California CPUC proposes 40% cut to solar export credits — payback stretches past 12 years, industry warns of market collapse
California regulators propose slashing rooftop solar export credits by another 40% under a revised net billing tariff, which solar installers say would push residential payback periods beyond 12 years and effectively end new installations across major utility territories.
California's Public Utilities Commission is back at it — this time proposing to cut the already-anemic export credit for rooftop solar by another 40%. Under the current Net Billing Tariff (NEM 3.0), export rates were already slashed roughly 75% below retail, driving a collapse in residential solar sales and a wave of installer bankruptcies. This new proposal would push the effective export value so low that a typical system's payback period stretches past 12 years — longer than most homeowners' planning horizon.
Who wins? The investor-owned utilities — PG&E, SCE, SDG&E — whose business model depends on selling electrons, not hosting self-generators. Every rooftop system that doesn't get built is a customer who stays on the full retail tariff, paying into the utility's rate base without offsetting their bill. The utilities' trade group has funded the same 'cost shift' messaging in states from Arizona to Florida, despite LBNL's repeated findings that the actual cost shift at current penetration levels is a rounding error — hundredths of a cent per kWh — once avoided energy, capacity, line losses, and other grid benefits are honestly counted.
Who pays? Ratepayers who can't or don't go solar — the very people the utilities claim to protect. The CPUC's own value-of-solar studies have shown that distributed solar provides net benefits when properly accounted, yet the commission keeps ratcheting down export rates while approving rate increases that make grid power more expensive for everyone. The real 'cost shift' is from utility shareholders to customers: guaranteed returns on capital spending that could be deferred by distributed generation.
The mechanism: This is a proposed decision in CPUC R.22-07-005, the net energy metering successor tariff proceeding. The comment window is open — and closing fast. If you're a California ratepayer, now is the time to file a protest with the CPUC, contact your state legislators, and join the Solar Rights Alliance's campaign to defend self-generation. The alternative: a fair value-of-solar tariff that pays the honest avoided-cost stack — energy, capacity, resilience, environmental — at time- and location-granular rates that reward exports when the grid needs them most.