California Assembly passes controversial solar bill ending net metering benefits for new homeowners
Last week, the California State Assembly approved Assembly Bill 942, a controversial measure that would eliminate net energy metering benefits for homeowners who purchase properties with existing solar systems, marking a significant shift in the state's solar policy landscape.
The bill, authored by Assemblymember Lisa Calderon (D-Whittier), passed the Assembly Committee on Utilities and Energy by a vote of 10-5, and subsequently passed to the California State Senate with a vote of 46 to 19 with 14 not present.
If approved by the State Senate and signed into law, beginning January 1, 2026, new homeowners who purchase properties with existing solar installations would be forced onto the state's current net billing tariff (commonly known as NEM 3.0), which provides significantly lower compensation rates for excess electricity sent back to the grid.
The legislation also removes eligible customer-generators from receiving credits under California's Cap-and-Trade Program, which funds greenhouse gas reduction efforts. However, the bill exempts public schools and agricultural customers from its provisions.
Supporters argue the measure addresses inequitable cost-shifting between solar and non-solar customers. According to the legislative findings, Net Energy Metering subsidies shift 11 to 20 percent of fixed grid costs to non-solar customers, amounting to $200-$400 per year per customer. The bill states that this cost shift has grown from $3.4 billion annually in 2021 to $8.5 billion by the end of 2024.
The legislation notes a significant income disparity, stating that in 2023, the average annual household income of residential rooftop solar customers was $115,000, while low-income customers enrolled in the California Alternate Rates for Energy program represented 28 percent of total residential customers but only 13.1 percent of rooftop solar subsidy program beneficiaries.
Labor organizations and ratepayer advocates joined in support of a measure to alleviate the solar cost shift and reduce monthly electric bills. Pacific Gas & Electric supports the bill, stating it would lower energy bills for all customers.
Calderon's office framed the legislation as necessary rate relief for non-solar customers who currently subsidize solar installations through higher electricity bills.
Solar advocates have mounted fierce opposition, arguing the bill breaks 20-year contracts promised to solar customers.
"AB 942 is a direct attack on California families who made long-term investments in solar with the promise of fair, 20-year Net Energy Metering agreements—guarantees that were clearly outlined in the state's own consumer protection documents." according to Vote Solar.
"By allowing A.B. 942 to move forward, the Assembly committee ignored the pleas of voters and instead sided with powerful utility interests," said a spokesperson for the Environmental Working Group.
"The agreement language that every solar user signs is abundantly clear" about the 20-year contract terms, according to Solar Builder Magazine.
One critic dismissed the bill's rationale, stating it "protects utility profits by blaming solar users" rather than addressing underlying electricity rate structures. In their most recent annual financial reports, PG&E had a $2.4 billion profit, Southern California Edison reports profits of $1.2 billion and San Deigo Gas and Electric enjoyed a $936 millon progit.
The bill represents California's continued retreat from solar-friendly policies, following the state's adoption of NEM 3.0 in late 2022, which already reduced compensation rates for new solar installations by approximately 75 percent.
With over 2 million solar installations across California, the legislation affects a substantial portion of the state's residential energy infrastructure. As the bill moves to the Senate, the debate highlights the ongoing tension between renewable energy goals and utility cost management in America's largest solar market.
The measure now awaits consideration in the California State Senate, where similar debates over utility costs, consumer protections, and clean energy policy are expected to continue.
Posts
Post a Comment