Update 5/9/2024: Commissioner Alice Reynolds postponed a vote on California community solar credits until at least the end of May for “further review,” according to the LA Times. 

The California Public Utilities Commission (CPUC) on Monday rejected a proposal from solar advocacy groups that would support community solar in the state, instead putting more decision-making power into local utility hands.

“This is a significant misstep in a string of head scratching CPUC decisions that are crushing California’s clean energy progress and preventing thousands of households from accessing the benefits of solar energy,” said Stephanie Doyle, California State Affairs Director for the Solar Energy Industries Association (SEIA). “The state legislature made it clear in passing AB 2316 that it wants a robust program to provide community solar to low-income Californians and to support grid resilience for all ratepayers. This proposed decision, if adopted, will harm those efforts and risk California missing out on crucial federal funding by approving a utility-backed alternative that is unlikely to be commercially viable.”

AB 2316, signed into law in September 2022, requires large utilities serving more than 100,000 customers to create and implement programs that “enable ratepayers to participate directly in offsite electrical generation facilities that use eligible renewable energy resources,” such as community solar. The Coalition for Community Solar Access (CCSA) proposed to the commission a Net Value Billing Tariff (NVBT) that would compensate subscribers to community solar projects based on the value of a project’s generation at the time it’s provided to the grid. CPUC determined this week that the NVBT “conflicts with federal law and does not meet the requirements” of AB 2316.

CPUC instead suggested that utilities PG&E and SCE should determine the cost cap available to “disadvantaged communities” through community solar. The solar industry worries this would make community solar incapable of growing into a worthwhile market for project developers or subscribers.

“The CPUC had a significant opportunity to take a major step forward today to position California as a national leader on community solar deployment. Unfortunately, this proposed decision misses the mark entirely and will make it impossible to ensure equitable access to renewable energy plus storage projects that maximize benefits to low-income communities and further environmental justice. Scaling community solar capacity is key to impacting as many low-income customers as possible,” said Derek Chernow, Western Regional Director for CCSA.