The California Public Utilities Commission (CPUC) has issued a new proposed decision in the ongoing community solar proceeding, a move that the Solar Energy Industries Association (SEIA) says “virtually ensures” that no new community solar projects will be developed in the state.
CPUC’s proposed decision rejects the solar industry-backed Net Value Billing Tariff (NVBT), a rate designed to base electric grid export compensation on the hourly value of the energy produced. Advocates say NVBT is essential for securing private financing, particularly for community projects serving low-income subscribers.
However, the CPUC has rejected this in favor of a structure based on the Avoided Cost Calculator (ACC). The metric estimates what the utility “avoids” paying to buy power elsewhere. Solar industry advocates argue the ACC rate is far too low and volatile to support new construction, essentially killing the market before it begins.
The proposed decision issued by Administrative Law Judge Valerie Kao comes at a time when California is facing record-high energy prices. Industry advocates voiced hopes this round of the proceeding would correct flaws in the 2024 framework, but SEIA argues the commission has “wasted a golden opportunity” to provide relief to low-income residents.
The decision maintains the commission’s focus on avoiding “cost-shifting” to non-participating ratepayers, a position heavily supported by investor-owned utilities (IOUs) like PG&E, SCE, and SDG&E.
The debate around community solar program structuring mirrors the proceedings of rooftop solar grid compensation rates. Utility-backed analysis said that rooftop solar caused an $8 billion cost to non-solar customers in 2024, while independent analysis found a $1.5 billion net benefit to California electric ratepayers.
Critics of the proposed decision say it also relies too heavily on one-time federal funding, specifically the $249 million Solar For All grant awarded to California by the EPA. The Coalition for Community Solar Access (CCSA) argued this is an unworkable substitute for a market model that leverages private capital.
Instead of a new market-based tariff, the commission opted to modify existing utility-led “Green Tariff” programs. The decision also consolidates existing programs and discontinues the Community Solar Green Tariff (CSGT) for new projects, transferring its capacity to the Disadvantaged Communities Green Tariff (DAC-GT), while requiring that 51% of program capacity be dedicated to low-income subscribers.
“With this proposed decision that crushes any chance of a viable community solar program in the state, the CPUC has doubled down on its past bad decisions at the behest of monopoly utilities,” said Stephanie Doyle, California State Affairs Director for SEIA. “The state legislature made it clear in passing AB 2316 that it wants a robust program… instead, the CPUC has issued a decision that virtually ensures no projects will be built.”
The proposed decision is not yet final. It is scheduled to be heard at the Commission’s May 14, 2026, Business Meeting at the earliest. Until then, solar advocates say they will continue to push for a model that allows renters and those without suitable roofs to access the benefits of clean energy.
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we need to lower our soft costs in the US. and when we do that, we say to hell with the CPUC and the utilities. We don’t need military subsidies, we don’t need international tax subsidies, we don’t need the f**kin utility subsidies. We will compete against rising utility bills (30% minimum, likely 100% over the next 5 years, you know I’m right!) with our solar solutions at our delivered cost of 3-5 cents. And we can deliver that value in less than 18 months for the largest of projects. Keep the utility focused on improving their shit grid. We will be easily taking over 50% of demand over the next 10 years without them. WE DON”T WANT YOUR SAUDI MONEY!!
Yes sir. Power to the people. Not utilities.
Great news
I am not a scientist, engineer or business person… Sometimes, I’d wonder if a newest great renewable “energy” find, “for all”, helping “all”, while preventing harm or loss, is doing some other general harm I didn’t know about, – and I would have to rethink and rearrange what I do, to avoid contributing to that – maybe, giving up some one? green part of it…
— Then I think of the Energy Business, which sometimes is uncertain it can find more ways to continue to be a monopoly.
The concern raised in this decision is valid—if the program structure makes projects uneconomic, the market simply won’t respond. Capital flows where there is clarity, bankability, and speed to execution.
That said, this moment may actually highlight a more scalable path forward for California:
Behind-the-meter distributed energy + microgrids
Rather than relying solely on front-of-the-meter community solar constructs that depend heavily on utility program design, California should lean into localized, customer-sited generation paired with storage—especially where it directly offsets load and avoids grid friction.
Where this works immediately:
Residential subdivisions (new construction)
Pre-integrated solar + storage microgrids
Reduces interconnection complexity at scale
Aligns with builder-driven deployment models
Schools and universities
Large daytime loads + public benefit alignment
Ideal for resiliency hubs and emergency backup
Hospitals and critical infrastructure
Reliability is non-negotiable
Microgrids provide energy security + cost control
Commercial centers (malls, logistics, campuses)
High load density with available rooftop/parking canopy space
Strong economics with storage arbitrage
Industrial users
Demand charge reduction + operational continuity
Increasing interest in energy independence
Why this model works:
Bypasses program dependency
Projects are driven by customer economics, not tariff uncertainty
Eliminates interconnection bottlenecks (in many cases)
Especially when structured as load-serving microgrids
Financeable today
With tools like C-PACE, tax credit transfers, and long-term energy service agreements
Aligns with grid realities
Reduces strain on transmission while adding local resiliency
The opportunity:
If California wants distributed energy to scale, the focus should shift from program design → deployment enablement:
Streamline permitting for microgrids
Clarify rules for multi-meter / multi-tenant behind-the-meter systems
Enable aggregation of distributed assets into market participation (RA, DR, etc.)
Support standardized financing structures
Bottom line:
If the current community solar structure isn’t viable, the solution isn’t to pause deployment—it’s to pivot toward models that are already working.
California doesn’t have a resource problem.
It has a structure and execution problem.
Behind-the-meter microgrids can bridge that gap—today.
There is no reason to subside home solar. It causes poor people to pay more and subsidizes the rich. It s morally bankrupt
If community solar programs are not producing financeable outcomes, the solution is not to pause deployment—it’s to shift toward models that deliver the same benefits through infrastructure.
Multi-tenant behind-the-meter microgrids and community-scale microgrids can provide shared access to clean energy, bill savings, and resiliency—without reliance on complex tariff structures.
In practice, these systems function as “physical community solar,” but with stronger economics, faster deployment timelines, and greater reliability.
Cost shifting , free ride on others? These are my main reasons for opposition to “green” technologies. I have worked on economically viable solar installations in remote locations. To truly replace fossil fuels, solar costs must include storage. If you depend on the grid every night, you need to pay for that reliability, it does not come free.
Let’s get balcony solar passed. At least it’s a start for low income renters and people who can’t afford rooftop solar