UPDATE July 1, 2025: An earlier version of AB 942 would have reduced existing NEM contracts from 20 years down to 10 years, potentially impacting homeowners with solar systems installed under NEM 1.0 and 2.0. However, the bill has been amended to remove this controversial 10-year sunset clause due to strong opposition. As of June 30, 2025 the bill had not yet been passed.
June 18, 2025
California is considering passing Assembly Bill 942 (AB 942), which would change how homeowners with rooftop solar systems are compensated for the excess electricity they send back to the grid. Specifically, the bill would modify Net Energy Metering (NEM) policies, potentially affecting the financial benefits for current solar owners in San Carlos. As of April 2025, according to the California Distributed Generation Statistics, there are a total of 2,001 solar-powered homes in San Carlos.
Net Energy Metering (NEM)
Net Energy Metering (NEM) is a billing mechanism that credits customers for the excess electricity they send back to the grid from their solar panels. This credit can then be used to offset the cost of electricity they draw from the grid during periods when their system is not producing enough energy.
The bill mandates that homes with rooftop solar must switch from their current net energy metering (NEM) plans to NEM 3.0 upon sale or transfer. AB 942 would also shorten the term of NEM contracts from 20 years to 10 years.
California AB 942: Increase in Electricity Bills
The problem is that NEM 3.0 offers significantly lower compensation for electricity sent to the grid, reducing the financial benefits of solar investments. It’s estimated that the average homeowner who has to shift from NEM 2.0 to 3.0 would see an increase of $63/month in their electricity bill.
Solar Batteries May Become a Necessity
Under these current trends, adding a home battery system almost becomes a necessity. It helps maximize your solar investment by storing excess energy generated during the day and using it later, when electricity is most expensive, especially during peak hours. This allows you to minimize your reliance on the grid and potentially offset the lower value of the exported energy. In San Carlos, about 93.4% of solar-powered homes do not have any storage capacity or batteries (California Distributed Generation Statistics).
A single basic battery Powerwall, which stores 13.5 kWh of energy, typically costs around $15,000 installed. Before tax incentives, you can easily spend $30,000 on a solar panel system for a 2,000 SqFt home. The breakeven point for owning solar seems to be getting longer!
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About San Carlos Life
Mark Martinho and Vivienne Kelvin are the hosts of San Carlos Life and have been residents of San Carlos for years. While running San Carlos Life together with an awesome team, Mark and Viv are also in the business of real estate. They are the co-owners of Vabrato, a real estate brokerage with over 30 years of combined experience, serving the City of Good Living and the whole of San Mateo and Santa Clara counties.
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Mark is a Real Estate Broker and General Contractor, with degrees in Mechanical Engineering and Law. He is also a long-time resident of Redwood City and San Carlos. Viv is also a Broker, respected Interior Designer, seasoned Marketing Expert, and trusted San Carlos business community leader, as well as a long-time San Carlos resident.
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