community organizations urging the Public Utilities Commission to reject punitive customer fees and net metering changes in favor of a more climate-friendly, resilient approach. 

Big, investor-owned utilities have much at stake, starting with the receipt of billions in new proposed monthly fees, exceeding $100 per solar customer.  Distributed electricity generation and storage threaten the big utilities’ business model: although they earn returns when investing ratepayer dollars in their own grid infrastructure, they earn nothing from ratepayers’ own investments in solar and batteries.

To be fair, as some advocates assert, California’s solar customers tend to be disproportionately wealthy. Yet these proposed fees will merely erect taller financial gates to circumscribe a smaller, more exclusive “solar club.” A better approach broadens access of our low-income neighbors to distributed solar and storage solutions, by doubling down on the California Solar Initiative’s multifamily housing and low-income programs, which have demonstrably expanded solar adoption in the last decade for nearly 180,000 low-income ratepayers.

Those programs – and the decline of installation costs by 70% over the past decade – have enabled solar’s democratization. Today, one out of every two new solar installations in California lands on the roof of a low- or middle-income family.

The credit that solar customers earn for the clean electricity they provide comes at a bargain compared with the public price of salvaging a centralized grid from decades of neglect. PG&E, for example, announced an ambitious plan to spend $30 billion to bury almost 10% of its transmission lines underground – with ratepayers footing 100% of the bill.  

Don’t expect putting transmission lines underground to provide immediate relief from wildfires and smoke-poisoned air, though: at its recent rate, PG&E will complete the endeavor in about 143 years. In contrast, a strategy focused on growing distributed energy generation and storage could dramatically improve local communities’ resilience despite a faltering grid, while saving every California ratepayer $295 annually – as much as $120 billion over 30 years.  

We have reached a crossroads for California’s energy future. Punitive fees and net metering backsliding undermine the very solar investments that made California a global leader in clean energy access. Fighting climate change requires all of us to make a difference – not merely those who can afford it.


Sam Liccardo has also written about fighting antisemitism and electricity rate increases.

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