A major legal victory for rooftop solar fans
Rooftop solar owners in California have just scored a big win. Years of lawsuits have culminated in the state Supreme Court ruling in favor of homeowners and environmentalists, declaring that lower courts must give increased scrutiny to decisions made by the California Public Utilities Commission (CPUC).
It was unanimous among all seven justices that the CPUC, the energy utilities’ regulator, should no longer be given the high level of deference it has enjoyed. This has the potential to have far-reaching consequences for Californians who generate their own electricity and require more reasonable compensation for the energy they transmit back into the grid.
What the case is about
At the center of the case is the CPUC’s 2022 decision to overhaul California’s net metering policies. Under the old framework, homeowners with rooftop solar panels were credited at the same retail rate they paid for electricity from the grid. That enabled solar owners to essentially offset their bills dollar-for-dollar with the energy they generated.
The new rules changed that dramatically. Instead of retail prices, utilities were required to pay homeowners only the wholesale price of electricity—the much lower figure utilities would spend on the open market.
Critics contended this slashed payments to solar homes, making rooftop solar less affordable for middle- and low-income families. Indeed, applications for connecting new solar systems to the grid declined more than 80% after the rule change, according to data cited by CalMatters.
Why the court stepped in
Environmental groups, including the Center for Biological Diversity and the Environmental Working Group, challenged the CPUC’s decision, arguing that the agency was prioritizing utility profits over public interest.
The Supreme Court agreed that the previous standard of scrutiny of CPUC actions gave the agency too much unchecked power. In discarding that standard, the justices opened the way to greater accountability. The case is sent back to a lower court, which must rehear the rules under the tougher legal test.
This is a huge step forward,” said Roger Lin, senior lawyer at the Center for Biological Diversity. “It reins in a runaway commission that has been putting corporate utilities ahead of Californians’ wallets and the climate.”
What will it mean for homeowners?
The ruling does not immediately overturn the current reimbursement policy. But it opens the door for homeowners and advocacy groups to more easily sue CPUC decisions in court. If the lower court decides the 2022 regulations are unlawful, solar owners could once again be paid more for their surplus energy.
In the short term, the decision brings relief to the thousands of Californians who have put rooftop solar on their homes as a way to cut bills and cut carbon. It also serves as a message to regulators that their policies will be more closely scrutinized going forward.
The bigger picture: clean energy goals at stake
California has aggressive goals to transition to clean energy and cut greenhouse gas emissions. Rooftop solar is critical to reaching those objectives. The problem is, when policies make solar less economical, fewer homeowners will invest.
The precipitous decline in new installations since the CPUC rule revision demonstrates this tension. In discouraging homeowners, the state will lose out on valuable clean energy that would have contributed to powering the grid during periods of highest demand.
The Supreme Court ruling is a chance to restart and craft policies that balance utility interests with consumer equity and environmental objectives, say advocates.
What’s next
The lower court will now review the CPUC’s rules under the new, tougher standard. That may take several months, and it remains to be seen what the final outcome will be. But for now, rooftop solar owners in California have a big win to celebrate.
Even as the court fight continues, homeowners still have the option to reduce energy bills and enjoy the advantages of incentives. Federal tax credits of 30% of installation costs are still available through 2025, and no-money-down lease plans are available from some firms to make solar more affordable.
No matter if the rules change or not, the court ruling ensures a bigger spotlight on the CPUC and a louder voice for Californians in their desire to be part of the clean energy revolution.
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