October 21, 2022

What to Know About AB 2143, California’s New Renewables Prevailing Wage Law

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After December 2023 a new law will impact large renewable energy developments, including solar, in California. Assembly Bill (AB) 2143, which was signed in February 2022, includes new prevailing wage requirements on large solar energy projects that opt-in to receive net energy metering, as well as tools for enforcement and goal setting. While industry response to the bill has been mixed, it may be helpful to frame this law as a catalyst for new short-term and long-term strategies in the solar industry.

What’s in AB 2143?

AB 2143 requires prevailing wages for all construction workers and apprentices who work on renewable energy projects that are under NEM contracts, unless the project (a) is a residential facility with a maximum generating capacity of less than 15kw, (b) a single family home, (c) a facility that serves only a modular home, a modular home community, or a multifamily housing development under 2-stories.

Solar contractors who work on these qualifying large projects will have to submit payroll records twice a year to the Public Utilities Commission to verify their compliance. Projects built by “willfully” noncompliant contractors will not be able to receive electricity service under the NEM contracts.

Finally, AB 2143 designates new reporting requirements for the California Public Utilities Commission (CPUC). Every year CPUC will be required to publish information on where solar is, or is not, growing in disadvantaged communities.

Responses to AB 2143

When AB 2143 was proposed, industry response was mixed. The California State Association of Electrical Workers and the Coalition of California Utility Employees both provided arguments in support of the bill, arguing that the law would improve safety and equity for workers and make it easier to track whether or not solar is making it to underserved communities.

Members of the private solar community expressed worries, however. Among them, solar installer Sungenia wrote about the law’s potential to make solar more expensive, particularly in inland areas that require more electricity and, often, larger solar panel systems. California Solar + Storage Association (CALSSA) also submitted comments to California legislators regarding the bill, expressing concern that the bill would slow solar adoption and hurt small businesses and affordable housing and commercial projects.

Opportunities for the Future

Now that the bill has become law, California solar professions can plan for both near-term and long-term strategies around AB 2143. On each time horizon, there are, arguably, opportunities to embrace.

In the near-term, solar developers may want to start preparing for the end of 2023. If firms have been considering large-scale projects, 2022 and 2023 could be the time to get them underway. This is particularly true if the projects will become less viable after AB 2143 goes into effect.

Over the long-term, the California solar community can also leverage AB 2143 as an opportunity to build a strong reputation for being a well-paying industry. This reputation, in turn, can be used to attract top talent. With solar projected by SEIA and Wood Mackenzie to increase 40% through 2027, the industry may need more workers in the coming years and competitive pay is one way to attract and keep high-performing personnel.

Additionally, AB 2143’s reporting requirements may generate data over time that reveals which communities in California need more engagement from the industry community to facilitate wider solar adoption. Hopefully, this will result in win-win relationships between solar and the public

In summary, while the law only applies to projects over 15kw, this law may cause ripples throughout the industry. AB 2143 is set to bring changes and, hopefully, opportunities to the world of solar.




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