SAN FRANCISCO— In a victory for renewable energy, the California Supreme Court ruled today that an appeals court should not have deferred to state utility regulators who decided the latest rooftop solar policy complies with state law. The updated policy slashed the credit new solar users get for sharing excess energy with the grid.
Today’s decision sends the case back to the state Court of Appeal to consider whether the California Public Utilities Commission’s policy is unlawfully harming rooftop solar growth, especially in disadvantaged communities.
“I’m relieved to see the state’s highest court rein in this runaway commission, which is putting corporate utilities ahead of Californians’ pocketbooks, the climate and the law,” said Roger Lin, a senior attorney at the Center for Biological Diversity. “Commissioners are hobbling the renewable energy transition by mischaracterizing critical opportunities for local power generation and conservation. This is outrageous when so many people are struggling to pay their electric bills. I hope this ruling prompts regulators to craft a new rooftop solar policy that’s in the public interest rather than padding fossil fuel utility profits.”
In today’s ruling, the high court agreed that the appeals court had overlooked the California Legislature’s 1998 direction to limit deference to regulators, rejecting arguments from the utility commission and the three large investor-owned utility companies in California — Pacific Gas and Electric Company, Southern California Edison and San Diego Gas and Electric Company.
The commission’s updated net-metering policy, which took effect in April 2023, slashes customer credits by up to 80% for electricity generated on rooftops and sold back to the grid, reducing the financial benefit of installing solar systems. In 2022 the Center for Biological Diversity, The Protect Our Communities Foundation and the Environmental Working Group challenged the state’s new policy.
The policy has stalled efforts to expand rooftop solar in California and led to huge layoffs in the solar industry. It also violated state law, which requires that the commission ensures the rooftop solar market keeps growing, particularly in low-income communities and those of color.
“California needs a large, thriving rooftop solar market to meet its clean energy goals,” said Bernadette Del Chiaro, senior vice president for California with Environmental Working Group. “The market is currently being stifled by the CPUC's misguided NEM 3 decision threatening to undermine not only consumer choice and grid stability but also the state’s ambitious clean energy goals. We look forward to spotlighting just how illegal and out of step with California the CPUC has become.”
“The CPUC focused exclusively on reducing demand on the utilities’ system and refused to consider the benefits of customer-provided electricity for the resiliency of the electrical system as a whole, and the ability to quickly and affordably provide the electricity to support electric vehicles, HVAC systems, and other beneficial uses of electricity on site,” said Malinda Dickenson, legal and executive director of The Protect Our Communities Foundation, who argued the case before the Supreme Court. “The Legislature has been clear that customer-generator’s rooftop solar facilities benefit ratepayers and California’s electrical system and must be accounted for.”
The Court of Appeal will rehear the case to determine whether the commission had any legal basis to make the cuts to rooftop solar and whether the commission designed a policy that will keep rooftop solar growing in environmental justice communities, as state law requires.
