California Governor Gavin Newsom’s pen was busy on the last day of the 2026 legislative session. The outgoing chief executive signed dozens of bills (and vetoed a few) in the final hours of Sept. 30, 2026, bringing the total number of bills that reached his desk during the session to 1,160.
Among the bills acted upon by Newsom on the day were several that have implications for clean energy and climate. The governor signed bills that establish plug-in solar rules, make it easier for farmers to build solar projects on water-starved land where farming is no longer viable and enable greater participation for virtual power plants in the state’s wholesale energy market.
Newsom also vetoed one important solar-related bill — AB 1813 — which would have created a statewide community solar framework.
Virtual power plants and grid utilization
SB 905 and SB 913, both authored by Senator Josh Becker, represent an aggressive push to lower skyrocketing utility bills by calling upon coordinated networks of customer-owned batteries, smart thermostats, and EVs instead of building expensive new grid infrastructure.
SB 905 establishes a grid utilization metric for the distribution and transmission grids, requires the state’s largest utilities to track and report on grid utilization and provides a pathway for the CPUC to mandatory establish utilization targets for the utilities to meet. SB 913 directs the Commission to establish a valuation methodology for virtual power plants (VPPs) made up of customer-sited batteries that export to the grid during grid stress.
Historically, fleets of customer devices have been restricted in the state’s Resource Adequacy (RA) market, only receiving credit for reducing an individual home’s electricity consumption. The RA program is designed to ensure the safe and reliable operation of the grid by incentivizing the buildout of energy resources needed to ensure grid reliability.
“The solar and storage industry is pleased to see Governor Newsom sign numerous bills that will support reliable electricity generation and transmission and increase access to the cost-saving benefits of solar and storage,” said Stephanie Doyle, California state affairs director for the Solar Energy Industries Association in a statement. “SB 913 will modernize rules to allow aggregated distributed energy resources to help stabilize the grid and lower electricity prices at times of peak demand.”
The grid utilization metrics of SB 905 go hand-in-hand with the increased usage of VPP resources. The pathway provided in the bill that allows the CPUC to require improvements in utilization creates opportunities for VPPs to be called upon to shift usage away from distribution circuits that are constrained during peak times.
“Customer batteries are already moving electricity usage away from the hours that are most expensive for utilities, but these new laws will take that to another level by operating batteries as a network that can more precisely target the hours when utility costs spike,” said Brad Heavner, executive director of the California Solar and Storage Association (CALSSA). “Resources installed on garages and campuses can provide energy cheaper than building new power lines to faraway power plants. It’s crazy for the utilities to spend money on power lines when there is energy stored right in the neighborhoods where it’s needed.”
Regulators have until June 30, 2028, to finalize the rules that give VPPs a clear route to compete alongside conventional gas power plants.
The Community solar veto
AB 1813 (the Community Renewable Energy Program Act of 2026), authored by Assemblymember Chris Ward, was designed to make the financial benefits of solar energy accessible to Californians who cannot install rooftop panels themselves.
The bill would have created a statewide community solar framework and allowed California residents to subscribe to local, shared community solar projects and receive a credit directly on their utility bills for the energy their share generated, effectively bypassing the need to own a roof.
It would have further directed the CPUC to evaluate community solar facilities — specifically those paired with battery storage — as load-modifying resources rather than wholesale generators. This classification would have allowed the facilities to earn energy credits based on the CPUC’s avoided cost calculator. While not equal to retail rates, the ACC values are higher than the rate paid for wholesale energy, and could have made community solar installations more economically viable.
The bill was the legislature’s latest attempt to create a workable community solar program, following the CPUC’s decision to finalize what advocates called an “unworkable” community solar program in response to 2022’s AB 2316 — also penned by Assemblymember Ward.
AB 1813 passed through both houses of the legislature and was presented to Newsom on Sept. 14. On the last day of the session, the Governor vetoed the bill.
In a statement related to the veto, Newsom wrote that the bill was “structurally flawed,” adding that it “would effectively require an administratively set price for the generation of power that exceeds the value that generation provides to the grid.”
Solar industry advocates expressed their disappointment (and in some cases, disagreement) with the Governor’s decision.
“Governor Newsom’s veto of AB 1813 is a missed opportunity for California ratepayers, low-income households, and the state’s renewable energy economy,” said Aaron Halimi, founder and CEO of community solar developer Renewable Properties, in comments to pv magazine USA. “Unfortunately, this veto relies on outdated and erroneous cost assumptions, while a comprehensive analysis by Aurora Energy Research found that AB 1813 could have saved California ratepayers $6.5 billion in total system costs over 20 years compared with the status quo of utility-scale alternatives.”
SEIA’s Stephanie Doyle also weighed in, saying: “We are disappointed to see Governor Newsom continue to prevent the Golden State from establishing a viable, scalable community solar with his veto of AB 1813. The solar industry looks forward to continuing to work with legislators and the next Governor to finally create a community solar program that Californians want and deserve.”
Other notable energy bills signed by Newsom on Sept. 30 include:
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