An amended bill that would end net metering for homes with solar once they are sold passed the California State Assembly’s Utilities & Energy Committee.
The California State Assembly’s Utilities & Energy Committee voted 10-4 to pass an amended version of Assembly Bill 942, which seeks to cut compensation rates for existing rooftop solar customers that send electricity to the grid.
The bill requires that homes with rooftop solar that are sold or transferred must be shifted off their net energy metering plans, damaging the expected bill savings from the system.
AB 942, as originally prosed, sought to sunset net energy metering (NEM) for homeowners that have purchased and installed solar under the NEM 1.0 and 2.0 rate plans within a 10-year window. As proposed the bill would have forced customers onto NEM 3.0, which pays about 80% less for electricity sent to the grid, making electricity bill savings from investing in solar more difficult to achieve.
The amended bill removed the 10-year sunset for all customers, but retained the requirement that sold or transferred homes must be shifted onto NEM 3.0.
Brad Heavner, executive director of the California Solar and Storage Association (CALSSA) said the bill “breaks contractual promises with millions of solar users.”
An average rooftop solar customer would see their home’s electricity bills increase by about $63 per month after selling or transferring their home, presenting a potential sticking point in a real estate transaction.
An amended, AB 942 would be “unworkable in practice, putting utilities in the position of verifying real estate transactions,” said Heavner.
“Messing with home values and the transferability of property has long been considered a dangerous “third rail” for California politicians, and this interference is no different,” he said.
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.
“AB 942 backers claim it is intended to lower energy rates, but it is actually designed to protect utility profits. The real reason electricity rates keep skyrocketing in California is out of control utility spending on transmission infrastructure,” said Heavner.
According to the California Public Utilities Commission, 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%.
“For-profit utilities get a lucrative guaranteed profit return on infrastructure spending, which provides an ongoing motive to keep spending more,” said Heavner.
Rooftop solar was estimated to save all California ratepayers, including non-solar customers, $1.5 billion in bills in 2024 alone. However, rooftop solar represents direct competition to the profit model for the state’s largest investor-owned utilities, which has placed it in the crosshairs as a regulatory scapegoat.
“In solar, California leads. If this bill makes it to [California Governor] Newsom’s desk, we expect other states will be emboldened to take similar actions,” said Fox Swim, senior solar industry researcher, Aurora Solar. “What we should really be doing is incentivizing residential solar plus storage for its environmental and reliability benefits.”
