California Governor Signed Energy Bills, Vetoed Solar Act
Governor Gavin Newsom approved new grid-efficiency mandates while rejecting a community solar proposal.
Updated on Oct. 2, 2026 in Energy
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Should California prioritize lowering energy costs for households over incentivizing new renewable energy programs?
Governor Gavin Newsom signed energy legislation on October 2, 2026, aimed at improving grid capacity and small-scale solar access. Simultaneously, he vetoed a community solar bill, AB 1813, citing concerns over potential costs to ratepayers.
Why it matters
The legislative actions reflect a strategic shift in California energy policy focused on customer-sited storage and grid flexibility over subsidized community solar programs. By rejecting AB 1813, the state seeks to protect consumers from an estimated $1.5 billion in annual rate increases.
SB 868 permits residents to install solar systems up to 1,200 watts without utility interconnection, targeting California's 40% rental household share. Meanwhile, the defunct Demand Side Grid Support programme had successfully enrolled 1GW of battery capacity by 2025.
The players
Gavin Newsom
The Governor of California who is responsible for signing or vetoing state legislation.
California Energy Commission
The primary state agency responsible for energy policy, planning, and forecasting.
Public Advocates Office
An independent regulatory body within the California Public Utilities Commission that represents the interests of utility customers.
The details
SB 905 creates a grid utilisation metric to identify circuits with spare capacity, aiming to optimize energy flow. While Germany has already reached over one million balcony solar installations, California's new legislation seeks to mirror this accessibility for 14 million eligible rental units.
Timeline
March 2026: Senate committee voted in favour of SB 868.
June 2025: Germany reached one million balcony solar installations.
August 2026: UCLA CCSC published a study on community solar classification.
October 2, 2026: Governor Newsom signed and vetoed energy legislation.
1 December 2027: Deadline for CEC to identify load-modifying attributes.
The Big Picture
This policy pivot follows a pattern set by the Demand Side Grid Support programme, prioritizing customer-sited energy management over traditional wholesale generation models. It marks a clear strategic departure from centralized community solar initiatives.
Residents in rental units will now be able to install small solar systems up to 1,200 watts without burdensome utility approval. Conversely, the veto of the community solar program means that tenants who cannot install their own hardware will not gain access to shared solar energy credits.
The takeaway
California's new legislative framework prioritizes individual ownership of small-scale solar hardware to bypass grid interconnection barriers. Homeowners and renters should evaluate if 1,200-watt balcony systems provide sufficient power to meet their specific household demand.
Further reading
For more on evolving power policies in the state, visit our Energy section.
Live Poll
Should California prioritize lowering energy costs for households over incentivizing new renewable energy programs?
