California Assemblymember Damon Connolly (D-San Rafael) has introduced new legislation to reduce fees and taxes on residential solar projects and restore incentives to Californians that were recently diminished by the California Public Utilities Commission (CPUC)’s NEM 3.0 decision.
NEM 3.0 cut the incentives that utilities were required to pay solar homeowners when pushing surplus power to the grid by approximately 75%, plummeting demand for solar adoption throughout the state and threatening many solar installation businesses. In addition to the projected loss of 17,000 jobs, NEM 3.0 has also jeopardized California’s ability to meet its ambitious clean energy goals.
Assembly Bill (AB) 2619 will repeal the NEM 3.0 decision and require the CPUC to create a new rule structure based on the clean energy goals set by Senate Bill (SB) 100, which committed the state to achieving 100% clean carbon-free energy by 2045. AB 2619 will ensure that incentives are restored for residents who generate clean power for the grid and restrict the imposition of new charges, taxes, fees or rates on community solar customers that are different from what is assessed on all other ratepayers for electricity or any other service including energy transmission.
“When talking with North Bay residents and Californians throughout the state, it’s clear that additional taxes on solar and the removal of incentives that have helped offset the cost of solar installation has had severe consequences on our ability to generate clean energy,” said Assemblymember Connolly. “The NEM 3.0 decision has clearly disincentivized clean energy adoption with rooftop solar sales down between 66 to 83% and thousands of workers left without good-paying jobs. AB 2619 will restore our commitment to a sustainable, clean energy future and provide relief to Californians who are suffering under these new rules. We must commit to our goal of achieving 100% carbon-free energy by 2045.”
NEM 3.0 went into effect in April 2023. An analysis conducted by Wood Mackenzie estimates that the residential solar market in California will be cut in half by this year and payback periods for typical residential solar projects will increase from five to six years to 14 to 15 years, depending on the utility company. Additionally, according to a survey by the California Solar and Storage Association, these decisions have reduced rooftop solar sales between 66 and 83% compared to the same time in 2022. Additionally, nearly 43% of solar companies surveyed in California said it would be difficult to stay in business over the winter.
AB 2619 now awaits assignment to a policy committee in the State Assembly.
News item from Assemblymember Connolly