California, once hailed as a leader in clean energy, has fallen off track to achieve its clean energy goals. This sentiment was expressed by the California Solar Energy and Storage Association (CALSSA) at the North American Solar Show in San Diego last week. In 2018, the state enacted a bill aiming to achieve 100% carbon-free electricity by 2045. Recently, California Governor Gavin Newsom set a more aggressive mid-term goal of achieving 90% carbon-free electricity by 2035, accelerating the deployment process. Electricity demand is expected to rise sharply, making the goal even more daunting given California's ambitious vision to electrify all homes and its plan to end sales of new natural gas vehicles by 2035. According to the California Energy Commission, in order to achieve the 2045 goal, 6 GW of new solar energy storage projects will be needed every year in the next 26 years. However, over the past five years, solar deployment in California has only reached about half of the 6GW average annually.
To achieve its zero-carbon energy goals, California implemented a Net Electricity Metering (NEM) 3.0 policy that cuts compensation for customers who deliver electricity to the grid. Coupled with the high interest rate environment, the economics of rooftop solar projects in California have weakened and demand has fallen sharply. The California Solar Energy and Storage Association reported that the rooftop solar industry has lost about 17,000 jobs and demand has dropped by about 80%. Solar insurance company Solar Insure said 75% of its insured companies face a "high risk of insolvency". Major public companies such as Enphase and SolarEdge have also slashed their jobs.