The Senate passes a bill to partially restore incentives for the use of solar energy

A bill that would restore the ability of schools, shopping malls, farms and residential building owners to use energy generated by their own rooftop photovoltaic systems passed the California Senate last week and was sent to the Assembly.

Senate Bill (SB) 1374, authored by Sen. Josh Becker, D-Menlo Park, repealed last year’s decision by the California Public Utilities Commission (CPUC) that prevented many multi-metered solar panel owners from using the electricity they generated for offset what they bought from Pacific Gas and Electric Co. (PG&E) and other energy companies.

The bill was approved 28-7 on May 20.

“SB 1374 removes an burdensome barrier and restores the ability for customers to use the energy they produce on their property themselves,” Becker said in a statement. “This bill is simply a matter of fairness. Multi-meter customers should be treated the same as everyone else – they do not have to sell their energy to the utility company at low prices and immediately buy it back at much higher retail prices.”

If approved by the Assembly and signed by Gov. Gavin Newsom, the bill would have no impact on individual residential solar users. Instead, it would impact facilities with multiple meters, including apartments, schools, community colleges, universities, water agencies, municipal facilities, farms and shopping malls.

Becker said the bill would ensure that “on-site generation” users are treated fairly and equally when it comes to the energy they use for their own needs.

Three utilities — PG&E, which provides electricity in Northern California; Southern California Edison; and San Diego Gas & Electric — oppose the measure, saying it would increase customers’ bills.

“SB 1374 subsidizes solar energy for all non-residential customers, not just schools,” the utilities wrote in a joint memo announcing their opposition. “This bill would create subsidies for government, commercial real estate and more, all of which would be paid for by other customers.”

Becker’s legislation follows the CPUC’s February 2023 vote to reduce the amount of money PG&E and other utilities give to solar users who sell their unused energy back to the grid. Opponents of the decision believed it would discourage Californians from purchasing rooftop solar systems.

The February decision prevented schools and other customers from using the energy they generated by more than one meter.

“It essentially forced these buildings to sell all the solar energy they produced to the utilities at a low rate and then buy it back from them at the full retail rate, rather than simply allowing them to use their own solar energy to offset the cost of the energy they buy from the utilities.” said Steven King, California’s Clean Energy Environmental Advocate.

Sam Davis, president of the Oakland Unified School District board, said in a statement that the district’s electric bills increased by $1.5 million last year.

“In previous years, we have used solar energy to offset rising costs and invest savings in programs that improve educational equity,” Davis said. “Restoring and protecting these incentives is critical to ensuring all students receive the education they need to thrive.”

Livermore Valley School District Superintendent Chris Van Schaack said the district has several solar-generating schools.

“This (SB 1374) would certainly benefit us and provide an incentive to expand our solar panels,” Van Schaack said. “While I can’t say definitively how much we would gain, I would say it’s definitely in the tens of thousands right now. We installed fewer solar panels in some schools than they could accommodate because we knew any additional energy would essentially be wasted.”

King said the bill should be part of a broader effort to encourage the construction of solar panels wherever possible, including on rooftops, parking lots and roadside areas.

Schools are an especially great place for solar energy, King said. “It helps meet California’s clean energy goals, increases community resiliency, and helps school districts save money.”

PG&E, SDGE and SCE responded by saying that the bill’s passage would “likely result in grid modernization that would mean high costs for all but benefit only a few customers.”