California lawmakers warn state against exploiting new federal climate law to impose solar tax on constituents

SAN FRANCISCO – Sixteen members of Congress from California are asking state utility officials to resist using the landmark Inflation Reduction Act’s incentives for expanding solar as an excuse to impose a new tax that would stymie growth of the clean energy source in the state.

“It is concerning to see entities arguing that the IRA’s passage warrants weakening state-level solar and storage policies,” the group of lawmakers wrote in a September 16 letter to Alice Busching Reynolds, president of the California Public Utilities Commission, or CPUC, which is reviewing a plan by the state’s big three energy companies to stifle solar.

Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric argued in a brief filed in August with the CPUC that the IRA extends and expands the federal tax credit for residential solar. The companies said this should have a “direct impact” on the CPUC’s upcoming decision about whether to grant their request to end state incentives that help working- and middle-class families afford solar.

The IRA, which was enacted in August, includes a historic $369 billion to fight the climate crisis, including incentives for solar, renewable power, electric vehicles and decarbonization.

The California lawmakers, led by Democratic Reps. Mike Thompson and Mike Levin, said scrapping the state incentives would undermine the IRA’s clean energy goals.

The energy companies make a “perverse justification to impose discriminatory fees” on those who install solar panels on their homes and small businesses, the lawmakers wrote.

The energy companies’ proposals “would effectively make rooftop solar and storage more expensive for our constituents and would slow its deployment – the exact opposite of our impetus to expand and extend solar and storage incentives in the IRA,” they wrote.

“These members of the state’s congressional delegation are right to be concerned the CPUC could adopt the utilities’ twisted logic and exploit the federal renewable incentives to justify a steep monthly solar tax on their constituents,” said EWG President and Bay Area resident Ken Cook.

“For California to continue its progress in addressing the climate crisis, it is imperative the state incentives for rooftop solar remain in place and alongside the expanded federal tax credit Congress adopted,” Cook said.

California’s private solar market is thriving because the current rooftop solar program – net metering 2.0 – is still in place. Extension of the solar investment tax credit is important for making solar more accessible to working-class families. Well-designed state net metering programs like California’s have been the main driver of customer-owned solar.

The utilities are trying to scrap the incentives in the program’s next phase, net metering 3.0. Energy and electricity industry analyst firm Wood Mackenzie estimates the state’s solar market will be cut in half by 2024 if regulators adopt the proposal.

“Without both a robust net-metering program and the federal tax credit in place, the rooftop market in the state will be out of reach for millions of hard-working residents,” said Cook. “We need to find every possible way to fight the climate crisis, and the IRA and California’s successful incentives are a powerful pair of tools for achieving that goal.”


The Environmental Working Group is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.  

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