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TECH Clean California; Potential changes to NEM rates

TECH incentives are now available

SB 1477- Senate Bill 1477 intends to help the state meet its goal of being carbon neutral by 2045. The driver of this regulation is that heating loads in buildings are responsible for 25 percent of California’s greenhouse gas emissions (GHGs). The initiative is a $200 million, four-year effort funded by gas company ratepayer funds. Supervision is the responsibility of the California Public Utilities Commission (CPUC).

SB 1477 includes two rebate programs – BUILD (Building Initiative for Low-Emissions Development) and TECH (Technology and Equipment for Clean Heating). Both programs intend to spur the adoption of low-emissions water and space heating technologies. The BUILD program concentrates on low-income and multi-family applications. The TECH program targets residential applications, specifically heat pump water heaters and heat pump space heating.

The TECH incentive program officially launched on Dec. 7th and is a statewide effort. Energy Solutions and its partners are the TECH program administrators.

There are two rebate structures for contractors enrolled in the program. The first option is for contractors in a gas service territory without rebate programs. These contractors will be eligible for the Basic level incentives from TECH.  Contractors in a region with an existing rebate program will be eligible for the Enhanced rebates, which add to the current rebates.

TECH is reaching out to eligible customers with The Switch Is On consumer awareness campaign, which focuses on building electrification. The Switch Is On includes a contractor directory tool developed and supported by Efficiency First California.

Are you interested in participating? Look for the TECH contractor enrollment form link at the bottom of the contractor directory, or click the link here.

Potential changes to NEM rates in California

During peak production times, typically in the middle of a sunny day, solar panels often produce more energy than can be used. This excess capacity is fed back into the electrical distribution grid for others to use. The utility compensates the solar provider for this clean electricity in a process known as Net Energy Metering or NEM. Utilities pay a discounted rate for the excess solar capacity and can resell this energy to their customers. NEM rates are often used to determine the payback period for solar installations. The higher the NEW rate, the faster the solar panels “pay for themselves.”

A recent proposal by the CPUC billed as NEM 2.0 advocates for reducing the NEM rates and adding monthly grid participation charges for installed solar for residential customers. The effort is based on leveling the playing field and sharing costs. The concern is that wealthy homeowners with solar panels do not share equally in the costs associated with maintaining and expanding the electrical distribution grid and that non-solar customers overpay for electricity by subsidizing net energy metering costs.

Some say this will encourage solar users to install storage, reducing over-production during peak solar generation. Others say this will push solar options further out of reach for the average consumer.

As we push to a carbon-free future, clean generation, such as solar, will be a critical strategy.

We will continue to follow this trend as the outcome will impact the push to all-electric buildings. For further reading on this topic, these articles in Green Car Congress and Utility Dive provide more context.

Charley Cormany

Executive Director

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