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AB 1139: Controversial bill could change solar industry in California

The bill focuses on credits for solar customers
AB 1139
Posted at 6:59 PM, May 26, 2021
and last updated 2021-06-22 21:04:19-04

SAN DIEGO (KGTV) -- A controversial bill is addressing solar energy in California and the credits that current solar customers receive for their systems.

AB 1139 focuses on net energy metering (NEM). That is the process where solar customers get credit at retail rates for excess energy their system produces. If passed, the bill would force the California Public Utilities Commission (CPUC) to act on NEM reform. Energy researchers at UC Berkeley say utility companies recover lost revenue from solar customers by charging those without solar extra costs.

Assemblywoman Lorena Gonzalez, the author of the bill, said that the current system is not fair.

“In San Diego, a non-rooftop solar customer pays $230 a year to subsidize those of us who have rooftop solar,” she said. “We want people to have rooftop solar, but it can't be on the on the backs of people who can't have solar.”

Her bill sets the deadline for the CPUC to come up with changes by Febuary 1, 2022. “If they come up with a rate structure, my bill goes away,” Gonzalez said.

The bill would also lock solar customers in at their current rates for 10 years, rather than the 20 years many existing customers said they were promised.

Clairemont resident Tammy Anderson Lee had solar installed at her home 3 years ago. She said she and her husband, before he passed away, saved money to pay for the system. “The narrative that we're getting here in California is hey everybody, if you put solar on your roof, you're not only helping the environment, but it's going to help reduce your electric bills,” Lee said.

She also recently helped pay for her elderly father’s solar system in his East County home. Lee said if she knew of these proposed changes, she would have not invested in solar.

“California was set to be the leader in the green initiative. This will only kill the strides that we have made. Not only that, the thought of all the jobs that potentially could be lost… it’s just crazy this bill is even alive,” Lee said.

The CPUC has been working for years to reform net metering, something groups like The Utility Reform Network (TURN) say is needed. “The question isn't whether it's a good or a bad idea for people that do solar on the rooftop. It's what's a fair price that all other customers should pay,” said the organization’s attorney, Matthew Freedman.

Freedman said TURN has taken a “support, if amended” position on the bill. He said there is still benefit for people to invest in solar with a roughly 30 percent federal tax credit.

According to a U.S. Department of Energy spokesperson, solar projects "that begin construction in 2021 and 2022 will still be able to receive a tax credit at 26 percent."

That credit drops to 22 percent in 2023. There will be no federal tax credits for residential projects in 2024, but "commercial and utility markets will sit at a percent 10 percent credit beginning in 2024."

Tara Hammond with Hammond Climate Solutions said the answer to solving this issue isn’t punishing those with clean energy.

“I believe that AB 1139 is nothing more than a utility profit grab,” Hammond said. She said several local organizations, including San Diego Coastkeeper and Bike San Diego, are opposed to the current bill.

Hammond said solar customers do pay a roughly $10 monthly fee to SDGE. “The utilities make millions of dollars off of solar customers,” she said. “This bill is pulling the rug on 1.2 million solar customers who are committed to 20 years under net metering.”

Hammond also said that AB 1139 would negatively affect schools with solar.

"The taxpayer money that [has] gone into school solar power systems for the school to realize savings, those savings will not be there. Every dollar spent on utility bills means it’s a dollar not spent on schools, not spent on our kids, and underpaid teachers,” Hammond said.

Gonzalez admits that part will need to be addressed.

“Schools [are] an issue,” Gonzalez said. “We're doing an amendment now to ensure that the schools are taken out of this type of reform.”

Gonzalez responded to criticism from those against the bill that some of her biggest donors are the utility companies.

“I have campaign contributions from solar companies as well [and] I'd say follow the money. A lot of these environmental groups or solar groups are funded by big solar corporations as well,” she said. “In the end of the day, I’ve made it clear. I will take on any corporation that is doing the wrong thing.”

The full assembly will vote on the bill in the coming days.

A spokesperson for SDGE said the company has not taken an official position on the bill. When asked about the accusations that the bill is a “profit grab,” a spokesperson released this statement:

“SDG&E has a long history of supporting and integrating rooftop solar systems to the grid. NEM reform is a statewide issue. Contrary to what some have said, NEM reform will not result in additional revenue for utilities. The NEM reform proposal filed by SDG&E, PG&E and SCE with the California Public Utilities Commission focuses on future solar customers and is an effort to stop the exacerbation of the existing cost shift that is unfairly being shouldered by customers who do not have solar systems on their roof. A change is essential if we are going to focus on achieving rate equity in every neighborhood.”

Gonzalez said she understands solar customers may be frustrated, but believes that 10 years is enough time to pay back a solar investment.

“They are doing something good for the environment, they are going to recoup their costs, and they're still going to have lower electricity bills,” Gonzalez said. “So I think it's a fair solution.”

Editor's note: This article was updated on June 22nd to include current information regarding federal tax credits. A Department of Energy spokesperson confirmed the credit was extended at the end of 2020. Construction in 2021 and 2022 will be able to receive a tax credit starting at 26 percent.