Assembly Appropriations approves AB 942, a utility-backed anti-solar bill that will cost low- and moderate-income families tens of thousands of dollars in lost home value

Sacramento -- Today, the California State Assembly Appropriations Committee approved AB 942 (Calderon), a utility-backed bill that would force more than 300,000 low- and moderate-income Californians who recently invested in solar panels to lose potentially tens of thousands of dollars when they go to sell their homes. The Assembly's decision to move the bill forward was based on the prediction that the bill 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 of California. "By allowing AB 942 to move forward, the Assembly committee ignored the pleas of voters and instead sided with powerful utility interests."

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 -- usually with the help of long-term financing such as loans, leases or power purchase agreements. These consumers were promised, in writing by the state of California, 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.

But AB 942 would retroactively change these terms set by the state, breaking the contract and reducing the value of the solar panels at the time when the owner goes to sell their home or property. Under the bill, the homeowner would have one of two choices when they go to sell their home. They could try to transfer their financial agreement to the home buyer but 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 going solar over the past several years was roughly $35,000, if you 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, AB 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 rather not purchase a home that has solar panels that only provide marginalized savings in energy costs."

A coalition of single-family and multi-family developers similarly oppose AB 942 stating in a letter, "AB 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), AB 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."

"Now that the full Assembly will have the opportunity to vote on this bill, we hope legislators will see AB 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 AB 942."