California Community Solar Update: What the Final Decision Means for Ratepayers and Businesses

Community solar programs are vital to the solar industry’s future, as they allow subscribers to enjoy the benefits of renewable energy without installing solar arrays on their property. Businesses that choose to host or sponsor community solar projects can unlock considerable benefits too.

Unfortunately, the California Public Utilities Commission (CPUC) has dealt a serious blow to community solar in the Golden State after revising and approving a Proposed Decision (PD) that aligns with the interests of utilities instead of the solar industry. Here’s what you need to know about the final decision, how it will affect community solar in California, and how PowerFlex can help you navigate it.

What Was the CPUC’s Proposed Decision?

On March 4, the California Public Utilities Commission issued a Proposed Decision that ignored the needs of the solar industry and questioned the very legality of community solar in the state. In summary, the PD:

  • Favored a community solar program based on existing wholesale-market distributed energy programs, ignoring evidence that these programs have historically failed
  • Rejected the Net Value Billing Tariff (NVBT), which would have generated 8 gigawatts of community solar combined with battery energy storage and provided clean energy benefits to hundreds of thousands of households
  • Claimed the NVBT was in violation of federal law even though community solar has been embraced by 22 states and the District of Columbia and benefits from federal programs and policies
  • Contradicted established California state law that mandated the CPUC to evaluate existing solar programs and, if necessary, take steps to create a new community solar program to benefit all Californians

The Proposed Decision was met with opposition from the solar industry, PowerFlex, state representatives and senators, and even former Federal Energy Regulatory Commission Chairs Norman Bay, Neil Chatterjee, and Jon Wellinghoff who all pushed back against the legal claims made in the PD.  

CPUC’s Final Decision and Its Effects

The outcry over the Proposed Decision led the CPUC to release a Revised Proposed Decision on May 28 that removed all assertions that the Net Value Billing Tariff violates federal law. Unfortunately, the Revised PD still rejected the NVBT and moved to continue community solar programs in California based on wholesale compensation despite receiving feedback from the industry that this compensation is too low to support a viable community solar program.  

On May 30, the CPUC voted to approve the Revised PD in a rare 3-1 split vote. CPUC Commissioner Darcie Houck opposed the final decision and voiced her concerns that the proposal will fail to provide a robust, scalable community solar and storage program and may ultimately prove costly to customers.

“The reliance on funding that may or may not be available in the future puts the program either at risk of failing or potentially having to have ratepayers cover the full cost of the program going forward,” Commissioner Houck said.  

PowerFlex echoes Commissioner Houck’s concerns and believes the CPUC’s decision fails to create a commercially viable community solar program. Many low-income Californians are now at risk of not benefiting from the financial and environmental benefits of renewable energy, and California is at risk of not meeting its climate goals.

While we are disappointed by the CPUC’s flawed decision, the policy experts here at PowerFlex will continue to fight for equitable, clean energy and keep you updated on community solar policy in California as it develops.  

PowerFlex Can Still Help Your California Business Go Solar

Community solar is thriving in other markets throughout the country. If your business has holdings across state lines, PowerFlex can help you explore community solar programs on a national level. If not, there are still plenty of other onsite and offsite solar options in California that PowerFlex can help you leverage to slash your energy costs, reduce your carbon emissions, and achieve your sustainability goals. Ready to start planning your solar energy project? Contact us now.