Rooftop solar installation has plummeted in LA. Why?

Rooftop solar installations have plummeted in the city of L.A. in recent years, according to a data analysis by LAist and Crosstown LA.

It’s a trend across California after the state’s utility regulators cut incentives drastically in 2022.

But that policy change applied only to the big three investor-owned electricity providers — Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric. City-owned utilities, such as the L.A. Department of Water and Power, were not affected by that change.

So why has rooftop solar adoption dropped in L.A. city limits?

What the data say

LAist and Crosstown LA analyzed permitting data to understand how rooftop solar adoption has changed in the city over the past five years. We found that, after years of growth, rooftop solar permits in Los Angeles have dropped by nearly a quarter.

Permits for rooftop solar installations reached a high of 10,513 in 2022 but have since dropped to 7,967 in 2024. Through the first six months of 2025, there were 3,729. (The data analyzed across all years were city electrical permits classified as solar and noting an installation. Depending on how permits were classified, slight under- or over-counting is possible.)

Reasons behind the drop

LADWP customers still have a generous incentive to put solar panels on their rooftops — customers with net energy meters receive bill credits for the energy their solar systems send back to the grid. These compensation rates match the rates customers pay for their energy usage.

Comparatively, new rooftop solar customers in Southern California Edison territory get paid back about 75% less than the rate. While that change has reduced solar panel adoption, it is expanding battery storage, though slowly.

David Jacot, LADWP’s director of distributed energy solutions, said he's not sure why there’s been such a significant drop in installs, but he offered several theories.

“We think the market is somewhat saturated in terms of early adopters who have the interest and the means and have already largely installed systems,” Jacot said.

He added that rising household costs and inflation, which has raised the cost of solar panels themselves, may also be a factor. Lastly, he said, the changes to incentives at the state level have led to solar companies leaving the state. The Trump administration’s cuts to federal tax credits for solar will also slow adoption, Jacot predicts.

By 2018, LADWP also had phased out past incentive programs and paid out the last of rebates available to help cover the cost of solar installation. But Jacot said he doesn’t think that’s the reason for the big drop since 2022.

“2022 was the peak, so we don't think that not having an upfront incentive for solar systems necessarily had anything to do with the recent fall off,” Jacot said.

City utilities have never led in solar adoption

The main driver of solar adoption across the state has been the high cost of electricity, said Severin Borenstein, director of UC Berkeley Haas Energy Institute. And municipal utilities, such as LADWP, have long had lower rates than investor-owned utilities such as Southern California Edison, which means residents are less likely to adopt solar.

“If you just look at LADWP’s rates relative to the investor-owned utilities, they have always been substantially lower,” Borenstein said. “For the last 25 years in the lifetime of rooftop solar, they’ve been substantially lower.”

LADWP’s rates are between 19 cents and 38 cents per kilowatt hour, depending on your consumption tier and time of year. Southern California Edison’s rates are between 27 cents and 72 cents per kilowatt hour, depending on time of use and climate.

Still, LADWP has far more generous net energy metering than most other municipal utilities, which is surprising, Borenstein said. There was a boost in solar installation as part of former Mayor Eric Garcetti’s “Green New Deal,” but since then, political leadership hasn’t pushed for additional solar policy beyond net energy metering.

“ I think that municipal utilities have been much more resistant to generous rooftop solar policy subsidies than the investor-owned utilities, which take their direction from the California Public Utilities Commission,” Borenstein said. “And the CPUC is a statewide political organization and has been much more aggressive in subsidizing rooftop solar.”

But municipal utilities have never been leaders in rooftop solar adoption, “and they aren’t now,” said Borenstein.

Solar plus batteries seen as next step

As the largest public utility in the nation, LADWP can pull a lot of weight in the transition to clean energy and has set ambitious goals to run entirely on clean energy by 2035.

Rooftop solar can help with that while also reducing the need to build massive solar farms in the desert — in L.A., solar panels on rooftops, mostly people’s homes, currently supply about 7% of the city’s total energy use, Jacot said.

But Jacot said the utility is now turning its focus to residential batteries.

“ Frankly, we don't want to encourage solar-only projects at this point. We really want to get the batteries,” he said.

That’s because electricity demand goes up as the sun sets — just when solar panels stop generating power.

Before the end of this year, Jacot said, LADWP will launch a new battery incentive program through the state-funded Self-Generation Incentive Program to help low-income homes install solar plus battery storage. LADWP will distribute more than $30 million in incentives.

And that shift to batteries will also likely lead to a change in LADWP’s net energy metering, similar to what the state has done.

“The net energy metering program that we currently have will most likely get revisited in our next power rate action, but we don't have any timeline on exactly what that's going to look like,” Jacot said. “ In the meantime, we can pursue what we're doing on the battery side while [net energy metering] is currently operating as is.”

Erin Stone is LAist's climate reporter. Mallika Seshadri writes for Crosstown LA and is a USC graduate student.