More Californians are pairing batteries with solar panels after regulatory changes last year cut profits for solar alone. But the state is adding new restrictions on which contractors can install those batteries.

According to the U.S. Energy Information Administration (EIA), the portion of new home solar photovoltaic systems paired with batteries rose to 50% in April, 2024, up from just over 20% in October, 2023. All of the state’s residential solar installations that generate less than 1 megawatt deliver a combined capacity of more than 12,000 MW.

“The shift toward more battery storage at solar installations eligible for net metering came after changes to California’s compensation structure,” the EIA reports, referring to the net billing tariff that began in April, 2023.

New rooftop solar installations averaged about 8,000 per month in the first quarter of 2024, “a lower rate of rooftop solar installation than in any month under net metering, going back to May, 2020,” Canary Media reported in May.

The tariff changed how residents with installed solar panels are paid for selling electricity back to the grid. Though the change overall cut the rates that rooftop solar owners could receive—by basing compensation on avoided costs rather than retail rates—it also introduced a variable rate structure that created an incentive to pair solar with battery storage.

With the variable rate, people with rooftop solar+storage installations can increase their returns by adjusting the time of day when they sell electricity to the grid—such as in the evening when demand is relatively high but solar generation is low. But the average compensation rate is still less than under the earlier structure, EIA says.

Now, climate groups are protesting a move by the state’s Contractors State Licensing Board (CSLB), which revised its rules to bar some solar installers from installing or warranting battery systems, depending on the type of licence they have, Canary Media says. This is a major change for contractors with C-46 licences who have been installing battery systems in conjunction with photovoltaic solar systems since 1982.

The CSLB defends the move, saying it will ensure the safety of battery systems, though research shows no unsafe outcomes from batteries installed by C-46 solar contractors among the more than 100,000 projects already in place across the state. Electrical workers’ unions support the revision, claiming it “doesn’t impact those in the industry from doing the work, it just requires them to have the proper licence,” in the words of John Doherty, business manager at the International Brotherhood of Electrical Workers (IBEW) Local 6 in San Francisco, which represents workers of Pacific Gas & Electric, a major utility in northern and central California.

But climate advocates say the revision is onerous and will slow down the expansion of rooftop solar with batteries, putting a strain on solar companies that will need to increase the number of workers they need to complete a project.

“Since 2018, the three investor-owned utilities with IBEW 1245 have been working to strip away the ability for solar contractors to install batteries,” Bernadette Del Chiaro, executive director of the California Solar and Storage Association, told Canary Media. The association is a party to a lawsuit challenging CSLB’s decision.

“They would love to strip away the ability of solar contractors to install solar as well—but they feel they can’t quite win that. So the next best thing is to strip away the ability to do batteries—and that essentially cuts the solar contractor off from solar.”