Letter to Hon. Alice Busching Reynolds, President of the California Public Utilities Commission - Rep. Mike Levin Leads Letter Urging CPUC Not to Undermine Inflation Reduction Act Incentives by Imposing Punitive Rooftop Solar and Battery Fees

Letter

Dear President Reynolds:

We write to share our concerns about the potential imposition of any discriminatory fees or drastic and immediate export rate reductions on rooftop solar and storage customers in the net energy metering (NEM) 3.0 proceeding, as such provisions would undermine the goals and intent of the Inflation Reduction Act (IRA). We fought hard to secure robust clean energy incentives in the IRA in order to accelerate the deployment of renewable energy in California and across the United States. Multiple independent analyses have found that these incentives will reduce emissions by approximately 40% by 2030 -- but those analyses assume the continuation of supportive state policies.

The IRA contains a range of initiatives designed to complement state clean energy programs and benefit individual energy consumers, including provisions that target benefits to environmental justice and low-income communities. The extensions of the 30% Section 48 Investment Tax Credit (ITC) and 30% Section 25D tax credit are intended to make solar and storage more affordable for consumers and more cost-competitive with conventional fossil fuel generation. Individual adoption of solar and storage must accelerate for the IRA to achieve its climate goals.

It is concerning to see entities arguing that the IRA's passage warrants weakening state-level solar and storage policies, as is happening now in the NEM 3.0 proceeding (R.20-08-020). These proposals would effectively make rooftop solar and storage more expensive for our constituents and would slow its deployment -- the exact opposite of our impetus to expand and extend solar and storage incentives in the IRA. As you are aware, independent analysis estimated that the CPUC's December 2021 Proposed Decision would have cut California's residential solar market in half by 2024.

A March 2021 report from the California Air Resources Board, California Energy Commission, and CPUC found that residential solar capacity will need to more than triple by 2045 in order for California to achieve 100% clean electricity by 2045.

We respectfully urge the CPUC not to use the IRA's provisions aimed at increasing deployment of rooftop solar and storage as perverse justification to impose discriminatory fees on these assets. Instead, we hope that you will consider supporting reasonable reforms that build on the IRA and ensure the solar and storage industries are poised to play an expanded role in meeting our climate and energy resilience goals.

Sincerely,