Solar Policies in California

May 14, 2022 3 min

Solar Policies in California

Policies creating a level playing field

California’s forward-thinking policies are a key ingredient to the solar industry’s continued success in the state.

Clean energy has a long history in California, but it wasn’t until recent policy shifts that solar began to thrive. Under acts like the Renewable Portfolio Standard and the California Solar Initiative, solar capacity blossomed from roughly 198 MW in 2006 to over 3,322 MW of installed solar today.

Learning more about friendly policies will help you advocate for solar’s continued success:

  • Current solar policies
    • Financial incentives and other programs help Californians go solar
  • How do policies help the industry?
    • Policies spur industry growth and achievement
  • Encouraging friendly policies
    • Contact local organizations that fight for solar

Current solar policies

The right policies boost demand for solar, make it more affordable, and simplify the switch to renewable energy. As people have installed solar panels with help from these policies, the California solar industry has experienced enormous success.

Solar policies currently helping the industry in California include:

  • Renewable Portfolio Standard
  • California Solar Initiative
  • Net Metering
  • Green building requirements
Renewable Portfolio Standard

Established in 2002, but strengthened in 2006 and 2011, the Renewable Portfolio Standard (RPS) has been a driving force in the transition to solar.

Under the RPS, 33% of the electricity that California’s large investor-owned utilities provide must come from renewable sources by 2020. The RPS also requires that renewable energy to be generated in state, preventing utilities from simply importing from outside California.

California Solar Initiative

To help reach the 33% mandate, the California Public Utilities Commission approved the California Solar Initiative (CSI) in 2007. Through the big utilities, people can receive solar rebates that lower their installation costs by up to 50% when combined with federal incentives.

The CSI has proven hugely popular, but incentives are currently winding down. The program is already close to reaching its goal of 1,750 MW of installed solar capacity years ahead of schedule, and has helped thousands of Californians go solar.

Net Metering

Net metering policies allow homeowners to earn back their solar investments. Along with the CSI, net metering policies have been key to solar’s growth in California.

During the day, your solar panels generate electricity that returns to the grid. Over the course of the year, you’re credited at the retail rate for the amount of electricity you generate with your panels. Those credits are subtracted from the electricity you’ve used, reducing your power bills.

Plus, if you generate more electricity than you use, you’ll actually receive a check for the extra electricity rather than a bill.

Green building requirements

Newer local policy changes are driving solar growth in two of California’s towns.

In 2013, the towns of Sebastopol and Lancaster enacted policies requiring all newly constructed homes to have solar panels. These policies were strongly supported by town residents, who want to attract solar businesses to their respective regions.

Representatives from the Solar Energy Industries Association believe new green building mandates will spread throughout the state in time.

How do policies help the industry?

Many of California’s solar policies were designed to help the industry reach the level it’s at today. More than 43,700 Californians now work in the state’s solar industry, which includes over 1,500 companies. 

The industry’s growth is tied to, in part, how successful policies like net metering and the CSI have been for customers. Between 2009 and 2013, solar capacity increased by over 191% as customers took advantage of solar rebate programs and net metering policies.

One would think that as the CSI winds down, the industry could face trouble, but that hasn’t been the case. In fact, many solar installers are already forgoing the rebate programs for new customers, and are finding no drop in demand.

That’s in part because state solar policies have increased solar’s popularity, while giving the technologies time to become more affordable on their own. Since 2007, the average installed cost of rooftop solar panels has decreased by roughly a third, according to the California Public Utilities Commission.

Instead of fighting to extend rebate programs, solar advocates are now turning to new ideas like streamlined permitting policies that will lower prices even further.

Encouraging friendly policies

As the California solar industry continues to grow, it will face new challenges from utilities and regulators who wish to maintain the current energy structure.

Every time a customer goes solar, that’s a lost revenue stream for a utility that would rather keep people buying electricity each month. Rather than change their business models to encourage solar, they would much rather keep things the way they’ve been for years.

Even utilities that were previously supportive of solar are having second thoughts now that it’s becoming more popular. Most recently, Pacific Gas and Electric raised issues with net metering, claiming they shouldn’t have to pay people retail prices for the electricity they generate.

By voting for solar-friendly politicians and supporting advocacy organizations, you can make sure California remains the solar capital of the United States. Some organizations helping the California solar industry fight for the right policies include:

These organizations can help inform you about where the next policy battles lie in California. Recent pushes include protection of net metering laws and a universal permitting and inspecting process that will make it easier to go solar.

Of course, the best way to show that solar policies are successful is by installing solar panels on your own home. Contact local installers to learn more about what policies could help you go solar today.