California Solar Bill Faces Backlash from Housing and Labor Groups

SACRAMENTO, CA — AB 942, a bill pitched as a way to curb the growing cost burden on non-solar electricity customers, has passed the Assembly Committee on Utilities and Energy with vocal support from labor groups and ratepayer advocates. 

But as the bill moves to the Assembly Appropriations Committee, it faces growing resistance from a diverse coalition of opponents—including the Los Angeles Business Council (LABC), the California Association of Realtors (C.A.R.), and a coalition of 14 affordable and multifamily housing organizations—who warn that the legislation undermines housing equity, retroactively breaks contracts, and penalizes low- and middle-income homeowners.

Authored by Assemblymember Lisa Calderon (D-Whittier), AB 942 seeks to reform California’s decades-old rooftop solar incentive framework. Specifically, the bill would require new owners of properties with existing rooftop solar systems to adopt the state’s Net Billing Tariff rather than retain the more generous Net Energy Metering (NEM) terms originally agreed upon by prior owners. 

The bill would also eliminate the California Climate Credit for solar users—an annual rebate drawn from Cap-and-Trade revenues. Proponents argue these changes will reduce the financial burden borne by non-solar customers and better align costs across the state’s energy grid.

“As Californians experience electricity bill increases, AB 942 aims to minimize the cost shift on non-solar ratepayers from existing solar-panel subsidy programs,” said Calderon in a May 2 press release. “Our energy bills are becoming increasingly unaffordable, and we must address this ratepayer inequity.”

According to data from the Public Advocates Office, the cost shift attributed to rooftop solar subsidies rose from $3.4 billion in 2021 to $8.5 billion in 2024. AB 942’s backers estimate that the bill would save Californians $423 million next year and $3.6 billion through 2043.

But opponents view the measure as a fundamental betrayal of the promises that encouraged Californians to invest in rooftop solar systems in the first place—promises they say were designed to remain in place for the 20-year life of a system, regardless of who owns the property.

In a strongly worded letter dated May 16, the Los Angeles Business Council—whose members include utility giant Southern California Edison—outlined its opposition. “Breaking the solar contract at the point of sale will cause particular harm to lower-income families who financed their solar system with long-term financial arrangements,” wrote LABC President Mary Leslie. “AB 942 lowers home equity and especially harms low-income consumers.” 

The letter cites California Public Utilities Commission (CPUC) Decision 14-03-041, which explicitly stated that solar systems would remain eligible for NEM benefits even when transferred to a new owner or utility account at the same location.

The California Association of Realtors echoed this concern, arguing that the bill unfairly targets working families who sought to lower energy bills and increase home equity through clean energy investments. 

“Over the years, the average household income for solar users has lowered significantly due to the proliferation of programs that offer competitive financing and leasing options,” wrote C.A.R. legislative advocate Sean Bellach. “Instead of bringing down electricity costs to Californians, AB 942 will slice into the value of many working-class families’ home equity improvements involving solar”.

Affordable housing developers and advocates are also pushing back. A coalition including Eden Housing, EAH Housing, the Coachella Valley Housing Coalition, and the California Building Industry Association warned in a joint letter that AB 942 “will inject unnecessary uncertainty into housing transactions” and “raise the costs of utility bills for hard-working families who purchase homes with solar systems, and for renters who have no control over when their building is bought and sold.” 

The groups noted that denying solar customers access to the California Climate Credit—available to all other utility customers—is especially punitive. 

“It defies logic,” the letter states, “to withhold the Climate Credit from a residential customer that is actually producing clean energy onsite and still paying their monthly electricity bills”.

These opponents also argue that the measure represents a dangerous legal precedent by retroactively changing the terms of a state-sanctioned contract. The 20-year guarantee that has been cited in state law and regulatory guidance for over a decade is not merely a benefit, they argue—it is a binding legal understanding that formed the basis for millions of solar investments.

 “Reneging on two million contracts would not only be unfair but it would reduce energy choices for consumers, and threaten a promising solution to rein in future costs,” wrote the Los Angeles Business Council.

Underlying the debate is a deeper divide about the root cause of rising electricity rates. While AB 942 frames the solar subsidy structure as a central driver of inequity, opponents point to unchecked utility infrastructure spending. 

“More than 90% of the rate hikes over the last decade are driven by increased utility spending,” noted LABC. “PG&E, SoCal Edison, and SDG&E spending on poles and wires increased by 300% over the last twenty years, even though peak electricity demand was flat. Only 12% of that spending was for wildfire mitigation”.

California has long been a national leader in promoting rooftop solar adoption as part of its clean energy goals. As of 2025, more than two million homes in California are equipped with solar panels, with low- and middle-income families making up a growing portion of that base thanks to state incentives and financing programs like Power Purchase Agreements (PPAs), PACE loans, and Solar on Multifamily Affordable Housing (SOMAH) incentives.

Opponents of AB 942 fear that changing the rules now will damage California’s clean energy trajectory and severely weaken consumer trust. 

“AB 942 as amended would punish the very people California encouraged to invest in solar energy,” Leslie wrote. “It would gut consumer confidence and trust in government, right when we need more Californians to make the choice to invest in clean energy technologies”.

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