STATEMENT: California utility commission votes for damaging rooftop solar decision

Media Contacts

CPUC votes to cut California’s solar incentives, threatening clean energy progress

LOS ANGELES — Under a revised decision finalized by the California Public Utilities Commission (CPUC) Thursday, effective April 2023, new California solar customers will suffer a sudden 80% cut in a key solar incentive.

The CPUC’s “revised decision” contained only minor changes from the commission’s November draft. Clean energy advocates warned that the proposal would discourage Californians from “going solar” at a time when the state needs more, not less, renewable energy to replace polluting fossil fuels. 

California compensates current solar customers for excess power they generate and sell back to the publicly accessible grid under an incentive program called “net energy metering (NEM).” The commission vote means that in April, new solar customers will get an 80% lower net metering credit, with steeper cuts to come in subsequent years. 

History shows that when drastic cuts are made to NEM programs, people stop putting panels on their rooftops. Nevada’s January 2016 cut to NEM compensation led to a 47% reduction in residential solar installations year over year. After Nevada restored net metering in September 2017, residential solar adoption returned to its earlier level after two years. California’s Imperial Irrigation District abandoned net metering in July 2016, causing residential solar installations to decline 88% over two years.

Although California produces more solar energy than any other state, it will need to quadruple its rooftop solar capacity to meet its climate and clean energy goals, including generating 100% of its power from clean energy sources by 2045. With drastically lower incentives, many Californians may be unable to afford the upfront costs of this technology that has so many long-term benefits.

The final decision is not as egregious as an initial proposal put forward last year. Like the November draft, it still honors existing net metering compensation agreements. Also, it does not include an unfair “solar tax” or grid-participation fee for people with their own solar panels.

In response, Environment California State Director Laura Deehan and Johanna Neumann, Senior Director of the Campaign for 100% Renewable Energy at Environment America released the following statement: 

“It’s devastating to see California’s Utility Commission vote to dismantle solar incentives that have made California the nation’s leader in solar power,” said Deehan “Rooftop solar is a critical part of our clean energy transition, and we need to accelerate deployment. Governor Newsom and the CPUC should be making clean energy more accessible and affordable so that rooftops across the state can catch the sun to power our lives. This misguided decision, which undervalues solar’s numerous benefits for all Californians, will dim the lights on the growth of solar in the Golden State.”

“Given our urgent need to transition to clean energy it’s mind-boggling that America’s undisputed solar leader is cutting solar incentives,” said Neumann. “Without robust alternatives in place to make sure rooftop solar can thrive, this decision by the world’s 4th-largest economy puts the future of one of America’s best and most popular clean energy technologies at risk. Given what we know about all the clean air and climate benefits that come with rooftop solar, this decision in California flies in the face of the state’s climate and clean energy goals.”