California's New Energy Law Sets the Stage for Solar Power Growth

Governor Brown signs net metering bill authorizing state's PUC to redesign rate structure

This week, California Governor Jerry Brown signed AB 327, which sets policies promoting the development of distributed renewable generation, including rooftop solar.

California is developing a lot of renewables, and as we heard last month at the Council's symposium on California's power markets, it's now a significant part of their resources. The existing renewable portfolio standard requirement is 33 percent by 2020. With the passage of the bill, the target will be, in the words of Governor Brown, "...a floor, not a ceiling."

The bill:

  • raises the limit for net metering to 5,200 megawatts for customers of the state's three large investor-owned utilities (this is in addition to the RPS)
  • gives the California Public Utility Commission authority to increase the existing RPS requirement
  • requires IOUs to submit plans by July 2015 to maximize benefits of distributed resources
  • rewrites ratemaking policies, including how utility costs are recovered in fixed monthly charges and volumetric rates

While questions concerning cost recovery for utilities and implementation by the CPUC remain, advocates of the bill note that this could be a model for other states, providing certainty for consumer-owned renewable generation and the solar power industry.