California Senate Drops Plan to Break Solar Contracts

The California Senate has dropped a controversial provision of a solar law that would have broken long-standing contracts with homeowners who sell excess solar power to the grid. The provision, part of AB 942, aimed to address concerns from regulated utilities but faced public backlash and protests. The law would have broken contracts for 2 million homeowners who signed 20-year terms with solar companies. The decision removes a major sticking point in the legislation, which aims to reform the way California treats contracts for residential solar.

The California Senate has removed a contentious provision from Assembly Bill 942 that would have terminated long-standing solar contracts with homeowners who sell excess solar power to the grid. The bill, which aims to reform residential solar contracts, faced significant public backlash and protests from solar owners and advocacy groups [2].

AB 942 initially proposed breaking contracts for 2 million homeowners who had signed 20-year terms with solar companies. The provision was part of the bill's attempt to address concerns from regulated utilities, who argued that net metering creates an $8.5 billion annual cost for California ratepayers [1]. However, third-party analysis found that rooftop solar actually saved California ratepayers $1.5 billion in bills in 2024 alone [1].

The Senate's Energy Committee, chaired by Senator Josh Becker, voted 9-4 to remove the controversial provision. The decision to maintain solar net metering agreements for homeowners upon the sale or transfer of their homes removes a major sticking point in the legislation [2]. The committee also removed language that would have denied cap-and-trade climate credits to solar customers.

The bill's sponsors, including Assemblymember Lisa Calderon, had argued that the provision was necessary to lower energy rates and protect utility profits. However, critics argued that the bill was designed to protect utility profits rather than reduce electricity rates [1].

While the bill still faces challenges, the removal of the contract-breaking provision is a significant victory for solar homeowners. The decision to maintain net metering agreements upon home sales ensures that solar investments retain their value and encourages further adoption of renewable energy sources.

References:
[1] https://www.nbcpalmsprings.com/2025/07/16/california-solar-bill-amended-preserves-20year-rooftop-solar-agreements
[2] https://pv-magazine-usa.com/2025/07/16/california-scores-victory-for-rooftop-solar-owners-retaining-contracts-on-home-sale/