How will current legislation and trade tariffs play out for California solar?

Multiple bills affecting residential solar energy in California have been making their way through both the California State Assembly and the US Congress. Here’s a quick summary of where those bills stand today and how they could affect your decision to go solar or add energy storage to your existing system. 

At All Bay Solar, we are proud to serve the greater Bay Area and we believe in being our customers’ strongest advocates, while keeping everyone up to date on any policies affecting solar.

Here’s our summary of current legislation affecting California solar:

California SB 942

This bill would not end net metering overall, as some have suggested, but as amended would end net metering for homes with solar when the property is sold to new owners. Critics of the bill, who include pro-business as well as pro-environmental groups, say the bill would essentially break the contract between the state of California and consumers who have installed solar energy.

Current Status: Importantly, this bill is nearing a vote as early as this week. Whether you currently own a solar system or not, it’s important to encourage your state representatives to VOTE NO on SB 942. The Solar Rights Alliance makes it easy to do that here.  

This misleading bill, introduced by a former So Cal Edison executive Lisa Calderon, seeks to reframe the debate around solar in California. Proponents argue that solar owners should pay more toward grid and transmission line improvements, costs which are unfairly burdened by non-solar owners. 

The truth is, solar energy produced on California rooftops contributes financially to all utility customers by reducing the need to create more large-scale generation plants. One estimate analyzed the math underlying their supposition and concluded that the actual value of rooftop solar to ratepayers was $1.5 billion in 2024 alone.

When people make their own solar energy, it reduces the need for utilities to make and move electricity, which saves everyone money.
— Solar Rights Alliance

A recent report by the California Solar and Storage Industry found that the real source of rising utility rates is not rooftop solar but out-of-control utility spending and profits. Not surprisingly, the devil is in the details, as this article explains. 

The “big beautiful tax bill“

The residential Investment Tax Credit (25D) has long fueled residential solar demand and thousands of small businesses across the country. Originally scheduled to end in 2032, a  provision in the new Budget bill would end the 30% tax credit AT THE END OF 2025, as well as EV tax credits. A provision in the bill would also move up the timeline to end tax credits for new renewable energy power plants, requiring them to begin construction within 60 days of the enactment of the legislation and be in service by the end of 2028. 

Current Status: The bill passed the House by a narrow vote. The bill is now pending in the US Senate for consideration.

Repealing the tax credits that have been in place for solar for years undermines the ability of every American to take control of their energy future – and puts thousands of small businesses and jobs at risk across California and the US. To register your concern, and learn more, join the Defend American Energy campaign. It only takes two minutes.

How could trade tariffs affect California solar?

Separate from the Budget process, the President has called for aggressive new trade tariffs that will harm the solar industry and, if kept intact, will likely raise costs for solar energy in California.

The larger debate around tariffs centers on the fundamental desire to reduce the dependence on China as its main solar supplier. But the US has increased by sixfold the number of solar module manufacturers to correct this imbalance, with, at last count, 300 manufacturing plants having opened or announced imminent plans to open across the country. 

There is a need to preserve the incentives to allow a complete US supply chain to be built in the U.S., since sourcing other components from outside the US being penalized with excessive tariffs drives up the overall cost of solar.

American energy incentives have catalyzed a wave of new manufacturing facilities, good-paying jobs, and billion-dollar investments. Repealing them will undermine local economies in communities across the country.
— Solar Energy Industries Association

Bottom line: In California, solar delivers energy freedom, lowers costs and improves energy security

As you can see, the current solar policy picture is not simple to understand. But here’s what is: Solar energy and battery backup are still a smart investment for any California home. The underlying economics of solar and energy storage in California are strong. 

While new rules for net metering cut the amount participants can earn, the new net metering plan comes with higher electricity rates for times when demand is high and access to renewable energy is low, making solar batteries more valuable. Several other California incentive programs still exist, including a property tax exemption for solar energy systems (though it’s set to expire in 2027).

Utility customers of the state’s major investor-owned utilities — San Diego Gas & Electric, SoCalGas, Southern California Edison and Pacific Gas & Electric — are eligible to receive rebates for installing solar batteries through California’s Self-Generation Incentive Program. The California Public Utilities Commission offers a $150 rebate for each kilowatt-hour of your solar storage system with higher rebates ($850 or $1000 per kilowatt hour) if you meet certain income or geographic requirements.  

Local government and utility programs change regularly, so check program websites or reach out to us at AllBay Solar to make sure they are still active.

In California, solar energy powers more than 30% of the state’s electricity today, enough to provide clean energy to 15 million homes. We are still #1 in residential solar, providing 80,000 jobs and generating billions in local investments. But more is needed if we are to stay energy independent and reach the state’s climate goals – more important today than ever. Learn more, get involved and support Californians’ rights to energy freedom!

Reach out for help

For more information on going solar, or adding battery backup to your existing system, please reach out to the team at AllBay Solar. We would be glad to assist you and answer any questions you have.