AB 327 (Perea) just passed the Senate on September 9 with a vote of 27 to 6 on the floor. From here, the bill goes to the Assembly for an up or down concurrence vote before going to the governor's desk. The bill can not be changed at this point.
AB 327 is nothing short of a big, historic solar bill that continues to set a high bar. And, thanks to our joint efforts, the bill is stronger than when we first got engaged and, equally important, our coalition is stronger as well.
AB 327 was amended on the 9th to address two of CALSEIA's remaining concerns, namely the protections for existing customers against forced changes to their existing net metering agreements, and protections for future customers from anti-solar taxes and charges.
The bill directs the CPUC to finalize so-called "grandfathering" rules by March 2014 to minimize the uncertainty in our market between now and when the new rules are in place. There was a robust bi-partisan discussion on the Senate Floor about how existing customers should be protected and the governor's office has personally promised that "a deal is a deal" and will be honored at the PUC.
Second, the bill limits the forum for any additional fees or charges above and beyond what non-solar customers face to a proceeding that includes all three utilities. In other words, they can't try to sneak anti-solar charges within rate cases every three years on a utility-by-utility basis.
In the big picture, AB 327 removes the current 2014 cliff on net metering and codifies that another 5,500 MW of customer-sited solar can sign up for "Net Metering 1.0", i.e. full retail net metering, between now and July 2017. It directs the CPUC to create a new net metering program, "NEM 2.0", that is unlimited and that ensures that the customer-sighted solar market continues to grow. It also directs the CPUC to ensure that the new program spur customer-sited solar in disadvantaged communities.
On the flip side, the utilities are getting a lot out of this bill as well. They are getting the rate reforms they've wanted for several years. They are getting the authorization for the PUC to levy up to a $10 fixed charge on all residential customers, solar and non-solar alike. And we had to accept a lot of uncertainty within the actual bill, even as we strove for certainty in our market.
But it is critical that we acknowledge what this bill is: a breath of new life for rooftop solar and a transformative vision of making solar power an unbridled source of energy for our state in the near future.
Certainly, our work is cut out for us going forward. CALSEIA is going to have to unite and work together to ensure that the rules adopted by the CPUC over the next 24 months get the job done.
I want to commend the CALSEIA team, especially our lobbyist Will Gonzalez who opened doors and allowed us to work to not only pass this bill but get it into the strongest form possible.
Of course, AB 327 is a group effort and the companies who put the most into the effort, including SolarCity, SunRun, SunPower and Sullivan Solar, deserve a lot of applause, as does the work of Donne Brownsey on behalf of SEIA.
And, while we didn't get everything we wanted or even needed in this bill, we did end on a high note with a very active and engaged customer-base who we can work with and engage at the PUC.
Thanks again for all your help. Please feel free to call or email if you have any questions. We'll be setting up a time next week to make ourselves available to go through the bill in greater detail and discuss strategies moving forward. Stay tuned for more info.
AB 327 (Perea)
Fact Sheet on California’s Newest New Energy Metering Law - AB 327
Updated October 14, 2013
How would AB 327 impact Net Energy Metering in California?
AB 327 would effectively have three main impacts on California’s NEM program.
First, AB 327 would remove the December 31, 2014 “cliff” on the California NEM program by codifying the 5% Net Energy Metering (NEM) cap with aggregate peak load as defined by the California Public Utilities Commission (CPUC) decision issued March 2012. The 5% cap would be converted into a cumulative capacity limit, instead of a percentage, so that the three investor owned utilities would be required to sign up new NEM customers until the following cumulative installed capacity limits are hit, or July 1, 2017, whichever comes first:
San Diego Gas & Electric: 607 MW
So Cal Edison: 2,240 MW
PG&E: 2,409 MW
Second, AB 327 would direct the CPUC to create an uncapped “NEM 2.0” program after the newly defined cap is hit. The bill would leave details to the CPUC but includes five important mandates:
That the new program continue to grow customer-sited solar “sustainably”.
That disadvantaged communities be included in the program.
That the future program be uncapped and unlimited in terms of both capacity installed and numbers of systems connected to the grid. The 1 MW individual system size limit would also be lifted.
That the total benefits of the program to all customers be approximately equal to costs.
AB 327 would not necessarily extend the same consumer protections from anti-solar taxes and charges that current NEM customers enjoy, but it would require that any such charges be defined by a rule-making proceeding that includes all of the utilities at once, i.e. not via individual rate cases every three years.
Third, AB 327 would direct the CPUC to determine a “transition period” within which all customers who signed up for NEM within the 5% cap are eligible to continue their current NEM contract or tariff. In other words, the bill would direct the CPUC to decide how long the existing 160,000+ NEM customers, plus all those who sign up before “NEM 2.0” kicks-in, can be eligible to receive full retail credit and avoid charges and fees that aren’t levied on non-solar customers. This transition period must be determined by the CPUC by March 31, 2014.
What other elements of AB 327 could have an impact on solar in California?
AB 327 would flatten rates by lowering upper tier rates and raising lower tier rates.
AB 327 would allow CPUC to levy up to $10/month fixed charge on all residential ratepayers, not just solar customers. This charge would be allowed, not mandated, and is a ceiling not a floor. The CPUC would be ordered to consider other alternatives to a fixed charge.
AB 327 would prohibit mandatory or default time-variant (e.g. time of use) pricing for residential customers but it would allow the CPUC to require it starting January 1, 2018.
AB 327 would establish the current 33% by 2020 Renewable Portfolio Standard as a floor, allowing utilities or the CPUC to go beyond 33%.
How does AB 327 impact municipal utilities and community choice aggregators?
All changes to rate and billing design would not impact municipal utilities as they are not regulated by the CPUC. However, the NEM cap and directive to establish a new NEM program would apply to all community choice aggregators as well as municipal utilities with greater than 100,000 customers, with the exception for customers of LADWP who have never come under the state’s NEM laws.
Where is AB 327 right now? What happens next?
AB 327 was signed by Governor Brown on October 7, 2013. In signing the bill, the governor issued a strong signing statement declaring his intention to protect existing NEM customers. AB 327 will become law on January 1, 2014. The CPUC will have 90 days to make a decision related to the grandfathering of existing NEM consumers.
The U.S. has a long history of supporting energy infrastructure through the U.S. tax code. The market certainty provided by a long-term investment tax credit (ITC) for solar energy has supported private investment in manufacturing and project construction, a vital part in meeting our nation's energy policy goals, driving cost-cutting innovation and job growth.
It takes less than a day to install a typical home solar system yet it can take up to six weeks to get a permit. The overly bureaucratic and sometimes byzantine process for securing what should be a simple permit is becoming a bigger problem as permit applications flood building departments. Permitting is being brought into the 21st Century. CALSEIA is cutting soft costs by streamlining permitting for all solar technologies.
What does AB 2188 (Muratsuchi) do to Streamline Rooftop Solar Permitting in California?
AB 2188 requires local governments to adopt a solar ordinance by September 30, 2015 creating a streamlined permitting process that conforms to best practices for expeditious and efficient permitting of small residential rooftop solar systems.
By improving the efficiency of solar permitting statewide, AB 2188 will help lower the cost of solar installations and further expand the accessibility of solar to more California homeowners who want to control their electricity bills and generate their own clean energy. In addition, making solar energy more affordable will help the state reach its renewable energy and greenhouse gas reduction goals, and create more local jobs.
Minimum Eligibility Criteria for Expedited Permitting
A solar energy system no larger than 10 kW ac or 30 kW thermal.
A solar energy system installed on a single or duplex family dwelling.
A solar panel or module array does not exceed the maximum legal building height.
Expedited Permitting Ordinance
The ordinance must be adopted on, or before, September 30, 2015 by every city and county in California.
The ordinance must create an expedited, streamlined permitting process for solar PV and solar thermal systems consistent with the goals and intent of the California Solar Rights Act and must “substantially conform” with the recommendations, standard plans, and checklists found in the most updated draft version (bottom of page) of the Office of Planning and Research’s Solar Permitting Guidebook (“the Guidebook”).
The local fire departments or districts and the municipal utility director, if appropriate, shall have opportunity to consult with the city or county in developing the ordinance.
The expedited permitting process includes the permit paperwork and review process as well as the inspection.
Improving the Permitting Process
The city or county must adopt a checklist of all requirements with which small rooftop solar energy systems shall comply to be eligible for expedited review, as well as a standard plan and submittal documents necessary for expedited permit review. AB 2188 points cities and counties toward the checklists and plans found in the Guidebook and requires that they “substantially conform” with the guidebook while allowing for modifications “due to unique climactic, geological, seismological, or topographical conditions”.
AB 2188 stipulates that, once the city or county confirms that the application and supporting documents are complete and meet the requirements of the checklist, all required permits or authorizations be issued. Best practices dictate this review process take less than 24 hours and not more than three days.
AB 2188 DOES NOT require permits be processed online, though the use of online permitting is a best practice. AB 2188 DOES require that the checklist and permitting documentation be published on a publically accessible Web site (assuming the city or county has a Web site), and that the city or county allows for electronic submittal (Web, email, or fax) of a permit application and associated documentation.
AB 2188 requires that cities and counties allow for electronic signatures on all forms, applications, and other documentation in lieu of a wet signature, unless they are unable to accept electronic signatures in which case they must state the reasons for the inability in the ordinance.
Improving the Inspection Process
AB 2188 mandates that only one inspection be required for installations eligible for expedited review. AB 2188 thereby prohibits pre-inspections or rough inspections.
Fire departments or districts are encouraged to sign MOUs with their local cities and counties but retain the right to perform their own safety inspection of solar systems if there is no signed MOU.
Inspections are to be done in a timely manner and according to best practices, which include scheduling an inspection within 24 hours of request, or no later than five days.
Changes to HOA Approval Process
Separate from the permitting process for cities and counties, AB 2188 also provides for some tightening of the Homeowner Association (HOA) approval process.
AB 2188 reduces the ability for HOAs to increase the cost of a solar system or decrease the system’s efficiency with the following changes:
Lowers HOA allowable impact on the cost of solar hot water system from 20% to 10%, or not more than $1,000, and the efficiency of a system from 20% to 10%.
Lowers HOA impact on solar PV systems from $2,000 to $1,000 or a decrease in efficiency from 20% to 10%.
Shortens the number of days, from 60 to 45, that an applicant, seeking HOA approval, must wait for a written denial of a proposed plan.
The Office of Planning and Research published a 2014 California Solar Permitting Guidebook, including checklists and standard plans as well as recommendations for streamlined permitting that include timelines for review and inspections. These documents and recommendations are mandeted by AB 2188. CALSEIA sat on the steering committee for the Guidebook.
Solar Permitting Resources
SolarPermit.orghosts the National Solar Permitting Database, a free, online database of information related to solar permitting requirements of cities and counties across the country. Developed by Clean Power Finance and supported by a Department of Energy grant, SolarPermit.org organizes and simplifies solar permitting processes by compiling the information in a single location. Using the community-based platform, users of the database keep the information up-to-date and relevant. The project's goal is to minimize the time and resources required to and support the mass-market adoption of solar.
Solar ABC's - The Solar America Board for Codes and Standards (Solar ABCs) is a collaborative effort funded by the U.S. Department of Energy that dedicates experts to transforming solar markets by improving building codes, utility interconnection procedures, and product standards, reliability, and safety, and is part of its overall strategy to reduce barriers to the adoption of solar technologies and to stimulate market growth.