In a major win for homeowners in California, the State Supreme Court ruled that utility companies will have to increase payments to homeowners for excess power generated by rooftop solar panels.
As LAist reported, in 2022, state regulators decided to cut payments by 75% to homeowners who produced excess power for the electrical grid. The change was supposed to reduce energy bills across the board while still supporting renewable energy upgrades.
Three environmental groups — the Center for Biological Diversity, the Protect Our Communities Foundation, and the Environmental Working Group — sued the state, arguing that low-income communities would be left out if payments were cut.
"We don't need [to be in] an affordability crisis if we have more local generation," Roger Lin, senior attorney for the Center for Biological Diversity, said.
Under a program called "net energy metering," utility companies pay solar owners for the extra power they generate each month. In prior versions of the program, utilities paid solar customers a retail rate for their excess energy, the same price companies would charge other consumers when they resold the energy.
But with the new program, "NEM 3.0," customers receive the new, lower rate, which equals how much utilities save by not buying the power from the market.
Customers who opted into the program after 2023 got the new rate, while customers under the other versions will keep receiving the old rate for about 20 years. Utility commissioners ruled that since customers without rooftop solar have to pay more, solar customers should not get as much back each month from power generated.
However, with more solar coming online all the time, the environmental groups said the concerns are "overblown."
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While justices did not rule on whether changes made to the solar program are legal, and will leave that to the lower courts to decide, the ruling could have significant positive impacts for California homeowners, whether they have solar or not.
If you're ready to go solar, you can check out EnergySage, which offers free tools that allow you to compare prices between vetted contractors and save up to $10,000 on installation fees. The company also has a mapping tool where you can see the average cost of a solar system and incentives based on your state.
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Definitely 👍 With these tools, you can find the best deal on a system to suit your needs. To make the benefits go even further, you may also want to install a heat pump to cut your energy costs more. EnergySage provides another tool that lets you find a heat pump installer, making it a one-stop shop for all your home energy upgrades.
But if you want to make energy-efficient home improvements, make sure to do so before the end of 2025, as that's when the 30% solar tax credit is expiring.
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