SACRAMENTO, Calif. – On Wednesday, the California Assembly Appropriations Committee approved A.B. 942, a utility-backed bill to undo existing home solar contracts that could ultimately cost more than 300,000 low- and moderate-income residents thousands of dollars in lost property values.
The bill, introduced by Assemblymember Lisa Calderon (Whittier), would inject uncertainty into values for properties where the owners previously invested in contracts to install rooftop solar. The committee’s decision to advance the bill was based on assumptions by some members that it would not cost the state significant sums of money, even if it would cost consumers.
“As if things aren’t hard enough for California families, Assembly Bill 942 would retroactively break 1.5 million solar contracts, reducing home values, and further gumming up real estate sales,” said Bernadette Del Chiaro, EWG’s senior vice president for California.
“By allowing A.B. 942 to move forward, the Assembly committee ignored the pleas of voters and instead sided with powerful utility interests,” she said.
Between 2020 and 2023 alone, 290,000 low- and moderate-income Californians (family income of under $100,000 per year) purchased rooftop solar panels under a program called net metering. They usually did so with the help of long-term financing such as loans, leases or power purchase agreements.
These consumers were promised, in writing by the state, that their solar panels would keep their net metering contract for 20 years, and that the terms would remain after sale of the home or property. With these guarantees, consumers made long-term investments in solar energy to help California achieve its clean energy goals.
‘Costly liability’
But A.B. 942 would retroactively change the terms set by the state, breaking the contract and reducing the value of the solar panels when an owner sells their property.
Under the bill, the homeowner would have one of two choices when they go to sell their property. One option would be transferring their financial agreement to the home buyer. But this would likely face resistance as the payments for the solar panels would likely be greater than the utility bill savings. The other option would be for the homeowner to buy out their solar financing at the time of sale.
The average cost of installing rooftop solar over the past several years was roughly $35,000, if paid up front. With interest payments and fees, the liability for those solar panels could reach $50,000.
Given that 290,000 low- and moderate-income families went solar in the past several years, it is reasonable to expect at least half of them to want or need to sell their solar home in the next ten years. At the time of sale, these homeowners would still owe tens of thousands of dollars in solar liability. Whatever is left on their loan or lease would have to be subtracted from their home value at time of sale.
The California Association of Realtors wrote in opposition to the bill, “Instead of bringing down electricity costs to Californians, A.B. 942 will slice into the value of many working-class families’ home equity improvements involving solar.
“These numerous homes, which include moderately priced housing stock, will become a costly liability for home-sellers and will minimize a whole class of buyers who would rather not purchase a home that has solar panels that only provide marginalized savings in energy costs,” the association wrote.
A coalition of single-family and multi-family developers similarly opposes A.B. 942. In a letter to members of the Assembly, the coalition says, “A.B. 942 is supposed to address energy ‘affordability.’ However, this bill would have the opposite effect.
“By retroactively forcing new owners that purchase properties with existing solar systems onto the Net Billing Tariff (or another successor tariff), A.B. 942 will inject unnecessary uncertainty into housing transactions. Instead of reducing electricity bills for California’s ratepayers, it will simply 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 coalition wrote.
“Now that the full Assembly will have the opportunity to vote on this bill, we hope legislators will see A.B. 946 for what it is – another scheme to penalize homeowners who are simply trying to lower their electric bills and invest in something good for the planet and society at-large,” said Del Chiaro.
“Legislators should not let this bill move forward. They should all vote no on A.B. 942,” she said.
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The Environmental Working Group (EWG) is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.
