California hosts over two million rooftop solar installations across homes, schools, and businesses. These customers invested significant funds or signed long-term contracts, expecting stable electricity costs for over 20 years. Net energy metering (NEM) has allowed them to export surplus daytime solar energy to the grid, earning credits to offset their bills.
“AB 942 is a direct attack on California families who made long-term investments in solar with the promise of fair, 20-year Net Energy Metering agreements—guarantees that were clearly outlined in the state’s own consumer protection documents,” said Steve Campbell, Western Regional Director, Vote Solar.
In April 2023, California introduced NEM 3.0, a net billing tariff that reduced export credits for new solar customers by approximately 80%, lowering the average export rate from $0.30 per kWh to $0.08 per kWh. This change significantly impacted the rooftop solar market, as the financial return on new installations diminished. AB 942 now proposes to apply these reduced rates to existing customers.
Under the proposal, starting July 1, 2026, customers under NEM 1.0 or 2.0 for 10 or more years would transition to NEM 3.0. An average household consumes 870 kWh monthly, with solar customers typically exporting 20% to 40% of their production. With a 30% export rate, the proposed changes would lead to the $63 monthly bill increase.
“More than a million Californians signed contracts and state-issued guides in good faith, trusting that regulators would keep their word,” said Campbell. “Retroactively breaking those agreements would set a dangerous precedent for all consumer protections in California.”
Introduced by Assemblymember Lisa Calderon, the bill has sparked concern. A letter signed by nearly 100 organizations opposes AB 942, arguing it would raise costs, limit consumer options, and hinder California’s clean energy goals. The letter emphasizes that rising electricity rates stem from excessive utility spending and profits, not rooftop solar.
Rooftop solar is estimated to save all utility ratepayers, including non-solar customers, about $1.5 billion in 2024. However, the California Public Utilities Commission notes that the state’s major utilities—PG&E, SCE, and SDG&E—have increased rates by 110%, 90%, and 82%, respectively, over the past decade, despite stable electricity consumption.
