The California State Assembly has approved a bill that would force individuals purchasing properties with solar projects into new net billing scenarios, which would likely reduce compensation for their energy exports. Assembly Bill 942 is now heading to the California State Senate.
If enacted, AB 942 would require that properties with renewable energy projects, like solar arrays, be transferred from their existing net-metering contracts into NEM 3.0 in an attempt to resolve the “cost-shift” of utility expenses onto non-solar electric customers. If passed by the Senate and signed by the governor, this would take effect starting on January 1, 2026.
“Throughout the process, Assemblymembers commented how they heard more opposition to AB 942 than any other bill this session,” said Brad Heavner, executive director of the California Solar & Storage Association (CALSSA) in a press release. “That opposition will only grow louder when AB 942 moves to the Senate and Californians continue to make their voices heard against a bill that would undermine property rights, reduce home values, and jeopardize the state’s clean energy future.”
NEM 3.0 altered compensation rates for energy exports in excess of an individual’s electricity consumption — calculating compensation based on avoided energy costs at certain times of day. This shift in net billing reduced compensation by up to 75% compared to previous net metering scenarios.
AB 942 was introduced by Assemblymember Lisa Calderon (D) in February. Initially, the proposed bill would have reduced net billing contract terms from 20 to 10 years. Calderon formerly worked as a government affairs director for Edison International, a electrical utility company.
While the bill states that rooftop solar has played a crucial role in moving toward the state’s clean energy goals, it also states that California subsidies for rooftop solar have created “a significant shortfall for covering the fixed costs of the electrical grid, and nonsolar ratepayers make up the difference.” CALSSA denies the claim that solar has harmed the grid, and points to utility spending as the culprit.
“The utility story that solar customers are all wealthy and save too much money is also false,” Heavner said. “Solar is predominantly adopted by working class customers seeking to stabilize theri energy costs and support California’s clean energy goals.”
