Thompson Calls on CPUC for Equitable Solution on Residential Solar Panels

Press Release

Posted: March 5, 2022

Washington – Today, Rep. Mike Thompson (CA-05) continued his efforts to ensure that the Californians who did the right thing and installed solar panels do not face an increased tax on them. The California Public Utilities Commission (CPUC) proposed to significantly cut the net metering rate and apply a new tax on solar panels, leading to an average of a $90/month increase while decreasing the financial returns from selling excess energy.

“Climate change continues to be one of the most pressing issues our communities are facing, and many Californians have taken a smart step and installed solar panels on their homes to transition towards clean energy,” said Thompson. “However, the combination of decreasing the net metering rate and raising taxes on solar panels would disincentivize the installation of solar panels and penalize Californians who are doing the right thing for our climate. CPUC must reevaluate these proposed changes to protect the solar panel industry and ensure the financial benefits remain for those who transition to solar energy.”

Congressman Thompson led a letter to the CPUC that 25 members of the California delegation signed calling for a reevaluation of the proposed changes. The letter can be found here and below.

Dear President Reynolds:

We are writing to share the concerns we have heard from our constituents, small businesses, and many others, regarding the California Public Utilities Commission’s (CPUC) proposed decision to significantly reduce the financial benefits of rooftop solar in California. We applaud your decision to postpone this proposal and ask you to use the time to look at options that do not harm existing residential solar adopters while achieving an equitable solution for future adopters as well as all customers.

We are proud that California leads the nation in rooftop solar installations. Net energy metering has made it possible for Californians to plan for and install solar systems based on a known return on investment. One of our main concerns regards changing the rules of the program that many of our constituents planned on when committing to a solar system. The proposed decision would upend the fundamental calculations upon which contracts were presented to our constituents, which were based on regulations the state had in place at the time to incentivize clean energy adoption. Retroactively altering these assumptions would change the expected benefit of installing solar and represent a breach of trust between the state and residents who opted to do the right thing for the environment.

We appreciate that net metering should be updated to reflect new market conditions and state policy goals. However, imposing a tax on solar panels and reducing the rate of solar power exports by as much as 80 percent will label California as a climate straggler, not a climate leader.

We are making great strides in Congress to address the climate crisis by accelerating the deployment of renewable energy technologies. As you know, in November the House of Representatives passed legislation that included a 10-year extension of the federal tax credits for solar energy and storage to maximize deployment over the next decade. We are concerned that the proposed decision runs counter to this policy objective and would reportedly cut California’s rooftop solar market in half by 2024.

We do support the CPUC’s efforts to expand the benefits of solar to more Californians, especially those in disadvantaged communities and communities of color; however, any policy that severely impacts the rooftop solar market will not achieve that policy objective. We are confident that there are better policies to keep solar growing while making it more accessible to underserved communities.

We urge you to consider options that do not harm existing solar users while achieving a forward-looking solution for future adopters and all customers. We look forward to the CPUC issuing a dramatically revised policy that supports rapid renewable deployment and California’s continued climate leadership.