A new proposal in the California legislature, AB 942, seeks to break nearly two million rooftop solar net metering contracts and shift existing customers onto a rate structure that would decrease credits on their electricity bills by roughly 80%. If passed, the proposal would increase a typical solar customer’s bill by $63 per month.
Over two million rooftop solar projects are installed in California on homes, schools, small businesses, and other rate paying customer sites. Californians invested tens of thousands of dollars or entered 20+ year contracts with the expectation that they would secure predictable, stable electricity rates for the next two decades or more.
This predictable cost for electricity amid steadily increasing utility-provided electricity rates was made possible by net energy metering (NEM), which enables customers to export excess daytime production to the local grid in exchange for credit on their electricity bills.
“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,” said Steve Campbell, Western Regional Director, Vote Solar.
In April 2023, California moved its NEM structure to a net billing tariff, also known as NEM 3.0. The new rate structure cuts the rate credited to new solar customers by roughly 80%. The California rooftop solar market subsequently crashed as the return on investment for installing a project was heavily damaged.
The shift to NEM 3.0 cut the average export rate in California from $0.30 per kWh to $0.08 per kWh. Now, AB 942 proposes to force existing solar customers onto the unfavorable NEM 3.0 rates.
An average home uses 870 kWh of electricity per month. Solar customers typically export 20% to 40% of their production to the grid. This means with the average net metering rate decrease and assuming a 30% export of production, solar customers would have their monthly bills increase by $63 under the proposed bill.
The bill requires that starting July 1, 2026, an eligible customer-generator that has taken service pursuant to NEM 1.0 or 2.0 for 10 or more years is no longer entitled to take service under that contract or tariff. The bill would then require that existing customers are shifted onto the NEM 3.0 tariff.
“More than a million Californians signed contracts and state-issued guides in good faith, trusting that regulators would keep their word,” said Campbell. “Retroactively breaking those agreements would set a dangerous precedent for all consumer protections in California.”
The bill was filed by Assemblymember Lisa Calderon. Calderon had a 25-year tenure in a government affairs and political compliance role with one of the state’s investor-owned utilities, Southern California Edison.
Rooftop solar was studied to provide roughly $1.5 billion in savings to utility ratepayers, including non-solar customers, in 2024. But California’s utilities have made rooftop solar has the scapegoat for high electricity rates.
According to the California Public Utilities Commission (CPUC), the state’s three largest electric utilities PG&E, SCE and SDGE have raised customer rates by 110%, 90% and 82%, respectively, over the last decade. Despite relatively flat electricity usage, transmission and distribution spending by utilities has increased 300%.
A sign-on letter including nearly 100 organizations opposes AB 942.
“To address rising rates, California must focus on what’s really wrong with our energy system: uncontrolled utility spending and record utility profits,” the letter states. “A.B. 942 would increase rates, limit choice, derail the state’s clean energy progress, erode public trust in government, and avoid the hard work of actually reforming our state’s utility industry.”
(Read: “Six ways for California to lower electricity rates”)
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Insanity. They can loosen restrictions on natural gas to offset electrical costs a bit. Instead they go against the consumer who was apparently lulled by false promises.
Sounds to me like a class action suite coming their way.
I believe these owners that spent a good portion of their savings and retirement funds are not going to sit still.
Those original NEM rates were too generous. Other ratepayers have been subsidizing those PV rates which are more than the cost of the energy that the utilities purchase from any other source. Those original customers have had their systems paid for many times over by now. The original NEM rates should have had a sunset date.
I feel totally DUPED by the energy industry! I felt it was my duty to use clean energy and the fact my excess was exported back to the grid for a sum was a win/win situation. I’m living up to my agreement, the CUPC MUST LIVE UP TO ITS!
I never hear that the share holders pay for any up grades or repairs it’s always the ratepayers via increase rates every year!
It’s never enough for utility companies. God forbid they don’t get millions iat bonus time.
Consumers who try to escape over inflated utility bills and consumption, are still penalized.
Time to have the state take over all utility companies!
States take over all utility companies? That’s a major part of the problem. In California, the CPUC composed of politically appointed puppets controls(?) the utility companies. A beneficial synergy exists between the utilities and politicians at the expense of the consumer.
Please explain to me how the Govt can cancel a 20 year contract. Seems like an easy class action suit. Lack of trust in govt will only decrease.
This bill MUST be defeated and the sponsor sent back home.
California has the best democracy that money can buy… Including apparently Rep. Calderon.
Class action law suite incoming!
As with any contract, this means that I can consider it null and void and I can stop paying my solar panel provider correct? Or re negotiate new terms right?
I find this quite interesting that now they want to go ahead and take away the agreement that was done in good faith and people who were trying to help provide power on the grid and trying to keep up good energy practices. Many people have spent good money on making the investment and utility companies have to be responsible for the actions that they do. Customer service has gone down and deteriorated with utility companies. When you try to reach them or contact service it can be very challenging. People will begin to not trust what goes on anymore and if consumer protections that have been installed in California this is the time where we need to make sure that those protections remain in place. California mandated that all new housing has to have solar installed on the property. But if you take away the incentives, what’s the purpose of even having solar program. We need common sense back in our government and support our citizens who came on board to support the program and made a difference. Green energy programs are great. And it’s the people who make the difference because they care about the environment. Quit punishing the consumers who tried to do the right thing. I have no confidence in what the utility companies do. They have brought that on themselves. Take accountability for your business and how you affect your customers. Because the consumers are going to push back. God bless America.
You should use your own generation, that has the highest value.
I sympathize with homes that bought more solar than they could use, but they’ve always been up against a superior enemy.
I installed solar panels and a storage battery at my house four years ago. I considered how long it would take to recover the costs of that installation. The deal made sense to me. It greatly reduced what I had to pay to PG&E for electricity, which is my return on investment. It also almost eliminated my vulnerability to frequent power failures by PG&E, which seem to occur about once per week. Most importantly for me, it reduced my personal impact on the environment.
Changing the financial benefits to consumers of the major investment that they made by tying up tens of thousands of dollars (or by incurring debe) is not only unfair to the individual consumer but it erodes consumers’ willingness to make such investments in the future. It unfairly transfers the benefits of those consumers’ investments in solar power to the share holders of private untilities. It represents more transfer of wealth from the many and to the wealthier few.
Private untilities have many possible ways to increase profits for their owners. Allowing their transmission equipment to age, fail, start fies, kill people, and burn down cities is one of them. Stealing the returns of small investors in solar power is just another form of corporate theft to benefit their owners. The private utilities in California need to look elsewhere than small solar power producers to make money. Try the old fashioned way – improve your buiness practices. And the elected government of California should not be an accomplice in this theft.
AB 942 breaks a commitment the state make with millions of solar owners. This is unbelievable and should be stopped!!
I was forced into NEM 3 due to my system being 20 years old. My average yearly true up was $2000 on NEM 2 (avg $166/mo) and now on NEM 3 I am a consistent $650/mo.
This is a scam. PG&E made 2.2 billion in net profit last year due to the last 8 rate increases.
Soon we will all turn off our systems so everyone will realize how much solar customers actually provide to the grid on a daily basis. They will have to buy emergency power from an outside party, and will see what it’s like to overpay for power.
Who are you paying that $600+ amount to each month PG&E or the outfit that sold you the Solar Panels & Installation in an installment plan?
~john
I oppose AB 942. I exported 2.5GWH last year.
We installed the system in 2023. We have not received the first check yet. PGE is greedy. Make it a state utility or vote for the other party to bring rices down
As a retired senior citizen I installed solar panels out of my retirement savings to stabilize my monthly utility power expenses. I did not buy solar batteries in NEM2 since they need to he replaced in about 10 years and the environmental nightmare for their disposal. I am on a fixed income unlike the politicians who get funded by their donors
Just a thought.
Can residential solar owners file a class action lawsuit against the CPUC, against the lawmaker(s) supporting this bill, and the utilities themselves for funneling money by efforts to pursue such nonsense?
Teach them all to stop the rate increases and stop filling shareholders pockets with value, and to instead look out for the customers they serve. The utilities also get a percent back, guaranteed by their requested and approved spending, so they’re incentivized to spend more to get more back in rates. How about they just get less back as profit and run lean. They do their jobs and get paid a lot. They don’t need to even be providing shareholder value. Now that I’m writing this, maybe they should all be dismantled and reborn as public services or Munis (like SMUD where the rates are way way cheaper).
IOU profits will never go down since the CPUC makes sure they get their contractual annual profit growth. So electricity consumers will never pay less ever. What has the IOUs attacking rooftop solar is that it’s more and more evident that every time an electricity consumer stops paying the IOUs, they have to get their profits from those left.
Any investor owned business is only focused on returning profits to those investors so the electricity consumers aren’t “customers” they are like the host to the leach.
The public needs the option to purchase local infrastructure and self generate and IOU investors needs to start bailing out of the business of profiting from electrical infrastructure. It’s now like the roads and other essential services.
I’ve exported 26k kilowatts into their grid since 2021. This bill is such a shafting to all California rooftop solar owners. How can they legally justify this???