California Proposes Repealing Regulations to Boost Rooftop Solar Energy
In a bid to revive California’s rooftop solar industry, Assemblyman Damon Connolly has introduced Assembly Bill 2619. The bill aims to repeal changes made in April 2023 that significantly reduced incentives for solar customers and led to a dramatic decrease in demand.
The changes, known as NEM 3.0, were implemented by the California Public Utility Commission and reduced the reimbursements utility companies must provide to solar customers for the excess energy they generate. These changes resulted in a decrease of incentives by approximately 75 percent, leading to a sharp decline in demand for rooftop solar installations.
Assemblyman Connolly argues that NEM 3.0 has disincentivized the adoption of clean energy. He believes that AB 2619 will restore California’s commitment to a sustainable and clean energy future while providing relief to Californians who have been negatively affected by these new rules.
The impact of NEM 3.0 has been significant, with rooftop solar sales declining by up to 83 percent after the regulations were amended. Experts also note that the return on investment for installing solar panels and battery storage has increased from under 10 years to 15 years or more, depending on system size and utility company.
The repercussions of these changes have been felt across the state, leading to layoffs within the industry. According to a survey conducted by the California Solar and Storage Association, over 17,000 workers were let go after NEM 3.0 took effect. Some businesses are now on the brink of bankruptcy, including solar panel manufacturing firm Solarever USA.
A report by Wood Mackenzie, a global analytics firm, had predicted the adverse effects of NEM 3.0 regulations. The report highlighted that these regulations would create a challenging business environment and result in significant consolidation within the contracting California residential solar market.
Homeowners who had installed solar panels in recent years also felt the impact of NEM 3.0 on their finances. Many reported being paid significantly less for the excess power they fed back to the grid.
Assembly Bill 2619 seeks to bring relief to businesses and consumers affected by NEM 3.0. The bill is now awaiting assignment by the Assembly Rules Committee to respective policy committees for review in the coming weeks.
If AB 2619 is successfully passed, it could help revive California’s rooftop solar industry and incentivize clean energy adoption once again. The repeal of NEM 3.0 would provide relief to homeowners, businesses, and workers in the solar industry, ensuring a more sustainable and prosperous future for Californians.
