California AB 942 Explained: What the New Net Metering Changes Means for Solar Owners

In a state long celebrated for leading the nation in solar energy adoption, California is once again making headlines — but this time, it’s for a legislative proposal that’s raising serious concerns among solar homeowners and industry professionals. Assembly Bill 942 (AB 942), introduced by Assembly member Lisa Calderon, is moving swiftly through the legislature and could become one of the most transformative and controversial solar energy reforms in recent years.

As one of the trusted solar panel installers in California, Nabu Energy is committed to helping homeowners across the Bay Area understand what this bill means for their solar investment. In this in-depth article, we’ll break down what AB 942 entails, how it could impact current and future solar customers, and why battery storage has become more important than ever.

What Is AB 942, and Why Does It Matter?

AB 942 proposes significant amendments to California’s Net Energy Metering (NEM) policies, particularly targeting customers who installed solar under earlier, more generous versions of NEM (namely, NEM 1.0 and NEM 2.0). These legacy programs allowed solar owners to offset their electricity costs and export excess energy to the grid at near-retail rates. For years, this model was a primary incentive for homeowners to invest in rooftop solar.

However, the state’s utility regulators and public watchdogs argue that these outdated incentives have led to an inequitable system where non-solar customers bear the burden of maintaining the grid. AB 942 aims to “correct” this imbalance by sunsetting legacy NEM benefits and preventing the transfer of those benefits when a solar-equipped home is sold.

The implications are sweeping, especially for those who installed solar years ago with the promise of 20+ years of utility savings. For Bay Area solar companies like ours, this bill represents a fundamental shift in how we guide homeowners through their energy journey.

How AB 942 Will Change Solar for Existing Customers?

If you’re a homeowner currently enrolled in NEM 1.0 or NEM 2.0, AB 942 will directly affect your bottom line. Starting July 1, 2026, customers who have been on their existing NEM tariff for 10 or more years will be forcibly transitioned to the state’s latest NEM version, currently NEM 3.0.

This means:

• You will no longer receive compensation for solar exports at near-retail rates.

• Your system’s output will be valued using California’s Avoided Cost Calculator (ACC), a pricing mechanism that offers significantly lower compensation based on the time of day.

• You will become subject to non-bypassable charges, which help fund public programs and grid maintenance, fees that legacy NEM customers were previously exempt from.

For many homeowners, these changes could mean a dramatic reduction in monthly utility bills. That’s why now is a critical moment to reevaluate your solar strategy.

Impact on Homebuyers and Property Transfers

Perhaps one of the most contentious elements of AB 942 is that it prevents new homebuyers from inheriting NEM 1.0 or 2.0 benefits when they purchase a property with an existing solar system.

Starting January 1, 2026, if you buy a home that had solar installed under one of the older NEM programs, you’ll be required to enroll in the current NEM tariff even if the system itself remains unchanged.

This could have ripple effects on California’s real estate market. Home sellers may find that solar no longer adds as much resale value, and buyers may be hesitant if the long-term savings potential has been reduced. As one of the best solar companies near me, we’re already seeing clients ask: how can I maintain the value of my investment in this shifting policy landscape?

Why Battery Storage Is Now Essential?

At Nabu Energy, we believe the smartest path forward lies in maximizing solar self-consumption, and that means integrating home battery storage installation into your solar plan.

Under NEM 3.0 and beyond, the value of solar is no longer in what you export to the grid; it’s in what you keep and use yourself. A solar battery backup installation allows you to store excess solar energy during the day and use it when rates are highest or during grid outages. This behind-the-meter usage ensures that you’re not relying on reduced export rates to realize savings.

Additionally, battery storage future-proofs your home from outages. As California’s energy landscape becomes more complex, homeowners with batteries will enjoy greater control, security, and independence.

The Equity Argument and the Controversy

Supporters of AB 942, including major utilities, low-income advocates, and the Public Advocate’s Office, argue that outdated NEM programs unfairly shift grid maintenance costs to non-solar customers, many of whom are renters or lower-income households who cannot afford solar.

Their data shows that the annual cost shift has ballooned from $3.4 billion in 2021 to over $8.5 billion in 2024. This raises serious concerns about equity and sustainability of the grid.

However, critics argue that the bill goes too far. By cutting off benefits that many homeowners made long-term financial decisions around, AB 942 risks slowing rooftop solar adoption and jeopardizing California’s clean energy goals. For solar installers, energy advocates, and homeowners alike, the bill’s passage could mark a turning point and not necessarily for the better.

How Nabu Energy Can Help You Navigate the Changes

As a trusted solar panel installer in California, Nabu Energy has always prioritized transparent, commission-free service tailored to each homeowner’s unique needs. With these policy shifts on the horizon, it’s more important than ever to partner with California home solar experts who understand the intricacies of NEM rules and grid economics.

We offer:

• Customized solar + battery solutions designed for today’s policies and tomorrow’s changes.

• Seamless installation and support for solar battery backup installation.

• Real answers, not pressure sales, from a top-rated team of solar panel installers near me.

Conclusion: The Future of Solar Is Still Bright If You Prepare Now

While AB 942 is likely to reshape how Californians think about rooftop solar, it doesn’t have to diminish your energy independence. With the right strategy, including battery storage, smart design, and expert support, you can continue to lower your carbon footprint, stay in control of your energy, and protect your family from any potential energy outages.

If you’re unsure how this bill could impact your existing system or upcoming solar project, reach out to Nabu Energy today. As your local experts in Bay Area solar companies, we’re here to help you adapt, upgrade, and thrive in California’s changing solar landscape.