A California appeals court this week sided with state utility regulators in a case seen as crucial to the spread of solar panels on the rooftops of California homes.<\/p>\n
Three appeals court judges ruled that the California Public Utilities Commission was justified in reducing the rate that customers are paid by their utility companies for extra electricity they produce.<\/p>\n
Environmental advocates who brought the case say the decision will exacerbate California\u2019s energy affordability crisis. Regulators believe it vindicates a decision they made \u201cto ensure that rooftop solar programs remain fair, sustainable, and aligned with California\u2019s clean energy goals,\u201d CPUC spokesperson Terrie Prosper said Tuesday. <\/p>\n
The case centered on the state\u2019s \u201cnet energy metering\u201d program, which governs how much solar customers are paid for excess power from their panels. Earlier versions of the program guaranteed customers the retail rate, which is how much utilities charge other customers when they resell the energy.<\/p>\n
But a 2022 commission decision reduced this payment by about 75%. The commission\u2019s decision backed the utilities\u2019 position, which was that those who have rooftop panels don\u2019t pay their fair share of costs for maintaining the grid, which shifts expenses disproportionately to non-solar customers. The decision resulted in a significant drop in new customers signing up for rooftop solar.<\/p>\n
Advocacy groups including Environmental Working Group, the Center for Biological Diversity and the Protect our Communities Foundation sued over the decision. They argued that commissioners didn\u2019t properly take into consideration the benefits to disadvantaged communities and customers of having local energy generation.<\/p>\n
The case reached an appeals court, which applied a legal standard that granted commissioners significant deference. The Supreme Court of California then unanimously ruled last August<\/a> that the lower court should not have applied this standard and must delve more deeply into the substance of the arguments. Now the lower court has done that.<\/p>\n Roger Lin, senior attorney at the Center for Biological Diversity, said this week\u2019s decision is \u201cdisappointing\u201d and the groups are \u201cevaluating all of our options.\u201d They can appeal again to the state Supreme Court.<\/p>\n \u201cThe whole reason the utilities created the \u2018cost shift\u2019 narrative was to preserve their profits,\u201d Lin said. Under state law, utilities can earn a rate of return on everything they build, which amounts to hundreds of millions of dollars from ratepayers every year. They can\u2019t earn that return on customers\u2019 rooftop solar.<\/p>\n The decision comes amid renewed attention on California\u2019s energy affordability crisis. Golden State residents pay the second highest rates in the country for energy after Hawaii, according to the U.S. Energy Information Administration.<\/p>\n