Why legislators must say no to the utilities’ newest Solar Tax proposal

The utilities and their allies are trying to tax your solar, again. This time, they’ve hidden a new version of the Solar Tax in Gov. Newsom’s proposed budget. Just like their previous Solar Tax proposals, the more energy your solar panels produce, the higher the Solar Tax would be.

Details on what is being proposed

  • The Solar Tax is the “holy grail” for the utilities. Their goal is to ensure that you can’t ever reduce your utility bill with rooftop solar. They’ve tried for a solar tax several times before, including here, here, and here – and that’s just in 2022.
  • Hidden in Gov. Newsom’s proposed 2025 budget is a proposal to tax the solar energy you make to fund a program to support energy efficiency programs at the CA Energy Commission (CEC).
  • Currently, these programs are funded through a per kilowatt-hour tax that all ratepayers—including most solar users—pay when they consume electricity from the grid.
  • The energy generated and used on-site by rooftop solar panels is not included in this tax because it never touches the grid. The energy stays “behind the meter”, where you consume it in real-time.
  • This proposal would change that, authorizing the state of California to set up a brand-new mechanism to estimate how much energy your panels produce—and tax it.

It makes no sense to tax rooftop solar to incentivize energy efficiency

  • Your rooftop solar reduces strain on the grid, lowering costs for everyone and making blackouts less likely. State officials should be trying to get more people to do this. Instead, they’re trying to tax it!
  • This proposal is like taxing people who already hang-dry their clothing in order to get more people to hang-dry their clothing.

The state has no good reason to tax rooftop solar

  • Electricity usage has steadily increased in California over the past ten years and is expected to double in the coming years. That’s because of people switching to electric appliances and cars.
  • In other words, there is already more than enough new electricity being consumed to fund the CEC’s energy efficiency programs.

This Solar Tax proposal is part of the utility strategy to end rooftop solar

  • The utility strategy is to first tax solar for something that seems good, like energy efficiency. But they won’t stop there. Once the Solar Tax mechanism is established, they will keep using it to achieve what they want: an end to rooftop solar.
  • The proposed Solar Tax will start at $2.76 per year on average, based on how big your solar system is. The more solar you generate, the higher your Solar Tax.
  • But give them an inch, and they’ll take a mile. $2.76 per year will become hundreds of dollars per year before we know it.
  • That’s why it doesn’t matter how much the proposed Solar Tax is or what it is for. What matters is that Governor Newsom’s budget would authorize a mechanism to tax rooftop solar for the first time. And taxes only go up, not down.

Legislators must stand up for rooftop solar and block any and all Solar Taxes

There are four state legislators who chair powerful committees that have the power to ensure this new Solar Tax proposal never sees the light of day. If you are a constituent, please call them and tell them they must block the Solar Tax and stand up for rooftop solar.

  • Senator Josh Becker: (916) 651-4013
  • Senator Scott Wiener: (916) 651-4011
  • Assemblymember Steve Bennett: (916) 319-2038
  • Assemblymember Jesse Gabriel: (916) 319-2046

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