Because of the extraordinary efforts of tens of thousands of Californians, state legislators voted in July to protect two million rooftop solar contracts.
AB 942, authored by a former SoCal Edison executive, would have broken 2 million rooftop solar contracts and punished solar users just for putting panels on their roof. It would have applied to all solar customers who signed up for solar before April 2023 (NEM1 and NEM2). The bill would have caused many solar owners to lose tens of thousands of dollars when they sell their home.
However, thanks to your phone calls, messages, rallies, and lobby meetings, legislators in the State Senate voted to protect solar users from these threats.
The Senators did this with a move called a “gut and amend.” They got rid of everything in the original bill, and then stuck something else in.
What they took out: Everything in the original bill that specifically targets or discriminates against rooftop solar consumers, including all of the preamble language that disparages rooftop solar.
What they put in: A new rule saying that households with an annual electricity bill that is less than $300 will not get the annual “California Climate Credit.” Most people will not be affected by this change because everyone will be paying a “Utility Tax” of about $300/yr starting in 2026 just to be connected to the grid.
There is plenty to criticize about the amended bill, but it no longer discriminates against solar users, which is absolutely critical to prevent a future Solar Tax. As is often the case, customers of publicly owned utilities like SMUD are not affected by the bill at all.
Also, to be clear, we do not support the Utility Tax, spent all last year fighting it, and will continue to fight it.
Bottom line: your solar contract is safe, and AB 942 no longer targets people just because they have solar panels.
- All existing solar contracts remain protected from retroactive changes.
- The bill no longer blames rooftop solar users for rising electricity rates.
- The bill no longer punishes solar users just because you put panels on your roof.
We want to acknowledge the leadership of Senator Josh Becker, Chair of the Senate Energy Committee, where these changes were made. Senator Becker led the effort to ensure the bill would not target solar consumers, and took time to thank solar users for their investments.
In addition, every member of the Senate Energy Committee voted to protect your solar contract. This is a highly unusual case in which every type of vote is pro-solar. A “Yes” vote helped pass a bill that no longer threatens solar. A “No” or “NVR” vote would have prevented the bill from passing in any form. Either outcome would have removed the threat to solar. See how they voted.
A special thank you to everyone who met with their elected official about this bill, and to all the people who came to Sacramento yesterday and over the last few months to testify against this terrible bill (including those pictured above). These folks waited for hours before being allowed to speak. Thank you!
Special thank you to the more than 100 other organizations who worked side-by-side with us to defeat this threat, including the California Realtors Association, Sierra Club, Environment California, Environmental Working Group, Consumer Watchdog, and CALPIRG.
Finally, we hope that solar consumers and supporters are darn proud of themselves and their fellow Californians who spoke out against this bill. The most powerful special interests in California tried to go after your investment, with the backing of powerful lawmakers. You prevailed because you spoke up loudly and persistently to defend your solar rights.
The sun belongs to everyone, and you have the right to make energy from the sun without unreasonable interference or unfair punishment from the utilities or the government. We will continue to fight for these common sense principles, and we hope you do as well.
Background: State of CA required two million solar consumers to sign a 20-year contract
California requires PG&E, Edison, and SDG&E to sign an “interconnection agreement” with solar customers. For consumers who signed up for solar before April 2023, the contract says their system can stay on their “net metering” plan for twenty years, which is the minimum warranty for solar panels. The contract’s twenty year guarantee remains in place even if the home is sold.
Two million consumers invested tens of thousands of dollars, often taking out long-term loans and leases, to pay for their solar. They made this investment trusting that the State would stand by their contract.
The twenty year protection is not random. It is based on a long-standing, well-documented precedent. Learn more about the solar contract.
Newsom Administration proposed to break solar contracts and tax solar
Despite the fact that the state told consumers that their solar contract was guaranteed for twenty years, the CA Public Utilities Commission (CPUC), at the request of Gov. Gavin Newsom, proposed earlier this year to:
- Break two million solar contracts.
- Slash the credit these consumers get for the solar energy they send back to the grid.
- Slap them with a Solar Tax.
- Apply these changes to anyone who went solar before April 2023.
A former SoCal Edison lobbyist then filed a bill to make the proposal law
- To help implement the Newsom Administration’s proposal, a former SoCal Edison executive, Assemblymember Lisa Calderon, filed a bill to break all NEM1 and NEM2 solar contracts (AB 942).
- In the Spring, the bill was weakened to break the solar contract if the home is sold, which did little to reduce the harm of the bill.
- Consumers invested in solar trusting that the State of California would stand by their twenty year contract.
- Many consumers are counting on their solar to improve the value of their home if they need to sell.
- Breaking the contract upon sale of the home would have reduced the value of those homes, causing many home sellers to lose a good part of their investment.
- In addition, consumers who took out 20 year leases and loans to pay for their solar would have likely needed to pay off those loans and leases if they sold—and would have lost $10,000, $20,000, $30,000, or more in the process.
- Most solar consumers are middle and working class, and can ill-afford to lose this kind of money.
