California Supreme Court to Hear Appeal on Solar Panel Reform

In 2022, the California Public Utilities Commission (PUC) approved version three of the state’s net energy metering program. The new guidelines, otherwise known as NEM 3.0, garnered immediate controversy and pushback from solar consumers and solar industry groups alike.

Under NEM 1.0 and 2.0, homeowners with rooftop solar panels were paid market rate for any surplus energy they produced beyond their consumption. Under NEM 3.0, new solar customers are paid “actual value” for their surplus energy, which is a substantially lower rate. As a result, payouts to these customers are currently around 75% lower than they were under previous versions of NEM.

As a result, the California Solar & Storage Association reports that new solar installations dropped by 66% from February 2023 to February 2024.

That could all potentially change this year, as the California Supreme Court has agreed to review the case challenging the NEM 3.0 reforms.

The challenge is spearheaded by the Protect Our Communities Foundation, the Environmental Working Group and the Center for Biological Diversity, who argue that the PUC failed to consider the full impact of such drastic changes to the net metering policy.

A ruling by the Supreme Court that substantially weakens or repeals the payment rollbacks would be a huge boost to the California solar industry at a time when the state is working to eliminate its net carbon energy footprint.

Regardless of how the case shakes out, solar energy – whether in the form of residential rooftop installations, commercial and industrial building installations, or community solar projects – will continue to play a central role in California’s groundbreaking transformation to a 100% clean energy state.