Legislative Spotlight: Rooftop Solar Equalization with AB 942 

One of the little-known stories of the solar industry is how for the past 30 years all California rate payers have been subsidizing homeowners’ rooftop solar. Originally, the 20-year payout was designed to encourage solar use, but now those kind of incentives are no longer needed. 

To fix this inequity, Assemblymember Lisa Calderon (D-Whittier) introduced AB 942 to minimize the cost shift on non-solar ratepayers from existing solar-panel subsidy programs to 10 years. This bill promises a cost savings for California consumers by reforming the Net Energy Metering (NEM) rules. 

The legislation recently passed out of both the Assembly’s Appropriations Committee and Utilities & Energy Committee. You can learn more about AB 942 in this op-ed in the Sacramento Bee. 

Why AB 942 is important: 

• Fair Transition for Non-Solar Ratepayers: AB 942 seeks to alleviate the financial burden on non-solar ratepayers by transitioning Net Energy Metering (NEM) customers to the Net Billing Tariff (NBT) after 10 years, instead of the current 20 years. This change, along with new property owners adopting the NBT, is projected to save ratepayers approximately $922 million in 2026.  

• Elimination of Inequitable Subsidies: The bill proposes to eliminate the California Climate Credit for solar customers, further reducing costs for non-solar ratepayers. This is estimated to save ratepayers $220 million in 2026 and $1.1 billion from 2026 to 2030, promoting a fairer distribution of costs associated with solar energy subsidies. 

 • Support for Renewable Energy Growth: While AB 942 implements necessary reforms, it maintains strong incentives for new solar installations under the NBT, ensuring California’s commitment to expanding renewable energy sources. The bill is projected to save non-solar ratepayers approximately $1.3 billion in 2026 and $58 billion by 2043, providing essential relief for Californians facing rising energy costs while supporting the ongoing growth of renewable initiatives critical for our climate goals. 

We will keep you posted on the status of this bill.