Tesla Urges CA Residents to Fight Against Unfair Solar Energy Tax that Could Slow Solar Rollout in State

Tesla Urges CA Residents to Fight Against Unfair Solar Energy Tax that Could Slow Solar Rollout in State

Photo: Sarah Tew

Tesla urges California residents to fight against the adoption of a tax on the use of solar energy in accordance with new net metering rules (NEM 3.0). The new regulations will slow down the rollout of solar and hinder the achievement of carbon neutrality.

Although Tesla has moved its headquarters from California, the company still worries about the state's residents. The company has called on state residents to petition Governor Newsom and the California Public Utilities Commission (CPUC) to reject the proposed solar tax and retroactive changes to existing customers.

CPUC will consider accepting a proposal this month for PG&E, SCE or SDG&E customers who have installed solar panels or plan to do so in the future. CPUC offers NEM 3.0, which includes a “grid access” fee of $8/kW of installed solar per month—in addition to other fees—that could add between $50-$80/month to the electric bill of a home solar customer. If adopted, this would be the highest solar fee anywhere in the country, including states hostile to renewable energy. This proposal would also reduce the value of bill credits for solar energy sent to the grid by about 80%.

The new rules will also apply to customers who have already signed contracts and purchased the solar system, which violates the basic principles of fairness. According to the proposal, customers who installed solar under the NEM 1.0 and NEM 2.0 rules—which were guaranteed to be in place for 20 years when customers enrolled—would see their “grandfathering period” reduced to 15 years from the date they installed their system, after which they would transition to NEM 3.0.

The CPUC may vote on whether to adopt the NEM 3.0 proposal as soon as January 27, 2022, and they are taking feedback from the public until that time. There are several ways you can participate:

  1. Sign up to provide a verbal comment directly to the 5 Commissioners at an upcoming CPUC public meeting on January 13 or January 27   
  2. Email the CPUC ( and the governor’s office ( using the tools above or on your own
  3. Call the Governor’s office directly to ask Governor Newsom to stop this unfair proposal before it discriminates against existing and future solar customers 916-445-2841 
  4. Tweet at the Public Utilities Commission and Governor Newsom (@californiapuc @GavinNewsom) using the hashtag #SaveSolar

Tesla supported previous NEM reforms that increase the climate and grid benefits of customer-sited clean generation through rate structures that encourage the dispatch of solar-paired batteries during times of the day when the electric grid is strained and fossil power plants are most polluting. However, the company opposes the CPUC proposal for several reasons.

First, imposing fixed charges only on those customers who choose to install solar impinges on customers’ right to self-generate their own clean energy. It violates every tenant of regulatory fairness and is likely illegal under federal law. The fixed charges cannot be avoided by adding a battery and would need to be paid regardless of whether the solar customer exports energy to the electric grid. Every solar customer should be asking why they are discriminated against, but not those customers who have rarely used vacation homes, invest in energy efficiency, have small homes, or otherwise pay lower utility bills. Why would the PUC not add fixed charges to all customers fairly and with documented justification, rather than only solar customers?

Second, the dramatic change from the current NEM policy will reduce customer adoption of clean energy in California at a time when more is needed to meet the state’s climate goals and to provide more energy resiliency in the face of unprecedented wildfires and grid outages.

Finally, reducing the length of the grandfathering period short-changes customers who made an investment in solar under rules that promised consistent policy over the life of their system. Changing the rules in the middle of the game will make it less likely for customers to trust that other CPUC decisions won’t later be reversed.

© 2022, Eva Fox | Tesmanian. All rights reserved.


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Article edited by @SmokeyShorts, you can follow him on Twitter

About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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