Prince James Story |
Reforming the state’s Solar Panel subsidy and the Net Energy Metering (NEM) program was the main topic of discussion during the State Senate Energy, Utilities and Communications Committee hearing and meeting on Aug. 3.
California’s NEM Program was passed in 1996 to incentivize California homeowners to buy solar panels and other renewable energy sources.
Through the years, NEM has been adjusted and reformed to make this program more equitable, and in January 2016, California passed NEM 2.0.
The program worked as planned because it led to California leading the way in renewable energy in households across the country.
In 2019, however, discussions began to find more inclusive subsidies to remedy the hike in electric bills affecting low-income communities.
Part of the problem is that households with solar power energy panels do not pay their fair share for using the grid and public policy programs that support low-income residents in California.
“The NEM subsidy benefits 1.1 million customers compared to the 2.8 million low-income customers that receive CARE assistance. That $3.4 billion annual NEM subsidy will continue to increase each year as more customers install solar and fewer and fewer customers are paying to maintain the grid and to fund state-mandated public policy programs such as energy efficiency and CARE,” According to an Affordable Clean Energy For All report.
“Our coalition absolutely supports rooftop solar,” Kathy Fairbanks, spokeswoman for the nonprofit Affordable Clean Energy for All, said. “We’d like to see a reform of NEM, the Net Energy Metering program in California, so that everyone, solar homeowners and non-solar, are paying their fair share for all these shared costs.”
The state’s subsidy program has increased electric bills for California residents who can’t afford solar panels.
According to Affordable Clean Energy For All (ACEFA), the price of solar panels has dropped over 70% in the last 20 years since the NEM program was established, but the subsidies they receive continue to rise.
They estimate that customers pay an average of $240 more in electric bills annually than those with solar panels. By 2030, they will pay $540 annually for their electric bills.
Mark Toney, Executive Director of The Utility Reform Network (TURN), shares the same sentiment as the Affordable Clean Energy For All organization.
“What would lower the bills for low-income families, who don’t have solar panels is to reduce the subsidy amount for people who do have solar panels,” Toney said. “Require people who have solar panels to pay their fair share for operating the grid, their fair share for low-income programs, their fair share for wildfire safety, their fair share for just the cost of providing electricity to them at night.”
Toney also discussed finding ways to incentivize people to invest in battery storage.
There is a new recyclable battery made of lithium iron phosphate, and it lasts longer than previous batteries and is cleaner and safer.
AB 2316, passed by the California State Assembly on May 25th, prioritized the idea of community solar panels and battery storage in low-income communities.
“We are fighting to make sure that all the energy policies, whether it’s about solar, whether it’s about subsidies to help low-income families that all programs, we need to make sure that communities of color are included, that we do a racial impact analysis that asks, how do these programs impact Black communities, Latino communities, Native American communities, Asian communities so that it’s clear that the programs promote racial equity,” Toney said.
“If you don’t think about racial equity, in addition to economic equity, most programs will increase inequity and make things more inequitable.”