Recently-amended energy bill, AB 327, awaits signature from Governor Brown
Just a couple of months ago, California Assembly Bill 327 was met with fierce criticism from solar advocates throughout California.
It was this rallying cry of opposition, however, that ultimately resulted in key revisions to this bill, making it a step in the right direction for rooftop solar.
The amendments made to AB 327 are a testament to the growing power of the solar industry and allies of renewable energy in California.
Investor-Owned Utilities vs. The Solar Industry?
To give you a little background, California’s investor-owned utilities (IOUs) have been at odds with the solar industry over net metering, which allows residents to receive financial compensation for the excess power generated by their grid-tied solar systems.
When the consumer gets paid for the electricity that’s sent back into the utility grid, it means a greater return on their investment. Net-metering is a monetary incentive for homeowners to get solar on their roofs. Since state policies like this make “going solar” more attractive to a potential solar customers, the solar industry has been fighting to keep it around. Being required to pay residential customers for this electricity isn’t really in the best interest of an Investor-Owned Utility (IOU), which has a responsibility to their share-holders to maximize profit.
The main criticism of this bill is that it would make net-metering a less attractive to consumers, thus deincentivizing solar.
The two main issues solar advocates were criticizing:
1. AB 327 was going to flatten the rates for customers paying for electricity in the higher tiers on their electric bills. This means that customers who consume significantly higher amounts of energy (kWh) would be paying less than they currently do.
2. AB 327 would also allow utilities to impose a flat rate of up to $10 per month on residential customers, regardless of their net consumption.
By decreasing the cost for excessive energy consumption, AB 327 would have made investing in a PV system attractive to potential solar customers paying these high-tier rates.
AB 327 would mean that a residential customer, whose net consumption is minimal due to a solar system, could have to pay the utility company a flat rate every month. This could amount to an extra $120 annually, regardless of how much solar power the system was actually generating.
Needless to say, this bill was originally met with harsh criticism from solar advocates across California. Meanwhile, utility companies argued that residential solar customers need to help finance the maintenance of grid infrastructure from which they benefit like everyone else.
Rewind several months. The investor-owned utility companies were under fire for backing this hotly contested bill. A satirical ad campaign featured an actor pretending to be a representative from one of these utilities, explaining why they hate rooftop solar. The video ran into a bit of legal trouble for allegedly misusing the utility’s logo.
Long story short, AB 327 has seen some recent revisions that have considerably changed the kind of impact it will have on rooftop solar in California.
After these amendments, what does AB 327 do?
The California Senate ended up including amendments that address several of the objections presented by solar advocates. At this time, AB 327 has the support of the Solar Energy Industries Association (SEIA), The Alliance for Solar Choice (TASC), and VoteSolar.org.
So then, how did these amendments turn starch opponents of AB 327 into proponents of the bill?
What does AB 327 do now?
- Preserves net metering
- California Public Utilities Commission (CPUC) has the power to remove the cap on net metering