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California Legislature Passes Bill to Raise Solar Net Metering Cap

Advocates Celebrate Major Policy Win in the Country’s Largest PV Market

Sacramento, Calif. – The California State Assembly passed AB 510, a bill to raise the cap on a key solar policy called “net metering.” Net metering is a simple billing arrangement that allows solar customers to get fair retail credit for the excess electricity their systems generate during daytime hours. Having passed the Senate last week, the bill now only needs the Governor’s signature to become law.

Existing law requires California’s major electric utilities to make net metering available to customers on a first-come-first-served basis until the total program capacity exceeds 2.5 percent of the utility’s peak demand. AB 510 doubles the net metering program capacity to 5 percent, ensuring that Californians continue to have fair access to this critical solar program for the near term.

Bill author Assembly member Nancy Skinner (D-Berkeley) said, “California leads the nation in solar energy, accounting for more than 65 percent of the all the solar installed in the U.S. Net metering has been absolutely fundamental to that success. The passage of this bill means continued green job growth, further energy bill savings, progress in the fight against climate change, and a brighter future for California.”

Sara Birmingham, western policy director for the Solar Alliance, a state-level trade association continued, “AB 510 will ensure that participants in the state’s highly successful California Solar Initiative will continue to have access to net metering benefits through the program’s completion. Its passage sends a clear signal to the growing solar industry that California intends to be open for business tomorrow and for years to come. I applaud Assemblywoman Skinner for her leadership in ensuring California’s continued success in the new energy economy.”

Adam Browning, executive director of the Vote Solar Initiative, a national grassroots advocacy organization added, “Net metering makes solar more affordable for those who want to make the investment in clean energy. And because solar produces reliable power during peak hours when we all need it most, that same investment in solar helps lower costs for all ratepayers. Today, Assembly member Skinner and the legislature took a bold step to make solar a significant part of our energy future.”

Through net metering, solar customers’ electricity meters to spin forward when they are using power from the utility grid, and reverse, spinning backward when customers are producing more energy than they are using. The customer is billed only for the net energy used. Today more than 50,000 California homes, schools and businesses take advantage of the state’s net metering program to lower their utility bills.

Net metering has no direct impact on the state’s general fund. In fact, it allows California schools and public agencies to reduce operating costs by investing in solar energy. California public agencies have already installed at least 51 MW of solar, saving taxpayers more than $270 million in avoided utility payments. With federal stimulus funds committed to support the state’s switch to solar, this legislation is a critical component of a fiscally and environmentally responsible energy future in California.

Update (1/2/14)

The passage of CA AB327 removes the NEM capacity cap set at 5% of noncoincident peak demand in each utility territory!  It also charges the CPUC with determining an entirely new compensation structure for customers who install solar after 2017. 



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