No Solar Tax

California is the nation’s solar energy leader because of our commitment to policies that nurture and grow rooftop solar on homes, businesses, farms and schools. 

We’ve committed to these policies for good reasons. Rooftop solar helps us take on climate change and reduce our reliance on dirty and dangerous fossil fuels. It benefits consumers, too. Homes, schools and businesses that go solar reduce our need for grid investments today by generating more clean electricity close to where it is used. In 2018, state grid operators determined California could forego $2.6 billion in future spending on transmission and other grid projects largely due to increases in rooftop solar and energy efficiency.

Rooftop solar and storage help build the clean and resilient grid of the future that can better withstand wildfire season. Solar systems plus storage can help families keep the lights on during blackouts and save money on electric bills at the same time. 

Despite rooftop solar’s multitude of benefits – especially when it is increasingly paired with battery storage – the California Public Utilities Commission (CPUC) could reverse the state’s commitment to this indispensable renewable energy resource. The CPUC has proposed to gut the state’s bedrock solar policy and penalize consumers who want to invest in our clean energy future. 

The CPUC’s proposed decision would drastically cut net metering, which is the compensation for the extra clean electricity that solar customers send back to the grid, by about 88%. The proposal would also remove existing solar customers from their current net metering rate benefits five years earlier than the state promised. This would reduce the lifetime electricity bill savings for each of the state’s existing 1.3 million solar customers by up to 22%. 

In addition to these two draconian changes, the CPUC is proposing a solar tax. The proposal would penalize consumers for investing in our clean energy future by charging a solar tax of $57 a month on average. That’s more than $600 a year for investing to make our environment,  climate, and electric grid cleaner and more resilient. This solar tax is a direct disincentive to install solar and to pair it with battery storage. 

California should be doing more, not less, to empower and encourage consumers to invest in clean energy. 

If you’re reading this and thinking to yourself, how is a solar tax even legal? It’s not. 

In fact, a federal law – the Public Utility Regulatory Policies Act (PURPA) – protects consumers’ right to go solar without having discriminatory fees added to their utility bills. 

Unfortunately, this hasn’t stopped utility companies in other states from trying to levy illegal solar penalty fees. For example, Kansas’ utility regulator approved a utility-driven solar-only fee that deterred consumers from investing in panels. In April 2020, the Kansas Supreme Court ruled that the utility and the regulator had engaged in illegal price discrimination against solar customers. In Alabama, the Southern Environmental Law Center is suing the Alabama Public Service Commission for their approval of monthly solar-only fees. In October of 2021, the Arizona Corporation Commission removed a solar-only grid access fee that was placed on consumers by Arizona Public Service. Just this year, a federal appeals court ruled that the Salt River Project in Arizona has been unfairly charging rooftop solar customers higher electricity rates to deter consumers from going solar. 

Regulators here in California shouldn’t make the same mistake of imposing a solar tax on rooftop solar customers. 

It’s no coincidence that solar taxes are popping up in states across the country. Our recent report, Blocking Rooftop Solar, pulled back the curtain on the playbook used by utility companies and pro-fossil fuel lobbying groups to undermine rooftop solar. A major tactic in that playbook has been to impose high fixed fees on consumers with solar, just like the solar tax being proposed here in California. 

The CPUC’s currently proposed decision is unacceptable. The state needs to remove a solar tax from its plans and ensure that solar and solar plus storage can continue to pencil out for all consumers. 

Help save rooftop solar by telling Gov. Newsom and the CPUC ‘no solar tax’.