SMW Halts “Underground Regulation” Threatening Solar and Storage Projects

October 30, 2022

In a settlement with SMW client the California Solar and Storage Association (CALSSA), a state licensing board rescinded regulations that would have prohibited solar contractors from installing solar panels paired with batteries for energy storage.

The regulations would have been devastating to California’s solar contractors and their workers, as well as to consumers who are increasingly demanding solar and storage installations in the face of repeated and prolonged electrical power shutdowns. The regulations would have also frustrated the state’s intensifying efforts to deploy solar and storage projects as quickly and as widely as possible to combat climate change and address energy shortfalls caused by extreme weather events.

The Contractors State License Board (CSLB) considered the new regulations at the urging of investor-owned utilities facing competition from distributed energy generation and storage. While the CSLB did so under the guise of safety concerns, it could not identify a single instance in which a battery installation by a California solar contractor caused serious damage or injury.

Nonetheless, the Board voted last year to prohibit licensed solar contractors from continuing to install battery energy storage systems. The Board announced the new regulation in a series of industry bulletins and provided solar contractors with just 90 days to cease all solar and storage work, obtain an additional license, and/or replace their workforce for solar and storage jobs.

SMW filed litigation challenging CSLB’s adoption of the regulation for failing to comply with the notice and comment rulemaking procedures required by the California Administrative Procedure Act (APA). The Legislature adopted the APA to ensure that state agencies such as the CSLB consider proposed rules in a transparent manner, consider public input, base their decisions on facts, and fully consider alternatives. Regulations adopted outside of these procedures are invalid “underground regulations.” The CSLB immediately halted enforcement of the bulletins after SMW filed the lawsuit.

In a July 2022 settlement negotiated by SMW, the CSLB agreed to rescind its underground regulation prohibiting battery installations by solar contractors, and to follow notice and comment rulemaking procedures for any future regulation of solar contractors.

For more information please contact partner Heather Minner at minner@smwlaw.com.