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The 'Grandfathering' Clause

Terrified of rule changes? Solar interconnection agreements usually 'grandfather' you in for 20 years. Waiting only risks losing the current good rates.

July 02, 2025 • 4 read
Time running out on solar deals

You hear rumors that the utility company is trying to kill Net Metering. You read about California's disaster with NEM 3.0.

You decide to wait. "I'll see how the laws shake out before I buy."

The Trap Waiting is the worst possible move.

In utility regulation, there is a concept called Grandfathering. It means that if you sign a contract under the current rules, you are locked into those rules for 20 years, even if the rules change for everyone else tomorrow.

The Utility's Goal Utilities hate Net Metering. They hate paying you retail rates for your power. They are lobbying in every state capitol to lower the credit rate to zero.

The trend is always the same: The deal gets worse over time. * 2015: 1-for-1 Retail Credit. * 2020: Retail Credit minus non-bypassable charges. * 2025: Wholesale Credit (Avoided Cost).

If you install solar today, you lock in today's deal. If you wait until next year, you might be stuck with the new, worse deal.

Pro Tip From the Field "Grandfathering isn't just about savings; it is about Resale Value.

In California right now, there are two types of solar homes: NEM 2.0 Homes and NEM 3.0 Homes.

If I am listing a house, I put in bold print: 'GRANDFATHERED NEM 2.0 SYSTEM - TRANSFERABLE.'

That status transfers to the new buyer. Buying that house means the new owner gets paid 4x more for their solar power than if they built a new house next door. That piece of paper from the utility company is worth $20,000 in home equity. Don't lose it by waiting."

FAQ: Rule Changes

  • Q: Can the utility break the grandfathering promise?
    • A: Extremely rare. It would trigger massive class-action lawsuits. The Interconnection Agreement is a binding contract for a set term (usually 20 years).
  • Q: If I add more panels, do I lose grandfathering?
    • A: YES. Be careful. Usually, you can add up to 10% or 1 kW without triggering a review. If you double your system size, they will force you onto the new, worse rate plan.
  • Q: Does grandfathering apply to the Tax Credit?
    • A: No. The Tax Credit is based on the year you install. Grandfathering applies to the Utility Rate Plan (Net Metering)."