The California State Assembly's Appropriations Committee has passed a bill that would greatly affect solar power customers in the state, reported Canary Media.
What's happening?
Introduced by assemblymember Lisa Calderon, Assembly Bill 942 aims to reform Net Energy Metering by ending legacy NEM contracts after 10 years. This would require new property owners to switch to the current NEM tariffs, which would pay homeowners significantly less for their solar power energy.
Net metering offers credits to solar energy system owners for the electricity they add to the grid. It essentially allows homeowners with solar panels to trim their energy bills thanks to the excess electricity generated by their panels.
They can then use those credits to offset their electricity consumption when their panels are not producing enough power, such as at night or on cloudy days.
The bill also seeks the elimination of solar credit allocations to NEM customers. According to Brad Heavner, executive director of the California Solar and Storage Association, this could greatly impact the real estate market.
"A lot of homeowners are selling solar as a positive feature, which makes perfect sense. It's a valuable asset," Heavner told Canary Media.
"If the buyer doesn't get the same value, they'll be underwater on the lease. That would either force you to lower the price, or more likely, force you to buy out the lease," added Heavner. "If you suddenly have to buy out the lease, you've suddenly lost a lot of money."
Why did Calderon introduce AB 942?
In a press release, Calderon's office said that the legislation would help reduce monthly electric bills for residents throughout the state. According to EnergySage, the average electricity rate for homeowners in California is 30 cents per kilowatt-hour. That is 57% higher than the national average rate of 19 cents per kilowatt-hour.
Calderon points to a "significant shortfall of the electric grid maintenance costs" that needs to be addressed in order to lower those high electricity rates.
"Solar power is an important part of our state's renewable energy grid, but we have to reevaluate how our current solar subsidy programs impact Californians who may not be able to afford solar-panel systems," Calderon said in a statement.
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Every day 😥 "Our energy bills are becoming increasingly unaffordable, and we must address this ratepayer inequity."
What's being done about AB 942?
In a study released by M. Cubed Consulting, it was reported that two million rooftop solar consumers in California saved all other ratepayers around $1.5 billion in 2024. Despite this, AB 942 could possibly eliminate those savings.
In a letter requesting the rejection of the "irresponsible bill," dozens of California environmental justice and community organizations voiced their concerns. The group writes that if AB 942 passes, it would reverse "California's call to invest in clean energy as a way to reduce peak demand, stabilize rates, and clean up the air."
In an effort to provide a counterargument against the bill, the group points to energy companies themselves as the biggest reason for the rapid increase in energy rates. The group argues that "California must focus on what's really wrong with our energy system: uncontrolled utility spending and record utility profits. We'll never control rates or meet our goals for clean, reliable energy if we don't get at these roots of the problem."
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