- While the approved pilot is limited to one utility, the policy precedent set by the California Public Utilities Commission marks a major milestone on the path to a more affordable and inclusive clean energy transitions that can benefit more Californians and put downward pressure on rates for all.
- Southern California Edison (SCE) is now authorized to finalize a tariff for making site-specific investments with site-specific cost recovery for money-saving distributed energy upgrades. Its pilot is anticipated to open within 18 months.
- The decision authorizes SCE to advance not only building efficiency and appliances but also additional clean energy upgrades with estimated bill savings, including solar energy and battery storage.
- The decision reinforces strong consumer protections and field-leading assurance protocols for participant bill savings.
- The decision follows years of determined work by environmental justice and clean energy advocates building on their successful passage of SB350 in 2015.
The California Public Utilities Commission (CPUC) issued a decision on December 18, 2025, to pilot inclusive utility investments in clean energy upgrades for single-family and multi-family housing. This policy precedent marks a major step forward for California residents, broadening inclusion in the clean energy economy. When implemented at scale, this policy could enable faster and more affordable energy transitions, while advancing the state’s health, equity, and decarbonization goals.
The state’s decision caps 10 years of advocacy by environmental justice campaigners and clean energy advocates who won enactment of SB 350 in 2015. This law directed the California Energy Commission (CEC) to study barriers preventing low-income communities from accessing energy efficiency and renewable energy upgrades. After 16 months of hearings, workshops, and comments, CEC concluded in 2016 that financing was a key barrier and recommended the CPUC consider approving inclusive utility investment as a solution to expand access to clean energy upgrades.
In 2019, The Greenlining Institute’s Equitable Building Electrification Framework called on state decision-makers to find ways to support environmental and social justice households through financing solutions, such as inclusive utility investment, while also identifying more sources of funding for upgrades and energy assistance offerings at no-cost to eligible participants.
Shortly after, the Building Decarbonization Coalition (BDC) opened a stakeholder process to surface fiscally scalable solutions to address long-standing barriers like renter status and credit score requirements that prevent many California households from overcoming upfront costs for clean energy upgrades. BDC engaged 150 stakeholders over six months with workshops and comment rounds to develop four criteria for selecting financial solutions. After evaluating all options, use of a utility tariff for site-specific investment and cost recovery was the only solution that met the criteria, as described in their report, Towards an Accessible Financing Solution.
California’s experience over the past decade has demonstrated that neither consumer lending products nor ratepayer funding alone have been able to scale deployment of distributed energy upgrades consistent with the state’s climate targets and the CPUC’s Social and Environmental Justice Action Plan.
In 2020, the CPUC ordered a new rule-making on Clean Energy Financing Options (R.20-08-022), directing for-profit utilities to propose clean energy financing solutions for utility customers to improve energy efficiency, reduce greenhouse gas emissions, and/or support customers’ on-site energy needs.
Silicon Valley Clean Energy and Southern California Edison advanced proposals for inclusive utility investment (referred to as “tariff on-bill investment” in R.20-08-022) while other utilities and stakeholders proposed loan products. The CPUC then decided in October 2023 to direct the utilities to collaborate in a Tariff On-Bill Working Group, including an Equity Committee with open participation, to produce a Joint Proposal for submission in the spring of 2024.
Earlier this year, parties to the proceeding were invited to comment on the overall Joint Proposal and each utility’s individual pilot proposal (which all generally aligned with the Joint Proposal’s framework).
After reviewing all comments, the CPUC proposed a decision that would approve Southern California Edison’s (SCE) pilot, and parties were then invited to comment on the proposed decision. The Greenlining Institute, Green for All, Rewiring America, and VEIC contributed significantly to the record along with the utilities and others. The resulting CPUC decision:
- Enables renters to participate and directly benefit from clean energy upgrades;
- Demonstrates field-leading participant assurances of bill savings—critical to expanding service to customers of all income levels on terms that are just, reasonable, and fair;
- Expands estimated bill savings opportunities through additional clean energy technologies—including solar and battery storage—that SCE can propose as it finalizes implementation plans;
- Seeks confirmation from the California Department of Financial Protection and Innovation (DFPI) that inclusive utility investments are considered part of a utility’s services at a participant’s premises.
The lowest cost path to a clean energy future includes widespread access to both energy efficiency and clean energy upgrades that support grid flexibility. This requires financial solutions that are inclusive, financially sustainable, and scalable—a challenge the Clean Energy Financing Options proceeding was initiated to address. With the CPUC’s decision, inclusive utility investment is a new tool in California’s toolbox, marking an important step toward more affordable and faster clean energy transitions.
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