Governor Jerry Brown
State Capitol
Sacramento, CA 95814

Senate Pro Tem Kevin de Leon
State Capitol
Sacramento, CA 95814

RE:  California Distributed Power

Dear Governor Brown and Senator de Leon:

As leading investors in California’s cleantech industry, we greatly appreciate your leadership to establish strong renewable energy goals that will reduce climate pollution. With only three weeks left in this year’s legislative session, we wish to bring to your attention an important gap in current state policy efforts.

As Governor Brown noted in his January 2015 State of the State address, deriving 50 percent of our electricity from renewable sources by 2030 will require transforming our electricity grid and distributed power must play an important role. This means expanded deployment of rooftop solar, which is occurring across the state in large part because of the availability of net energy metering (NEM).

The NEM policy has helped California’s solar industry grow into a world leader and leverage billions of dollars in private investment in the installation of distributed solar energy systems across the state. This policy has helped create more than 54,000 solar jobs all over California -- greater than the total number of persons employed by the state’s five largest utilities. The NEM policy is also spurring innovations that have enabled the solar industry to scale, bring down costs substantially, and save energy consumers in California billions of dollars.

Legislation that Governor Brown signed two years ago, AB 327, requires that the Public Utilities Commission (PUC) develop new NEM rules by the end of the year that now are projected to be implemented for new customers in many communities across the state during 2016. In recent filings at the PUC, the utilities have proposed ending NEM and replacing it with radically different programs and rate designs that would destroy the economics for solar customers.

Investors have been committing capital to California’s rapidly growing rooftop solar industry with the expectation that the state’s solar-friendly policies will not be dramatically changed overnight. That expectation is now being called into question by the utilities’ proposals and the PUC Energy Division’s apparent decision to apply the wrong cost-effectiveness test when evaluating the program. This market uncertainty is compounded by implementation of significant changes to electricity rates and tariffs, the scheduled step-down of the federal Investment Tax Credit for solar at the end of 2016, and the focus of the renewable portfolio standard (RPS) on larger systems.

We ask that you restore policy certainty for California’s rooftop solar industry by ensuring that a sustainable NEM policy continues. This will reassure the market and the venture capital community of the state’s ongoing commitment to include distributed power in California’s clean energy plans. It will encourage additional private-sector investment and job growth in our state’s growing cleantech industry and send a powerful signal to markets in other states.


Nancy E. Pfund
Managing Partner

Raj Atluru
Venture investor

Rick Brown, Ph.D.
President, TerraVerde Renewable Partners

Josh Cohen
Managing Partner, City Light Capital

Robert Davenport III
Managing Partner, Brightpath

John Doerr
Partner, Kleiner Perkins Caulfield & Byers

Ira Ehrenpreis
Managing Partner, DBL Partners

Charlie Finnie
Managing Partner, Greener Capital

John Fisher
Managing Director, Draper Fisher Jurvetson

Josh Green
Managing Partner, CCM Energy

David Kirkpatrick
Managing Director, SJF Ventures

Ben Kortlang
Partner, Kleiner Perkins Caulfield & Byers

David Prend
Managing General Partner, Rockport Capital

Zeb Rice
Managing Partner, Angeleno Group

Dipender Saluja
Partner & Managing Director, Capricorn Investment Group

Steve Vassallo
General Partner, Foundation Capital

Steve Westly
Managing Partner, Westly Group

Don Wood
Partner, Draper Fisher Jurvetson

cc:           Assembly Speaker Toni Atkins
                Assembly Member Susan Bonilla
                Assembly Member Jim Cooper
                Assembly Member Richard Gordon
                Assembly Member Patrick O’Donnell
                Assembly Member Henry Perea
                Assembly Member Bill Quirk
                Assembly Member Anthony Rendon
                Assembly Member Phil Ting
                Assembly Member Das Williams