California’s Clean Energy Future Is Still Bright

Solar remains a smart investment—even under NEM 3.0.

SPURR’s awarded REAP Program vendor, DSD Renewables, reports solar energy can still be economical in California, especially for public agencies like schools and municipalities, but success depends on careful project design. While NEM 3.0 lowers compensation for exported power, rising utility rates and state sustainability mandates keep solar financially and strategically attractive. The key is right-sizing projects, maximizing on-site use, and integrating storage where possible.

Read the full article here: Is Solar Still Economical in California?

Below are some highlights from DSD’s article (published August 8, 2025)

• Key Question Explored
  The article investigates whether solar energy remains a financially viable solution for public agencies in California—particularly K-12 schools, community colleges, and municipal districts—amid a rapidly shifting clean energy landscape, including new federal and state policies like the “One Big Beautiful Bill Act (OBBBA).”
  
  
• Expert Consensus: “Yes, But It Depends.”
  A panel of experts—including representatives from SPURR, CCLC, and DSD—agreed that solar can still make economic sense. However, success now requires a strategic, site-specific approach rather than a one-size-fits-all solution.
  
  
• Challenges Posed by NEM 3.0
  The introduction of Net Energy Metering 3.0 (NEM 3.0) significantly reduces compensation for excess solar energy exported to the grid—unlike NEM 1.0 and 2.0—and requires careful project “right-sizing,” focusing on maximizing on-site consumption and possibly integrating energy storage.
  
  
• Rising Utility Rates as a Counterbalance
  Escalating utility rates in California act as a counterweight to reduced solar export compensation. The CPUC anticipates additional rate hikes of 20–49% over the next two to three years, which makes solar investments increasingly compelling.
  
  
• Policy Drivers Beyond Cost
  Strong sustainability mandates—like goals for 50% renewable energy by 2030 and 100% by 2035 for community colleges, along with CALGreen requirements for solar and storage in new K-12 and college buildings—are compelling public agencies to pursue solar, not just for savings but also for compliance and stakeholder demand.
  
  
• Best Practices for Solar Project Planning
  The panel emphasized the importance of:
  • Collecting and sharing granular facility data
  • Conducting detailed energy consumption analyses
  • Early-stage consideration of physical constraints (e.g., rooftops vs. parking lots) and permitting issues
  • Engaging expert partners for detailed, site-specific evaluations and offtake structuring