The fate of California’s wildly successful rooftop solar incentives will be decided in court

More than 1.5 million homes and businesses have installed solar panels in the Golden State, thanks in large part to the net metering incentive program. If the lawsuit succeeds, rooftop solar installations could continue to grow rapidly, as they have for the last decade — meaning more clean electricity generated on urban buildings and parking lots, and less reliance on monopoly utility companies building long-distance power lines to carry electricity from large solar farms in the desert.

If the lawsuit fails and reduced incentives remain in place, rooftop solar installers expect a steep decline in business. That could mean more large solar farms and lengthy transmission lines — and higher profits for the utility companies building them.


It’s the same conundrum Adam Smith wrote about, the harm that the Corn Laws did. Farmers liked the Corn Laws, the People did not. Higher prices.

The Captain


The California Public Utilities Commission (CPUC) has released a proposed decision that is expected to be harmful to the value of rooftop solar for renters in multifamily housing, farms, and schools.

The decision sets hard limits on how much electricity produced by rooftop solar can be self-consumed by multi-meter properties. The policy effectively forces customers to first sell their solar production to the utility, and then buy it back at higher rates

California’s rooftop solar market has already taken heavy blows to demand in recent months as Net Energy Metering (NEM) 3.0 was implemented, a move that dramatically slashed compensation rates for exporting excess solar production to the grid.



Why is that a problem? If it was your business interests it would be a solution.

In every instance Friedman came up with such arguments Samuelson proved with metrics that Friedman was wrong. Why give us wrong answers?

If you want to get solar panels on your California home today, you’ll be signing up for a new program called Net Billing. Net Billing is the new version of an older program called Net Energy Metering (or NEM). You may have heard Net Billing called NEM 3.0 because it is the third version of California’s distributed solar policy, but that name is no longer accurate.

The Net Billing program allows home and business owners to use their solar panels to power their homes and also interconnect with the electric grid to get paid for any excess electricity they don’t use right away.

Here are the main features of Net Billing for homeowners:

  • When you get solar installed, you must sign up for a new electric rate plan with rates that change based on the season and the time of day. These rates range from 10 to 65 cents per kilowatt-hour, depending on your utility and the time of day.
  • When your solar panels generate electricity that is used in the home, it reduces your bill by the retail value of the energy you would have purchased from the utility.
  • If your solar panels generate more electricity you use, the excess is transmitted to the grid. You earn a reduced credit for this energy based on a complicated formula, but it averages around 5 to 6 cents per kilowatt hour.
  • Because of the greatly reduced credit offered for excess solar energy, Californians can get similar financial benefits by adding a battery and self-consuming more of their own energy.

Although NEM 3.0 isn’t as good as NEM 2.0, you can still save money with solar on a Net Billing plan. But you have to be smart. Pick the right installer and get the right solar installation for your needs.


The case has now made it to the California State Supreme Court.