California is the leader in clean energy in the United States, thanks to the widespread adoption of solar power by 1.5 million residents and businesses across the state. Over the past five years, half of all California-built solar customers have converted homes, churches, schools, apartments and businesses into mini-generators to power themselves and their communities.
It is impressive to see that these small-scale systems are equivalent to six nuclear power plants, saving us nuclear waste and fossil fuel pollution. That progress is threatened, however, by a proposal pending before the California Public Utilities Commission to overhaul a popular and effective program called net metering, a payment process that gives solar homeowners credit for the electricity they add to the grid.
Under pressure from investor-owned utilities, the CPUC proposes to reduce the cost of solar power delivered to the grid by 75-80% on sunny days. If passed, it would be the fastest drop in US solar prices since Nevada's disastrous 2015 decision, which was later reversed by its legislature. These cuts will take effect almost immediately and will put solar beyond the reach of most consumers, while slowing the growth of rechargeable solar panels.
In its proposal, the CPUC sought to make it easier to pass on lower costs to customers who sell excess solar power to the grid. Regardless, rooftop solar costs will be reduced by an average of 75%. California's rooftop solar market, the crown jewel of the clean energy market, will close.
We believe the CPUC's latest proposal is a significant improvement over the original December 2021 proposal. The 2021 proposal would impose a penalty tax on rooftop solar users and retroactively reduce benefits for Californians who have already installed solar. However, the mere absence of these provisions does not equal good policy.
California needs much more clean energy if we are to meet our planet's clean energy goals. The California Air Resources Board, one of the world's most influential climate organizations, recently reminded us how we need to accelerate our clean energy action. The updated Climate Action Plan shows that local solar needs to triple by 2045 to meet California's climate goals.
This is one example of why we as members of Congress worked hard to pass the Inflation Relief Act, which increased the solar consumer tax credit from 26% to 30% over 10 years. Our mission was to accelerate the adoption of battery-backed solar power and help customers save on their monthly utility bills. Multiple independent analyzes have found that the incentives in the IRA will reduce greenhouse gas emissions by about 40% below 2005 levels by 2030, but these analyzes assume a continuation of supportive government policies. By making solar more expensive overnight, California would eliminate the value of expanded tax credits, increase costs for Californians, and threaten our nation's ability to meet our emissions reduction goals. It would reverse years of progress by making solar power more affordable for low- and middle-income households.
The good news is that supply can still change, creating a royal road to making batteries functional, accessible and affordable for middle-class consumers. An eight-year transition to gradually reduce the cost of rooftop solar sold to the grid was negotiated to reduce the possibility of a solar market collapse. This seems reasonable, especially given global supply chain constraints and rising costs. States should also consider consumer rebates to encourage greater storage adoption.
Ultimately, California needs to be a leader in clean energy and can't do that without rooftop solar. This proposal, if approved, would not only jeopardize the state's clean energy goals, but would also create chaos for the rest of the United States and the world.
Mike Thompson, D-St. Helena represents the 5th Congressional District. Mike Levin, D-Oceanside, represents the 49th Congressional District.
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