News Summary
Rooftop solar installations in Los Angeles have seen a 25% decline, with permit numbers dropping significantly since 2022. Despite generous incentives from LADWP, the decrease is attributed to various factors, including a saturated market, rising costs, and changes in state incentive policies. The LADWP plans to shift focus towards residential battery storage systems and is expected to launch a new incentive program targeting low-income households in the near future.
Rooftop Solar Installations Decline in Los Angeles
Los Angeles is witnessing a significant decline in rooftop solar installations, with permits dropping nearly 25% after reaching a peak of 10,513 in 2022. The number of permits fell to 7,967 in 2024, and only 3,729 have been recorded through the first six months of 2025. This trend comes despite continued generous incentives from the Los Angeles Department of Water and Power (LADWP), which operates independently from the state’s investor-owned utilities.
Impact of Incentive Changes
The decline in solar installations follows the California Public Utilities Commission’s (CPUC) severe cuts to state incentives for rooftop solar in 2022. These changes have primarily affected investor-owned utilities, but they have also influenced perceptions around solar investments statewide. In contrast, LADWP customers benefit from favorable incentives that include bill credits at retail energy rates for excess solar energy fed back into the grid. This is significantly better than what customers of Southern California Edison receive, which is approximately 75% lower.
Factors Contributing to the Decline
The reduction in rooftop solar installations can be attributed to various factors. A saturated market among early adopters has reached a point where many potential customers have already adopted solar technology. Additionally, the increase in household costs and inflation has raised prices for solar panels and installation services, driving some consumers away from investing. The exit of numerous solar companies from California due to the incentive cuts further complicates the landscape.
While LADWP phased out previous incentive programs and stopped issuing rebates by 2018, LADWP directors suggest that the absence of upfront incentives may not be the main reason for the current drop in installations.
Economic Comparison and Historical Trends
Historically, high electricity rates have prompted residents to adopt solar solutions as a means to reduce energy costs. However, LADWP has maintained relatively low electricity rates, between 19 to 38 cents per kilowatt hour. This stands in stark contrast to Southern California Edison, where rates range from 27 cents to 72 cents, reducing the incentive for Los Angeles residents to install rooftop solar.
Solar adoption in Los Angeles previously saw a boost during former Mayor Eric Garcetti’s “Green New Deal,” yet subsequent administrations have not prioritized solar policies, leading to a stagnation in new initiatives.
Current Energy Demand and Future Initiatives
Despite record energy demands and heat waves, Los Angeles has not exceeded a peak energy demand of 6,500 megawatts since 2017. Factors such as energy conservation and the adoption of energy-efficient technologies have played a role in maintaining this level. Looking ahead, LADWP plans to focus on residential battery storage systems rather than solely promoting solar installations. This change is intended to address the fact that electricity demand often peaks after solar generation ends.
A new incentive program targeting battery storage is expected to launch, with LADWP allocating over $30 million to assist low-income households with solar and battery installation.
Regulatory and Legal Challenges
Ongoing regulatory issues remain critical as the CPUC’s controversial reductions to pay rates for excess solar energy credits, known as Net Energy Metering (NEM), have sparked legal disputes. Environmental groups have expressed concerns regarding the policy changes, arguing they overlook the broader benefits of rooftop solar. Recently, the California Supreme Court ruled that the CPUC had received undue deference in its decisions, sending the case back to an appeals court for reconsideration.
Moreover, legislative efforts, such as Assemblymember Lisa Calderon’s bill AB 942, seek to reform Net Energy Metering structures to better accommodate low-income customers while ensuring the sustainability of solar initiatives in the state.
Deeper Dive: News & Info About This Topic
HERE Resources
California Addresses Key Social, Economic, and Environmental Issues
California’s AB 942: Changes in Rooftop Solar Incentives
California’s Community Solar Projects Face Funding Delays
California’s Business Landscape Shifts with New Openings and Closures
California Lawmakers Vote on Controversial Solar Bill AB 942
Additional Resources
- LAist: Rooftop Solar Installations Decline in Los Angeles
- LA Times: Environmentalists Challenge Rooftop Solar Incentives Cuts
- CBS News: California Supreme Court and Rooftop Solar Credits
- Edison Newsroom: Correcting the Record on Rooftop Solar Reform
- LA Times: California’s Rooftop Solar Infighting
- Wikipedia: Solar Energy
- Google Search: Rooftop Solar Installations Los Angeles
- Google Scholar: Rooftop Solar Incentives
- Encyclopedia Britannica: Solar Energy
- Google News: Rooftop Solar California
Author: STAFF HERE HOLLYWOOD
The Hollywood Staff Writer represents the experienced team at HEREHollywood.com, your go-to source for actionable local news and information in Hollywood, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Hollywood Bowl summer concerts, the Hollywood Christmas Parade, film premieres at TCL Chinese Theatre, and festivals at the Magic Castle. Our coverage extends to key organizations like the Hollywood Chamber of Commerce and Visit Hollywood, plus leading businesses in entertainment, dining, and tourism that define the local economy. As part of the broader HERE network, including HERELosAngeles.com, HEREBeverlyHills.com, HEREAnaheim.com, and HEREHuntingtonBeach.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
