Topline:
The California Supreme Court today told a lower court to revisit a ruling that upheld reduced payments to solar panel owners for selling excess power back to utility companies. Justices did not rule on whether the changes to the solar program were legal, requiring the court of appeals to determine this.
The backstory: Utilities pay solar panel owners for their excess power under a program known as “net energy metering.” In previous iterations of the program, utilities paid solar customers a retail rate for their extra energy, which is the same price the utilities would charge other customers when they resold that energy. This was changed under the current iteration of the program — which instead gives customers the “avoided cost,” which is how much utilities save by not buying that power on the wholesale market. Utility commissioners ruled in favor of power companies, which argued that older versions of the program created an unfair cost burden on customers. Those without rooftop solar, utilities said, have to pay more than their peers for routine maintenance to the grid.
About the lawsuit: At issue is a 2022 decision by state regulators to reduce by about 75% payments to solar panel owners for excess power. The change was intended to help make bills affordable for all customers while still encouraging the adoption of renewable energy sources. Three environmental groups argued in the case that the state utility commission’s decision left out crucial considerations around benefits to customers and disadvantaged communities.
What's next?: "They basically said the lower court kind of punted on the whole substance of the [solar payments] decision,” Bernadette Del Chiaro, vice president for California at the Environmental Working Group, said. Whether or not the change in how solar panel owners are paid is legal will be left to the lower courts.
Read on ... for more detail on the decision.