California rooftop solar receives setback as court upholds NEM3.0

Facebook
Twitter
LinkedIn
Reddit
Email
The California Court of Appeals’ decision gives a setback to the rooftop solar industry in California. Image: Unsplash

The California Court of Appeals has upheld the state’s ongoing net energy metering programme, NEM3.0, dashing the hopes of campaigners lobbying to reform the unpopular framework.

The decision dealt a “major setback to rooftop solar”, said nonprofit organisation the Environmental Working Group, one of the groups that filed the lawsuit in 2023.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

The Center for Biological Diversity and The Protect our Communities Foundation are the two other environmental groups that filed the lawsuits and argued that the new tariff – dubbed net energy metering 3.0 (NEM3.0) – was inconsistent with section 2827.1, which identifies several key objectives that the California Public Utilities Commission (CPUC) must ensure in developing the new tariff programme.

The Court’s decision shuts down the possibility of reforming the current net metering programme, which has been highly criticised by the solar industry since its passing in 2022. NEM3.0 has mostly driven up the adoption energy storage but at the expense of solar PV installations, which halved between Q3 2023 and Q1 2024.

“We are extremely disappointed in the Court of Appeal’s decision on remand from the state Supreme Court. Instead of looking at this case with fresh eyes and doing the due diligence of reading and interpreting the statute, the Court of Appeal rushed to judgement, siding with the pro-utility CPUC and its utility allies,” said Bernadette Del Chiaro, senior vice president for California at Environmental Working Group.

Court of Appeals reaffirms original decision

This decision from the Court of Appeals comes after the California Supreme Court had sided with the three groups in August 2025, and remanded the matter back to the California Court of Appeals, which reaffirmed its original decision.

“In sum, we conclude the Commission did not fail to proceed in the manner required by section 2827.1(b)(1) or otherwise err when it adopted the successor tariff,” wrote the California Court of Appeals.

Section 2827.1(b)(1) refers to the fact that the CPUC must “include specific alternatives designed for growth among residential customers in disadvantaged communities” when developing the successor tariff.

The court also concluded with the same statement for section 2827.1(b)(3), which is related to ensuring that the new programme is “based on the costs and benefits of the renewable electrical generation facility”.

“We may have just set the clocks forward an hour but this decision sets California back a decade when it comes to building a clean energy future. It isn’t just Washington, D.C., setting us back on energy affordability and reliability. California is providing more than its fair share of unforced errors,” added Del Chiaro.

The Court of Appeal’s conclusion can be accessed here.

Read Next

October 20, 2026
Solesca has released the second version of its software, which includes the ability to map the terrain for a proposed PV installation site.
October 20, 2026
Italy’s GSE has awarded US$863.6 million in grant funding to 505MW of new rooftop solar capacity, to be deployed on agricultural projects.
October 20, 2026
NYSERDA has announced its allocations of US$200 million to expand access to affordable solar energy across New York state.
October 19, 2026
Independent power producer (IPP) Swift Current Energy has filed a lawsuit against thin-film cadmium telluride (CdTe) solar module manufacturer First Solar in the New York County Supreme Court.
October 19, 2026
Solar PV manufacturer Qcells has unveiled new, US-produced versions of two residential AC solar panels, Q.TRON AC and Q.PEAK DUO AC, by the end of 2026.
October 19, 2026
The skilled worker shortage was one of the key discussions from solar manufacturers at last week's PV CellTech USA Conference.

Upcoming Events

Solar Media Events, Upcoming Webinars
October 21, 2026
2pm AEDT
Solar Media Events
November 3, 2026
Málaga, Spain
Solar Media Events
November 24, 2026
Warsaw, Poland
Solar Media Events
February 2, 2027
London, UK
Solar Media Events
April 20, 2027
Istanbul, Türkiye