The California Supreme Court is poised to hear oral arguments in a lawsuit filed by environmental groups, which claims that regulators unjustly reduced credits for homeowners with solar panels. This legal battle seeks to restore more financial benefits to those who have invested in rooftop solar energy.
The lawsuit arises from a policy change enacted by the California Public Utilities Commission (CPUC) in April 2023. Previously, homeowners who generated surplus energy from their solar panels could send this excess back to the grid and receive credits that were nearly equivalent to the market rate for electricity. However, under the new regulations, the CPUC significantly decreased the reimbursement rate, in some cases by as much as 80%.
According to Bernadette Del Chiaro from the Environmental Working Group, “Now, what people get is about five cents per kilowatt hour.” This is a dramatic drop from nearly 40 cents, making solar energy investments considerably less appealing. Del Chiaro points out that the ramifications of this decision have been dire for California’s solar industry. “We’ve seen the market just totally crater and not rebound,” she remarked, noting the loss of 17,000 well-paying jobs and the bankruptcy of numerous companies.
In addition to economic implications, critics argue that the CPUC’s decision undermines California’s climate objectives. Howard Crystal emphasizes that the current regulations make it increasingly difficult for lower-income Californians to adopt solar energy. “It’s going to be much harder for them to make those investments, and we’re not going to get rooftop solar to these new communities where they could really benefit,” he stated.
On the other hand, some lawmakers believe the CPUC’s ruling doesn’t go far enough. Recently, the California Assembly passed a bill authored by Assemblymember Lisa Calderon, which aims to further reduce solar compensation. Calderon argues that the current system raises electricity costs for those without solar panels, stating, “We’ve got to find a way to make this more equitable and fair.”
Crystal, however, believes that the previous system was adequate and is hopeful that the state Supreme Court will ultimately side with the plaintiffs in the coming months. “There’s nothing wrong with rooftop solar,” he asserted. “It’s bringing everything positive. It’s bringing energy democracy. It’s bringing energy to communities.”
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