States voting to roll back clean energy incentives are doing so at a time when electricity demand and rates are rising, which developers and clean energy groups find counterintuitive.
In 2025, electricity demand from data centers grew 17% worldwide, while in the United States data centers accounted for half the growth, according to the 2026 edition of the International Energy Agency’s (IEA) Global Energy Review.
The U.S. is also seeing an upward trajectory in electricity costs to ratepayers. According to Electric Power Monthly from the Energy Information Administration, the average rate in March 2026 was 18.56 cents per kilowatt hour, up from 17.09 the previous March. The highest rates were seen in Hawaii at 42.23, followed by California at 33.35.
States have an opportunity in incentivizing clean energy, according to James McGarry, regional director, west, of the Coalition for Community Solar Access. He emphasized the speed at which distributed solar and storage can be deployed, which can “relieve local grid constraints and expand access to clean energy for customers who need it most.”
California
An example of what many experts consider regressive policy is the recent decision by California Public Utility Commission (CPUC). The Solar Energy Industries Association (SEIA) says the program that relies on the existing Renewable market Adjusting Tariff (ReMAT) pricing structure “virtually ensures” that no new community solar projects will be developed in the state. The new program rejects the solar industry-backed Net Value Billing Tariff model, making building community solar a losing proposition for any business, according to SEIA and other industry advocates.
For more on the history of the CPUC’s decision, read California community solar market lies in limbo.
According to McGarry, the recent CPUC move “represents yet another significant step backward for community solar in California… It omits core elements such as how to enroll customers, bill savings requirements, low-income participation pathways, and alignment with the state’s Title 24 building requirements.”
As a solution, clean energy groups are pushing for passage of AB 1813 to bypass the CPUC’s framework and establish what McGarry called “a functional, financeable community solar program by law.”
If passed, AB 1813, authored by California Assemblymember Chris Ward, will require the CPUC to establish a workable community renewable energy program by September 1, 2027 by prioritizing access and real bill savings for renters and low-income Californians. In May the bill passed in the assembly and moved to the state senate. Upon passage, Derek Chernow, executive director of Californians for Local, Affordable Solar and Storage (CLASS), said “we look forward to working with our champions in the California Senate to keep this momentum going and get AB 1813 to the Governor’s desk.”
Massachusetts
On the other side of the country, the Massachusetts House advanced HB 5151, a climate bill with a $1 billion cut to the state’s energy efficiency program. The bill, which passed in the House 128 to 27, has conservation and renewable energy groups saying it doesn’t go far enough to boost affordability or quell use of fossil fuels.
The bill has provisions that advance solar while also cutting funding to its successful Mass Save program, leaving industry groups in disagreement. The Coalition for Community Solar Access (CCSA), a national trade national trade association working to expand customer choice and access to solar for all, lauded the bill and said, “Importantly it recognizes that clean energy is not the cause of high bills, but part of the solution to lower them.”
On the other hand, Vote Solar, a non-profit policy advocacy organization with the mission of making solar more accessible and affordable across the United States, found fault with the $1 billion in cuts to Mass Save. The group sees these cuts as short sighted and believes the bill should instead have focused on a “long-term solution to address energy affordability.”
Maine
One year ago, Maine’s governor signed a bill into law making community solar and other front-of-the-meter projects ineligible for net metering. The bill LD 1777 received backlash from solar advocates because it places retroactive charges on front-of-the-meter solar projects that are already operating or in development.
Matthew White, senior manager of policy & market strategy at Aspen Power, a distributed energy generation platform, an independent power provider and developer of solar projects, told pv magazine USA that LD 1777 “is the most direct example of retroactive policymaking phenomenon.”
The law imposes substantial fees on all net energy billing (NEB) projects >1 MWac without any form of grandfathering. “This materially changes the expected returns for community solar assets, which has led to a profound impact on financing arrangements that are already in place for operating projects,” White said.
Maine’s LD 1777 effectively put an end to Maine’s community solar program in January 2026; however, the state’s energy officials are tasked with developing a new renewable energy incentive plan by September 2026.
The justification for such regressive policies is that they will make energy more affordable for ratepayers; however, as White points out, these retroactive changes can raise the cost of capital, making project economics unworkable and leading developers to exit the market and bring their investments to other states.
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