California Legislature Sends AB 1813 Community Solar and Storage Bill to Governor Gavin Newsom

The California State Legislature has granted final approval to Assembly Bill 1813, transmitting landmark energy legislation to Governor Gavin Newsom that aims to revitalize the state community solar market through paired battery storage mandates and reformed tariff structures.

Passed in the final days of the legislative session with bipartisan backing, AB 1813 addresses long-standing regulatory bottlenecks that have historically limited the deployment of shared local solar arrays across California. Under existing regulatory structures established following 2022 legislation, developers and consumer advocates argued that compensation rates approved by the California Public Utilities Commission (CPUC) failed to render shared community solar projects financially viable for developers or residential subscribers.

AB 1813 alters this approach by statutorily directing the CPUC to adopt a revised valuation framework anchored in the state Avoided Cost Calculator. The measure specifically requires new community solar installations to integrate dedicated battery energy storage systems, allowing clean power generated during midday hours to be stored and discharged onto the electrical grid during high-demand evening peak periods when grid strain and wholesale power costs are highest.

Proponents of the legislation, including affordable housing advocates, clean energy developers, and environmental justice coalitions, emphasize that the bill opens distributed clean energy benefits to demographic groups historically excluded from traditional rooftop solar incentives. Because rooftop solar systems require single-family homeownership and upfront capital or credit financing, millions of California renters, multifamily apartment tenants, and low-income households have remained unable to directly access distributed generation credits.

Under AB 1813, individual community solar and storage facilities are capped at a maximum generation capacity of 5 megawatts (MW) and 5 MW of storage capacity, focusing projects on urban brownfields, commercial rooftops, and community-adjacent parcels near local load centers.

The measure faced sustained debate and scrutiny from investor-owned utilities, which raised concerns regarding potential cost shifts onto non-participating electric ratepayers if export compensation rates are set too high. In crafting the compromise language, lawmakers incorporated guardrails ensuring that grid benefits and avoided transmission investments are rigorously quantified before credits are applied to subscriber utility bills.

Governor Newsom has until the statutory end-of-session deadline to sign the bill into law, issue a veto, or allow it to become law without signature. If enacted, the CPUC will begin formal rulemaking proceedings to implement the tariff structures and project interconnection guidelines ahead of a planned rollout.