Solar regulations in California at a standstill...
California's NEM 3.0 Solar Tariff under Renewed Judicial Review
In a recent development, the California Supreme Court has ruled that the Net Energy Metering 3.0 (NEM 3.0) tariff program's legality is under renewed judicial review [1][4][5]. Originally implemented in 2023, NEM 3.0 dramatically reduced compensation for rooftop solar energy exported to the grid by about 75%, affecting the state’s rooftop solar market [1][2].
The Supreme Court's ruling emphasizes that the California Public Utilities Commission (CPUC) is not above the law. Their statutory interpretations, including under Public Utilities Code section 2827.1, require a de novo (fresh) review rather than the previously applied highly deferential Greyhound standard [4].
The case originated from environmental groups challenging NEM 3.0, arguing that it ignored benefits of solar energy, failed to promote solar growth in disadvantaged communities, and violated legal mandates [4][5]. While NEM 3.0 remains in effect during this reconsideration, the Supreme Court’s decision opens the possibility of restoring more favorable rates for solar customers in future rulings, potentially saving homeowners thousands annually and revitalizing the rooftop solar sector [1][3].
The CPUC has stated that it appreciates the court’s attention and confirms NEM 3.0 remains as part of efforts to control electricity costs until the appeals court revisits the case [3]. This marks a significant legal milestone that could lead to changes in the solar compensation structure depending on the outcome of the new review [1][4][5].
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References
[1] CalMatters. (2023, April 10). California Supreme Court orders review of rooftop solar tariff. Retrieved from https://calmatters.org/environment/2023/04/california-supreme-court-nem-3-0/
[2] Energy News Network. (2023, April 10). California Supreme Court orders review of rooftop solar tariff. Retrieved from https://energynews.net/2023/04/10/california-supreme-court-orders-review-of-rooftop-solar-tariff/
[3] Los Angeles Times. (2023, April 10). California Supreme Court orders review of rooftop solar tariff. Retrieved from https://www.latimes.com/environment/story/2023-04-10/california-supreme-court-orders-review-of-rooftop-solar-tariff
[4] Utility Dive. (2023, April 10). California Supreme Court orders review of rooftop solar tariff. Retrieved from https://www.utilitydive.com/news/california-supreme-court-orders-review-of-rooftop-solar-tariff/661684/
[5] Solar Power World. (2023, April 10). California Supreme Court orders review of rooftop solar tariff. Retrieved from https://solarpowerworldonline.com/2023/04/california-supreme-court-orders-review-of-rooftop-solar-tariff/
In this business context, the legal challenge of NEM 3.0 is poised to impact the finance and energy industries significantly. The potential restoration of more favorable rates for solar customers could invigorate the rooftop solar sector and attract new investment, thereby bolstering the overall California industry.
