AB 58 Background

Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric have long opposed "net metering," which allows a solar PV system to send excess electricity onto the grid. In essence, the utility grid serves as a giant battery, and allows other utility customers to share locally generated, clean, renewable power.

During the height of the energy crisis in 2001, Governor Davis and the California Legislature extended net metering to large-scale solar customer/generators. Less than a year later, with blackouts still looming and electric power still in short supply, the utilities wanted to kill this law.

Private utilities argued that the majority of customers who are not solar generators incur higher costs that underwrite solar PV systems taking advantage of net metering. However, according to figures provided by the utilities to the California Legislature, the costs are less than one penny per customer per month. What do Californians who contribute this penny get in return? Clean electricity generated within California that reduces the state's dependence on expensive, often volatile power supplies purchased from out-of-state wholesalers such as Enron.

Ninety percent of new power plants in California and the rest of the US are slated to burn natural gas fuel. Due to fallout from Enron and the current soft economy, half of these power plants have been cancelled. Net metering enables Californias to invest in the future by supporting a technology that relies on a nearly limitless resource - California's famous sunshine - that is abundant and free.

About AB 58 - the "Net Metering" Bill

AB 58 was introduced to extend net metering benefits for PV systems over 10 kW in size. California led the nation in passing a "net metering" law in 1995. Thirty-six other states have since followed our state lead on this issue, allowing customers to establish a two-way relationship with their utilities by also becoming independent power producers.

Under the current simple system, the "customer/generater" gets credited for electricity put back on the grid at the same retail rate utilities would otherwise collect from the customer. AB 58 extends net metering indefinitely for solar generators above 10kW.

Why this bill was so critical

• Net Metering is essential for the financial viability of any solar PV generating system that is connected to the electric utility grid. It assures fair practices and compensation for those who wish to generate their own electricity and interconnect to the grid.
• Without AB 58, net metering provisions would have reverted to only being available for residential and small commercial customers under 10kW. PV installations over 10kW in generating capacity currently represent the most financially feasible and fastest-growing sector of the solar industry. Tampering with net metering for these systems would have crippled the solar industry in the state of California and the rest of the nation.
• If AB 58 had not become law, utilities would have been allowed to charge discriminatory fees for utility customers installing new solar PV systems and impose system enrollment limits that would have eliminated the program for new customers within a few years.
• Without AB 58, territorial caps of the original net metering bill would have stayed in effect. Since these caps were close to being met in many utility areas, net metering would have effectively ended for residential and small commercial customers as well.
• Without this Net Metering bill there would be no Solar on Schools programs. The Attorney General allocated funds for a new PV for Schools program that would have gone unspent if AB 58 is not passed. Schools fall into the commercial category (regardless of PV system size) that will sunset at year's end.
• California is the #3 solar market in the world, behind Japan and Germany. The rest of the nation is watching to see if California will adopt and maintain a consistent policy from which to develop the incredible potential of photovoltaics. Based on the California experience, the rest of the nation will follow. Net metering keeps us going forward, not backward.

Facts

• Net metering is already in place and it works. The number of large scale PV systems for local government, schools and businesses have increased ten-fold since this law was signed last year. This is an outstanding success and California needs to continue the program.
• Net metering is the simplest means of accounting for customer-generated electricity because it uses the existing meter and simply spins it backward. It's easy for the customer to understand, easy for the utility to administer, easy for the state to enforce, and easy for the PV industry to include as part of the benefits calculation to the customer.
• California energy crisis is NOT over - not long ago California experienced another Stage Two power emergency. Electricity is still in short supply, especially during afternoon peak periods. PV systems generate maximum output during these peak periods, which is why CCEnergy is working to encourage more people to install them.
• The soft economy and fraudulent business practices by many of the leading energy providers has meant that almost 50% of new power plants planned for California have been cancelled or delayed over the last two months. Although legislation was also passed to address this, customer-financed, distributed generation such as PV installations will help relieve some of the demand on the power grid.
• Net metering does not adversely impact the State of California's General Fund. In fact, since PV helps reduce electricity purchases on peak, and the State of California still purchases power on peak, net metering saves the state money by reducing the need to make high-priced spot market purchases which are paid for by taxpayers.
• Three new PV manufacturers have recently moved their headquarters to California, attracted by the state's PV-friendly policies: buydown rebates, the solar tax credit, and net metering.
• Consumer polls consistently show high levels of support (80-90% approval) for solar and other renewable energy technologies and policies. Only the investor-owned utilities opposed net metering legislation.
• The rest of the country and the rest of the world is watching California. In signing AB58 into law, the state is living up to its leadership role by supporting PV and continuing renewable energy policies that work.