AB 942 Threatens Your Solar Investment – Here’s What You Need to Know
If you’ve installed solar in California, your long-term savings could be on the line.
A new proposal in Sacramento, Assembly Bill 942 (AB 942), would cut short the promised savings that over 2 million Californians counted on when they installed solar. Here's what you need to know, and how you can act now to protect your investment.
April 15th, 2025 | 4-minute read | AB-942, Assembly Bill 942
A Quick History of Solar Incentives in California
Since the original Net Energy Metering (NEM) program was introduced in 1996, homeowners and businesses who installed solar were allowed to send excess energy back to the grid and earn full retail credit. This policy was a huge driver of solar adoption - it made the economics work.
Under NEM 1.0 and NEM 2.0, customers were guaranteed 20 years of those savings. This “grandfathering” allowed solar investments to pay for themselves, and then some. Thousands of families and businesses made solar decisions based on that promise - and many are still mid-way through that 20-year timeline.
But then came NEM 3.0 (also known as the Net Billing Tariff), which went into effect in April 2023.
What Changed Under NEM 3.0?
NEM 3.0 drastically reduced the value of solar energy sent back to the grid, cutting export credits by around 75% on average. That means a solar customer who once earned around 30 cents per kilowatt-hour for extra energy now earns closer to 5–8 cents.
The result? Monthly savings are significantly lower - unless you install a battery to store excess power and use it later. For many, the payback period for a solar-only system has jumped from 5–7 years under NEM 2.0 to 10–14 years under NEM 3.0.
New solar customers are adapting by adding batteries, but the economics have clearly shifted. That’s why it’s so critical to protect the customers who went solar under the old grandfathering rules.
What Is AB 942 and Why Is It a Problem?
AB 942 would break California’s 20-year promise to NEM 1.0 and 2.0 customers. The bill proposes that:
- Starting in July 2026, anyone who’s been on NEM 1.0 or 2.0 for 10 years or more would be forcibly moved to NEM 3.0.
- If you sell your home, the new owner wouldn’t inherit your grandfathered rate - they’d be switched to the lower-value NEM 3.0 plan immediately.
For many families, that could mean thousands of dollars in lost savings. It could also make solar homes harder to sell and erode the financial return for existing customers.
When you installed solar, you did the right thing for your family and for the environment - under the clear understanding that you’d receive 20 years of benefits. AB 942 breaks that promise.
Why Not?
This isn’t just about you - it’s about the future of local solar power in California. If the Legislature can change the rules retroactively, what’s stopping them from doing it again? AB 942 would set a dangerous precedent that undermines trust in clean energy policy - just when we need Californians to be investing in solutions.
We need to protect the customers who helped make California a solar leader, and make sure going solar stays a smart investment for everyone else who’s considering it.
Take Action: Help Stop AB 942
AB 942 is currently moving through committee in the California State Assembly, and your voice matters. Click here to contact your Assemblymember and urge them to vote NO on AB 942.
It takes just a minute, and your message could help protect the solar savings of millions of Californians.
Boden Energy Solutions
A dedicated community member known for his extensive volunteer work throughout the town, Tyler founded Boden Energy Solutions with a clear mission: to empower homeowners with personalized solar solutions. Leveraging a decade of specialized experience in photovoltaic solar and energy storage, Tyler's approach goes beyond simple sales, prioritizing a consultative process that ensures clients understand and benefit from their investment.