California governor orders schools and farms not allowed to use their own solar energy production

Gavin Newson opposed a bill that would restore a level playing field for schools, farms and apartment buildings to switch to solar energy

October 2, 2024 Ryan Kennedy

From pv magazine USA

California Governor Gavin Newsom has once again ruled against and rejected a ruling in favor of the three largest investor-owned electric utilities and against consumers who support solar energy in his state Senate Bill 1374. The bill sought to repeal regulations that make it economically difficult for schools and farms to install solar panels.

In recent years, California has gone from being at the forefront of the U.S. rooftop solar market to a state that has some of the most aggressively anti-consumer and investor-friendly regulations for utilities in the country.

California has made numerous cuts to solar incentives and programs in its state, including Discounts in assessment and crediting of exported solar power generation, cuts in the resulting Community solar Program and impressive a monthly fixed price This negates the savings potential of solar roofs. According to the California Solar and Storage Association (CALSSA), numerous installers statewide went bankrupt and over 17,000 solar jobs were lost as a result of these actions.

Solar energy can help schools free up budget for learning-related expenses, but current market conditions in California have eliminated that opportunity. Image: Wikimedia Commons

“California should be in the golden age of solar energy, but our state’s regulators – backed by powerful utilities that fear competition from solar energy – intend to halt California’s progress in clean energy,” said Bernadette Del Chiaro, executive director of CALSSA.

Now Newsom has met and rejected the demands of Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric Senate Bill 1374a bill sponsored by Senator Josh Becker.

“This bill is simply a matter of fairness. Customers with multiple meters should receive the same treatment as everyone else – they don't have to sell their electricity to the utility at low prices and immediately buy it back at much higher retail prices,” Becker said.

Senate Bill 1374 was intended to reverse a Judgment from August 2023 It was discovered that properties with multiple electricity meters, such as schools, farms and apartment buildings, cannot use the electricity generated by their solar system. Even if these companies own the entire system, they are forced to sell electricity to the grid at a low price and then buy it back at a much higher price.

The billing structure means that schools, farmers and apartment buildings that pay at the highest electricity rates in the world are essentially unable to benefit from their investments. They must sell the electricity generated on their roof to the grid at a wholesale price and then buy it back at a retail price many times higher than what they paid for it. This is the market condition that Gavin Newsom voted to preserve, despite lawmakers' strong support for restoring a fairer market.

“Public schools have a general fund where everything comes from: teacher salaries, textbooks, mental health counselors, utility bills — everything comes from the same pot,” said Sam Davis, Oakland Unified School District board president. “In recent years, we have used solar energy to offset these rising costs and invest the savings in programs to improve educational equity. Restoring and protecting these incentives is critical to ensuring all students receive the education they need to succeed.”

Additionally, in some areas, local zoning laws and permitting requirements may make it difficult, if not impossible, for ratepayers to disconnect from the utility and completely disconnect from the power grid. Customers are essentially tied to the electricity suppliers’ “Sell-Low-Buy-High” system.

Although California has historically been a leader in rooftop solar, advocates say there is still work to be done and call Newsom's opposition “short-sighted.” California has currently benefited from this 10% of the technical solar potential on the roof.

Utilities justify cuts to rooftop solar programs by arguing that non-solar customers are subsidizing those with solar power. The utilities said the bill “will likely result in grid expansions, resulting in high costs for all, but to the benefit of only a few customers.” However, analysis The California Public Utilities Commission (CPUC) has found that non-residential solar programs have not shifted costs.

“We are disappointed by Governor Newsom's decision to put the brakes on this popular, proven clean energy resource, especially when cuts to solar incentive programs over the past two years have made the future of rooftop solar in California so uncertain,” said Steven King, Environment California.

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