After months of debate, the California Public Utilities Commission (CPUC) is on the brink of issuing yet another version of NEM 3.0, its rules governing net metering for residential solar installations. Despite all the public comments and rallies, one group of Californians has been largely overlooked: the millions of renters who stand to pay the price if the CPUC’s rules stifle the growth of rooftop solar.
The premise of net metering is simple. Customers who generate excess power from their rooftop solar systems are compensated for delivering that electricity to the grid for their neighbors to use. This policy benefits residents, schools, and businesses, by allowing them to save money on utility bills. And it helps the electric grid by making local power available to meet growing energy needs.
Our state’s investor-owned utility providers have been attempting to cut payments granted to solar customers for the excess power they generate and impose new monthly fees. Some analysts predicted that the last NEM 3.0 proposal would cut California’s solar market in half by 2024. Most of the debate has centered on this aspect of the CPUC proposal.
While most associate NEM with traditional homeowners, tenants have also been able to reap the benefits through Virtual Net Energy Metering (VNEM) programs. These programs allow property owners to craft agreements with tenants to share the credits for energy sold back to the grid. Any abrupt changes to NEM would prove devastating to this.
For low-income multifamily properties that participate in solar incentive programs like the Solar on Multifamily Affordable Housing (SOMAH) and Multifamily Affordable Solar Housing (MASH), changing the rules for homeowners today could open the door to similar changes to existing VNEM rules within the next few years.
Affordable housing projects that do not qualify for the SOMAH or MASH programs will see new monthly fees and cuts to the rates they receive for excess power right away. This would effectively shut down all solar development on apartment buildings that are not federally subsidized.
Plain and simple, net metering provides a shield against high utility costs for renters, who, as a group, tend to earn less than homeowners. Increasing utility costs for tenants would be a challenge for families already struggling with rent prices that have reached unparalleled heights. Out of the 25 most expensive US rental markets for a single-bedroom apartment, nine of them can be found in California.
In this way, the NEM 3.0 proposal exacerbates the precarious situation in which many renters are already finding themselves. No renter should have to choose between paying rent and their utility bill. Net metering is a little-known but impactful way to put tenants on the best path to financial success.
Sadly, energy costs are likely to rise. The latest turmoil overseas and record inflation will trickle down to low-income and minority renters in the form of increased electricity costs, forcing them to pay more to power their homes. Regulators should not seek to make energy bills higher for tenants in units with rooftop solar.
In Florida, Republican governor Ron DeSantis recently vetoed a similar proposal because it would have driven up energy bills. Why should our state make the mistake? Utility commissioners must ensure that the benefits of net metering are preserved for renters and help families all over California make the transition to renewable energy.
Our state has reached a crossroads. California should stand with the millions of its tenants who would benefit from increased access to clean, affordable power sources. Gutting net metering is bad for our state — and even worse for its 17 million renters.
Bobbi Lopez is policy director at Build Affordable Faster California, a campaign that fights for and with the poor, disadvantaged, and working people of the Golden State to win affordable housing and build a strong safety net that supports the well-being of all Californians.