SMUD plans to cut net-metering credits by 44% next year
Just days after President Biden’s Department of Energy released a first-ever blueprint calling for an immediate doubling of solar power to combat climate change, the local Sacramento utility passed a policy that would encourage new solar installations in the region. will slow down and at the same time harm existing solar energy. users. The policy comes a year after the Sacramento Municipal Utility District (SMUD) board of directors passed its own Climate Emergency Declaration, committing to move away from fossil fuels by 2030. the staff has a plan for how it’ll get there, stunning environmentalists as they watch the utility deliberately curb solar growth in the region.
“SMUD is killing rooftop solar at a time when they should do anything to make it grow,” said Lee Miller, an Elk Grove resident and board member of the Solar Rights Alliance, an organization that promotes solar energy users in the world. represents the Sacramento region and across California. “This is sheer madness. The state is burning. Hurricanes rage. We need more solar energy, a lot more solar energy, and we need that now.”
In response to SMUD’s decision to scrap its solar incentives, solar energy users and environmentalists took to the streets and staged a protest outside SMUD’s headquarters during a virtual board meeting.
“I went solar to help the planet, power my EV, and save money on my utility bill, but I never thought SMUD would recoup the financial benefits of significant customer investment in clean, renewable energy,” says SMUD -customer Fatima Malik. “SMUD used to be a progressive utility company, but they have become a bully domestically. All they seem to care about is hoarding opportunities and monopolizing the solar market.”
At a board meeting Thursday night, SMUD’s board of directors voted to pass changes to its long-standing net metering program. According to net measurement, 36,000 SMUD homes have gone solar so far, including 2,000 low-income families participating in the SMUD bill assistance program, and more than 400 businesses.
Effective March 2022, SMUD will reduce the credit customers receive for energy returned to the grid and used in their immediate environment by 44%, from 13.2 cents to 7.4 cents per kilowatt hour. Such a move will make investments in solar energy less valuable and thus hurt the financial benefits. Most consumers want to save money by investing in solar energy. The policy changes will apply retroactively to all existing solar energy users in the SMUD area from 2031. The reduced credits are also activated by adding solar panels to an existing solar system, adding a battery or selling your home. Making retroactive changes to grid metering is something the State of California has rejected for PG&E customers.
Today, 6,400 homes in Sacramento County invest in solar energy each year, generating 27 MW of clean energy and supporting 2,700 jobs and dozens of local businesses. The California Solar and Storage Association estimates that under SMUD’s new program, the solar energy market for existing homes will slow down, declining by as much as 40-50 percent from what it is today.
“We’ve seen this movie before. Other utilities have tried the same, and the results have been disastrous: less solar energy and fewer local jobs,” said Ben Davis, policy officer at the California Solar & Storage Association (CALSSA), which represents dozens of local solar companies and their employees. “We see this kind of backward policy making in other states, but you never really get used to seeing it in California, not to mention Sacramento. It is a pity.”
At a workshop of SMUD’s board of directors two weeks ago, SMUD staff orchestrated public comments from local organizations and companies queuing up to speak out their anti-solar proposal. Many of the organizations receive grants from SMUD and had little knowledge of the policies pursued. Meanwhile, members of the public, including existing solar users, were expected to wait more than three hours for a video call to testify against the proposal. Many people gave up because of the long wait and the feeling of powerlessness.
“I can’t believe SMUD doesn’t support working families by allowing them to use solar energy to lower their bills when we struggle with COVID and under unemployment,” said Adriana Santana, a mother of six who lives in Del Paso Heights lives and entered solar system last year. “My bill used to be over $400 a month and I was drowning in debt. I was behind on paying my bills and had to make sacrifices because if I pay $400 in SMUD, that’s money I won’t have for two weeks for groceries for my kids. I invested in solar energy to save money and it worked, but now SMUD is trying to pull the rug out from under me and my neighbors.”
In promoting their anti-solar plan, SMUD is touting their support of another program that they claim will boost energy storage adoption, but is in fact a lame initiative that raises a number of questions for consumers. Under the program, SMUD would offer an upfront payment of up to $2,500 plus $200 per year. Combined, the payments will cover about 35% of the cost of the battery, but the homeowner would have to transfer 75% of the battery to SMUD for up to 200 days a year. The program is unlikely to lead to significant adoption, given the high cost of batteries and low subsidy payments coupled with requirements that make the battery feel more like SMUDs than the homeowner’s.
Meanwhile, SMUD maintains its large subsidies to consumers who invest in electrical appliances and vehicles. The utility prefers homes that are all electric but do not have their own solar power system to cover their increased electricity usage. In this way, consumers buy more of SMUD’s product: electricity, which significantly increases the utility’s revenue.
“It’s all about solar power and energy storage, and rooftop solar goes hand-in-hand with electrification efforts,” Davis said. “But consumers need solar energy to charge their batteries and they need solar energy to cover their increased electricity consumption. Killing the solar economy while trying to encourage batteries and electrification in the home is like one step forward and two steps back. That’s how you crush an emerging market, not how you grow it.”
Utilities, including SMUD, have promoted major changes to the state’s netting program through a fabricated cost-shifting argument. Their mindset argues that homeowners, schools and businesses that generate their own power from the sun are not providing enough revenue for the utility, forcing the utility to meet their revenue needs on the backs of other customers. Studies show that investing in local rooftop solar can save on utility costs, avoiding the need to bring energy from distant solar and wind farms to cities like Sacramento. Utility revenues may shrink, but their ability to pass savings on to all taxpayers from a more affordable, renewable electricity grid is growing.
“Everyone knows that a stitch in time saves nine,” Miller said. “By investing in rooftop solar today, all consumers will save billions of dollars in the coming years as we continue to fight climate change. That’s what President Biden’s call to action is all about and it’s a shame that the SMUD board is moving in the opposite direction.”
News release from the Solar Rights Alliance