California’s Supreme Court has taken a bold step by unanimously ruling that a lower court must revisit its earlier decision upholding the Net Energy Metering (NEM) 3.0 policy. It’s a move that could reshape the future of solar energy in the state. While the case centers on residential solar, its implications reach far beyond homes and into the heart of California’s commercial sector.
As recently covered by Solar Power World in its California Supreme Court Rules Lower Court Must Revisit NEM 3.0 Ruling article, the issue stems from a 2022 court challenge by the Center for Biological Diversity, The Protect Our Communities Foundation, and the Environmental Working Group questioning the legality of the policy, which reduced homeowner compensation for rooftop solar by up to 80% and led to massive layoffs in the residential solar market. It goes on to say that the Supreme Court said the appeals court relied on the wrong legal standard when upholding the California Public Utilities Commission (CPUC)’s solar net-metering policy.
As a commercial solar installer serving businesses across California – from mom-and-pop shops to large enterprises – we at Coldwell Energy have seen how Net Billing under NEM 3.0 undermines California’s business competitiveness. We know that this court decision matters not just for clean energy, but for keeping our state economically viable.
The Cost of Energy Independence
California businesses already face some of the highest electricity and labor costs in the nation. NEM 3.0’s 80% reduction in compensation for solar generation makes it even harder for companies to invest in their energy future and control operational costs. We’ve watched local restaurants, retail stores, warehouses, and manufacturing facilities abandon solar projects that would have strengthened their competitive position.
Instead of policies that discourage energy independence, California should focus on what keeps businesses here and attracts new investment. When a manufacturing company can’t justify solar because of poor compensation rates, they’re more likely to expand operations in states with better energy economics. When a small business can’t reduce energy costs through on-site generation, they’re at a disadvantage competing nationally.
A Question of Economic Strategy
The court’s examination of whether Net Billing violated laws requiring policies to grow distributed solar gets to a fundamental question: Are we helping or hurting California’s business climate?
We believe that energy independence through solar should be a competitive advantage for California companies, not an economic dead end. We also believe policies should work to make California more attractive for business, manufacturing, commerce, and industry, not regulations that push investment and jobs to other states.
Coldwell Energy’s Commitment
For our commercial customers, nothing changes today. We continue to design and deliver solar, storage, and EV charging solutions that cut energy costs, improve reliability, and support sustainability targets. We’ll monitor developments and keep you informed on any changes that could impact your projects or returns.
But we also believe it’s time for a broader conversation – one that includes business leaders, policymakers, and energy experts – about how California can align its clean energy goals with economic growth.