The CPUC voted to advance a community solar program that solar industry members are calling “unworkable.” The Solar Energy Industries Association (SEIA) says “virtually ensures” that no new community solar projects will be developed in the state under current structure.
Rather than creating a viable path for new, independent projects, the commission chose to implement portions of its community solar program using an existing, utility-controlled pricing structure. According to solar industry advocates and the advocacy group Californians for Local, Affordable Solar and Storage (CLASS), the regulatory decision essentially hands the keys back to the state’s investor-owned utility monopolies, the same utilities that have spent years working to ensure community solar never gets built.
The CPUC’s decision relies on the existing Renewable Market Adjusting Tariff (ReMAT) pricing structure to determine grid export compensation rates, rejecting the solar industry-backed Net Value Billing Tariff model. SEIA and other industry advocates argue the rate structure makes building community solar a losing proposition for any business, ensuring projects won’t be built.
In most U.S. community solar programs, subscribers, including homeowners and businesses, pay a discounted monthly fee for a share of a remote solar farm’s energy and receive larger credits on their standard utility bill for the electricity that share produces, typically resulting in a net savings of 5% to 20%. However, in California’s approved program, the rate paid by utilities to solar developers is too low, which stifles the creation of projects and ultimately leaves subscribers with nothing to sign up for
Commission officials, including CPUC President John Reynolds, stated the move ensures the program grows responsibly by balancing affordability, equity, and grid reliability so non-participating customers do not pay more than the avoided wholesale cost of the generated electricity. However, clean energy groups argue the baseline wholesale metrics are far too low, destroying the predictable market economics needed to secure private capital and make new project construction viable for developers.
The approved framework also relies on one-time federal funding, specifically the $250 million federal Solar for All grant money awarded to California. Advocates state that by packaging this federal money into an utility-led model rather than a scalable market-based program, the CPUC is effectively forfeiting the funding’s potential and dooming future deployment.
“Today’s vote is a doubling down on failure,” said Derek Chernow, Executive Director of CLASS. “In the midst of an affordability crisis and rising utility rates, the CPUC has once again handed the keys to the utilities and called it a program. California ratepayers are drowning in electricity bills. The Legislature passed AB 2316 four years ago with clear direction to deliver a workable community solar and storage program. Instead, the CPUC produced a program that got zero projects built, forfeited $250 million in federal Solar for All funding, and is now being voted through again in essentially the same packaging.”
The regulatory gridlock leaves California ratepayers completely cut off from bill relief during a period of record-high energy prices. While families, renters, and small businesses across the Central Valley continue to face soaring electricity costs, more than 20 other states have successfully deployed market-based community solar programs that actively save consumers money.
With the CPUC maintaining its focus on utility-backed positions to avoid cost-shifting to non-participating customers, solar advocates argue the regulatory route through the commission is officially a dead end.
Clean energy advocates are redirecting their efforts to the state legislature, pushing for the immediate passage of AB 1813 in the Senate to bypass the CPUC’s framework entirely and establish a functional, financeable community solar program by law.
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