07-08-2025
- Business
- San Francisco Chronicle
California Supreme Court kicks decision on rooftop solar rates to lower court
The state Supreme Court ordered a lower court Thursday to reconsider, under a more demanding standard, a California Public Utilities Commission decision that has increased rates for the 1.5 million homes and businesses using rooftop solar systems to generate electricity.
The court did not order reduced rates for solar users, but the standard it set for lower courts — requiring them to consider whether the commission has followed the law, and considered the costs and benefits of power generation it is regulating — may lead to a reversal of the rate increases that the CPUC approved in 2022.
A state appeals court that upheld the commission's decision used 'an unduly deferential standard of review,' Justice Leondra Kruger wrote in Thursday's 7-0 ruling.
She quoted legislative findings in a 1998 state law that 'the activities of the energy, telecommunications, and transportation industries will require expanded access to the court system at all levels.'
While the court stopped short of overturning the CPUC's decision, its ruling was welcomed by environmental groups that challenged the commission's action and sought to lower rooftop solar rates.
'I'm relieved to see the state's highest court rein in this runaway commission, which is putting corporate utilities ahead of Californians' pocketbooks, the climate and the law,' said attorney Roger Lin of the Center for Biological Diversity.
'Now we get our day in court,' said Bernadette Del Chiaro, a vice president of the Environmental Working Group. 'This is a precedent much bigger than rooftop solar.'
In its 2022 decision, the CPUC reduced the state's subsidies to households with solar systems, payments to compensate them for the electricity they generate and provide to the power grid.
The commission said those subsidies raise electricity rates for most customers. But rooftop-solar advocates said the payments were authorized by state law, reduced pollution and improved conditions in low-income communities. They said the commission's decision has greatly reduced solar installations in California, increasing air pollution from conventional electric generation and actually increasing costs for other ratepayers.
At the federal level, the Environmental Protection Agency, under President Donald Trump, is reportedly considering a plan to cut off $7 billion in federal grants to states and other recipients for rooftop-solar projects serving lower- and middle-income residents.
The funding program, authorized by a law signed by President Joe Biden, was designed to enable more than 900,000 households to install solar systems.
The budget bill that Trump signed last month will also eliminate federal tax credits for homeowners and businesses who purchase and install solar systems after 2025. According to a UC Irvine study in 2023, the average cost to install solar panels in California was $16,380, but was reduced to $11,466 by the tax credits, which were first provided by federal law in 1978.
The case is Center for Biological Diversity v. Public Utilities Commission, No. S283614.
