Raising California’s Net Metering Cap to 10%

The California State Assembly passed a bill Thursday that would raise the cap for net metering to 10 percent from 2.5 percent.

The legislation, AB560, aims to boost more renewable energy production, particularly in solar. The popularity of the state's solar rebate program, the California Solar Initiative, especially in the region served by the Pacific Gas and Electric Co., means the 2.5 percent cap could be reached by next year, the state said.

Net metering allows the utility's customers to get credits on their bills for producing more electricity than what they could use. The excess electricity goes to the grid.

Without raising the cap, PG&E or other utilities or electric cooperatives would not accept new participants in the net metering program once the total generation capacity of net-metering customers' systems in each of their territories hits 2.5 percent of the load (aggregate customer peak demand).

PG&E customers are generating more solar power than those served by Southern California Edison or the San Diego Gas & Electric. About 123 megawatts of systems have been installed, compared with 81.2 megawatts for Edison and 18.6 megawatts for SDG&E, according to the California Public Utilities Commission, which oversees the California Solar Initiative.

The net metering rule also applies to wind energy producers or those who own a combo of wind and solar systems. Only solar, wind and hybrid projects under 1 megawatt qualify for net metering under the current law. The Assembly bill leaves the limit as is.

AB 560 will still need the state Senate's approval.