California Enacted Solar Legislation and Vetoed Community Plan
New laws expand small-scale solar capacity while the state halts a community solar program to prevent rate hikes.
Updated on Oct. 2, 2026 in Energy
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Governor Gavin Newsom signed SB 905 and SB 868 into law, establishing new grid utilization metrics and allowing residential balcony solar installations up to 1,200 watts. Simultaneously, the governor vetoed AB 1813, which would have required a renewable energy subscription program for residents.
Why it matters
The legislative actions aim to maximize existing grid capacity through decentralized energy systems while protecting consumers from potential rate increases. The veto of the community solar bill reflects state concerns over the estimated $1.5 billion in annual costs to ratepayers.
SB 868 permits residents to install solar systems up to 1,200 watts (AC) without utility approval, aiming to tap into the approximately 14 million rental units eligible for balcony solar. This contrasts with the vetoed AB 1813, which sought to regulate larger community solar projects capped at 5MW per site.
The players
Gavin Newsom
The Governor of California who sets state energy policy and exercises executive veto power over legislative proposals.
California Energy Commission
The state's primary energy policy and planning agency responsible for forecasting and infrastructure assessments.
Public Advocates Office
An independent state agency within the CPUC that represents the interests of utility ratepayers.
The details
SB 905 creates a grid utilization metric designed to identify circuits capable of hosting additional energy, requiring utilities to develop load flexibility programs that shift electricity usage. By bypassing utility interconnection for systems under 1,200 watts, SB 868 allows homeowners and renters to integrate small solar arrays directly into existing building electrical systems. Meanwhile, the state has ended the Demand Side Grid Support (DSGS) program, which had previously enrolled over 1GW of battery capacity.
Timeline
June 2025: Germany reached over one million balcony solar installations.
March 2026: The Senate committee voted in favour of SB 868.
August 2026: The UCLA CCSC published a study on community solar classification.
October 2, 2026: Governor Gavin Newsom signed the new energy bills and vetoed AB 1813.
1 December 2027: The date by which the California Energy Commission would have identified load-modifying attributes under AB 1813.
The Tech Race
California is pivoting from broad subscription-based renewable models toward localized residential grid flexibility, moving away from the structure utilized in the Demand Side Grid Support program. This approach tracks against international efforts like Germany’s, which has already scaled to over one million balcony installations.
Renters and homeowners will soon have legal clearance to install balcony solar systems up to 1,200 watts without the burden of utility-level interconnection processes. However, residents who expected a new community solar subscription program will not see that option materialize under the current legislative outcome.
The takeaway
California is prioritizing small-scale, decentralized solar installations while halting broader community subscription models to keep ratepayer costs manageable. Residents should monitor future CPUC filings for updates on grid utilization metrics and the implementation of small-scale interconnection rules.
Further reading
For more on the evolving state landscape, see the Energy section.
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Should California prioritize lowering energy costs for households over incentivizing new renewable energy programs?
