Why Is Gov. Gavin Newsom Blocking Rooftop Solar in California? – Mother Jones

Mother Jones illustration; Sarah Reingewirtz/MediaNews Group/Getty; Getty

By any measure, California’s green energy transition has been a wild success. Two-thirds of its energy needs are now met by a mixture of renewables like wind and solar, alongside nuclear and geothermal, while the national average is 20 percent. In the last two decades, the state’s green energy output has grown by 43 percent, and adoption of rooftop solar by homes, businesses, and other entities accounts for almost a third of that.

That progress has slowed, however, over the last couple of years. In January 2024, rooftop solar sales were down to their lowest in a decade. The culprit? A series of policies that ranged from disincentivizing to straight-up penalizing homeowners who have embraced rooftop solar. “Everybody likes to talk about how Florida and Texas are out-competing California right now on renewable energy,” says Bernadette Del Chiaro, a VP at the Environmental Working Group. “And there is a whole lot of truth to it, because California is totally getting in its own way.”

One of the biggest hindrances is Gov. Gavin Newsom. A champion of residential solar back when he was mayor of San Francisco, Newsom has been a leading force in moving California away from it.

In 2022, the California Public Utilities Commission, whose members are appointed by Newsom, reduced by three-quarters the price utilities must pay new home solar adopters for the energy they deliver into the grid—a move that resulted in an 80 percent drop in demand for new installations. (Environmentalists and advocates seeking to reverse the commission’s decision filed a lawsuit now under consideration by the California Supreme Court—a ruling is expected any day now.)

Then, last year, Newsom issued an executive order and a subsequent report claiming rooftop solar was driving up electricity prices—what the utilities call a “cost shift.” It was “a bullshit executive order,” said Dave Rosenfeld, the executive director of Solar Rights Alliance, a nonprofit association of California solar consumers, “and you can quote me on that.”

Several environmental economists seemed to concur, albeit more politely, in a letter to Newsom critiquing the report’s methodology and noting that Newsom’s argument echoed that of rooftop solar’s competitors. One of the letter’s authors—Richard McCann—had conducted an analysis for a solar trade group that found rooftop solar actually saved California consumers $2.3 billion on their utility bills in 2024.

In February, Lisa Calderon, a Democratic assemblymember, introduced a controversial bill—AB 942—in the state legislature. Citing Newsom’s report, it attempted to break existing solar contracts between homeowners and utility companies to the utilities’ benefit. Before working in the legislature, Calderon, who receives large donations from the industry, was an executive at Southern California Edison.

The Solar Rights Alliance pushed back immediately. “You’re screwing basically 2 million consumers,” explains Rosenfeld, who rallied rooftop solar customers and their allies to call their representatives and testify in Sacramento. Several other legislators joined in the fight, and the bill was revised so as not to break the energy contracts. It still, however, excludes homeowners who pay less than $300 a year to the utilities—mostly rooftop solar customers—from receiving a share of California’s cap-and-trade credits.

Dwight James, a homeowner from Simi Valley who embraced rooftop solar, testified against AB 942, saying the original version of the bill would have lowered his home’s value by several thousand dollars. The state’s solar policy whiplash, he told me, has affected his view of the government: “These guys might change something at any time, because you can’t trust the promise or the contract that they do.”

So, what gives? Follow the money, Rosenfeld advises. Investor-owned utilities have donated more than $400,000 to Newsom since 2018. Adding in his donations from the utilities’ labor union, which is legally obliged to defend the companies’ business interests, Rosenfeld’s group calculates that Newsom has collected more than twice as much money from utilities as either of the last two California governors.

Newsom’s public support of utility-scale solar, Rosenfeld says, shows that he “has figured out how to be a green governor and still pursue the utilities’ anti-rooftop solar agenda.”

Utilities, which operate as quasi-monopolies, typically have a financial incentive to oppose rooftop solar. Namely, it messes with their bottom line. Widespread adoption of the technology—particular when combined with battery storage networks—reduces the need for utility infrastructure such as transmission lines and the “peaker” plants that utilities build to accommodate excess demand on the grid. But building new infrastructure and passing the costs to ratepayers with a guaranteed rate of return is how utilities make their money.

In short, more decentralized rooftop solar means less profits for utilities and their shareholders. “Even back in the nascent market” of the early aughts, Del Chiaro says, the utilities were lobbying against rooftop solar, and “just diabolically opposed to people generating their own electricity.”

Indeed, for decades, utilities have been pushing the “cost-shift” claim in Newsom’s executive order, the notion that rooftop solar increases electricity prices for homes and businesses that don’t adopt it. Energy economists have been looking into this claim for more than a decade. They have found that while these cost shifts exist in some scenarios, there is no evidence that they exist to the degree the utilities are claiming.

There is still disagreement about how seriously to take the claim. In an email, Richard Schmalensee, the former director of the MIT Center for Energy and Environmental Policy Research, told me that because retail energy rates in California are “absurdly high,” solar customers were being paid more for the electricity they generated than the utilities saved by not generating it. “That difference had to be paid by others—an unfair cost shift,” he said.

Schmalensee couldn’t say whether 75 percent was the appropriate amount by which to reduce the price utilities pay new solar consumers for electricity, but if it was, he said, the reduction in demand isn’t a problem: “If I am forced to pay you to do something, and you stop doing it when I stop being forced pay you, I think that’s a good outcome.”

But according to Bruce Mountain, a professor and director of the Energy Policy Centre at Victoria University in Melbourne, Australia—one of the economists who criticized Newsom’s executive order and subsequent report—the cost shifts are “often exaggerated” by utilities, and “in many cases, costs effectively shift the opposite way.”

Utilities, Mountain says, factor into their calculations the money they would have collected from solar consumers had those households not been generating their own electricity. “If a customer swaps a gas guzzler for a small efficient car (or an EV) does the petroleum industry have a claim on such customers for foregone sales of gas?” he asks. “We would all consider that preposterous.”

Another common critique of rooftop solar that utilities promote is the notion that it penalizes lower-income ratepayers who cannot afford the upfront investment of a solar installation. And that’s true to an extent, but it’s changing. In 2023, for example, nearly 40 percent of new home solar installations were by households with annual incomes of $100,000 or less. (In Australia and Germany, as Bill McKibben reports in an accompanying story, even renters can install so-called balcony solar at a modest cost, and without the expensive and cumbersome red tape imposed by America’s regional and local permitting processes.)

Barry Cinnamon, CEO of Cinnamon Energy Systems and host of a podcast called The Energy Show, has been involved in the rooftop solar industry since the ’80s. He likens the transition from utility power to home solar to our transition from landlines to cellphones. “The utilities had a 100-year run when the only way you could generate and deliver electricity was through central generation,” he says, “but the technology has changed.”

For decades, clean energy experts have debated the merits of rooftop vs. utility-scale solar. Some energy wonks favor utility-scale solar because it’s cheaper per kilowatt generated. Rooftop proponents counter that those calculations don’t account for the high cost of transporting energy via transmission lines, which create other political battles.

They also cite the infectious way rooftop solar spreads through communities, and how community support for solar is bipartisan. “There still is that strong libertarian sensibility when it comes to rooftop solar,” notes Del Chiaro, citing Utah’s recent embrace of balcony solar—the first (and so far, only) state to do so. “It engenders the most excitement among people.”

Yet despite California’s thorny landscape and the Trump administration’s deliberate attempts to crush wind and solar, rooftop aficionados remain hopeful. “This is the biggest cloud I’ve ever seen,” Cinnamon told me, “but we’re looking for that silver lining.”

It’s “crystal clear,” he adds, that rooftop is the fastest and cheapest form of energy generation, and “most of the people in industry are very positive.”

James, the Simi Valley homeowner, views his home solar array as a kind of freedom: “What I recognize here is that if I can produce my own energy, I’m not going to change the price on it. You can support yourself.”

I began asking James whether he would have opted for rooftop solar had the subsidies all gone away, but before I could finish, he cut me off.

“Without a doubt.”