The Latest
June 10, 2026 update:
- The California Supreme Court declined to hear the appeal of a lawsuit to overturn the California Public Utilities Commission (CPUC) “NEM3” decision.
- The Supreme Court did not give a reason for declining the appeal.
- This means that the CPUC’s decision is here to stay.
Here is more background on the lawsuit:
Who filed the lawsuit
The Center for Biological Diversity, Environmental Working Group, and Protect Our Communities Foundation are the lawsuit plaintiffs. These groups are rooftop solar allies. They worked side-by-side with nearly 200,000 Californians, Solar Rights Alliance, and 600 other nonprofits, cities and schools to stop the utilities and CPUC from killing rooftop solar.
Why they filed the lawsuit
In December 2022, the CPUC slashed the credit that solar users get for sharing their extra solar energy with the grid by 80%. This change affects anyone who went solar after April 2023.
Just as we warned, the real world impact of NEM3 is unfolding in the form of declining consumer adoption of solar (see p. 31) and business bankruptcies.
Details of the lawsuit
Our side has argued that the CPUC’s NEM3 decision violates the law.
Specifically, our side contends that California law unambiguously says that any changes to the net metering program must consider all of the benefits of rooftop solar to all ratepayers, to the grid, and to the state’s environmental goals. In contrast, we believe that the CPUC only considered how net metering affects the utilities and their business model.
In 2024, the Court of Appeal rejected our lawsuit, not because they disagreed with our argument, but because they believed that the courts did not have the power to review most CPUC decisions.
Our side appealed to the CA Supreme Court, who in 2025 agreed in with us that the CPUC was not above the law.
The CA Supreme Court then ordered the Court of Appeal to actually consider the merits of our case, like we originally asked.
In 2025, our side again filed our arguments to the State Court of Appeal. Unfortunately, the Court of Appeal again sided with the CPUC.
Our side appealed again to the State Supreme Court because we believed that the Court of Appeal continued to give too much deference to the CPUC’s interpretation of the law, rather than looking at the plain language of the law itself.
The lawsuit all along asked for the Court to require the CPUC to redo the decision, this time while considering all of rooftop solar’s benefits.
What's next
Unfortunately, the “NEM3” decision is here to stay.
It is good to remember that all of our work to fight NEM3 did yield some important results:
- We preserved the 20 year protection for those on NEM1 and NEM2, which the CPUC tried to end.
- We stopped several attempts to charge a new $700 / year Solar Tax on both existing and new solar users.
Obviously, it would be much better if the utilities were also required to fairly compensate people for the excess solar they share with their neighbors.
But that ship has sailed. Going forward, it makes sense for consumers to store their excess energy in a battery and keep it for themselves when the sun is not shining.
The utilities know this, which is why they are also working to penalize people even when they don’t share any excess solar with the neighborhood.
This makes it very important that we continue to work together to protect everyone’s ability to make and store solar energy on their property without taxes, fees, or penalties.
Thank you for everything you do!
