California solar panel owners who make money by selling excess electricity back to the grid have their biggest incentive in jeopardy. The state’s largest power utilities have asked California officials to reduce the amount of money homeowners can make by contributing electricity to the grid. If officials comply with utility companies’ requests, the widespread adoption of solar could be hindered, a risk that some California lawmakers may not be ready to take.
California stands as the United States’ largest market for rooftop solar panels. The widespread adoption has been fueled by a favorable climate and environmentally-friendly incentives that encourage residents to go green. Because of the state’s success with convincing residents to switch to solar, other territories within the U.S. have used California’s policies as a template for their own fights against the use of fossil fuels that drive climate change.
This week, the California Public Utilities Commission is hosting utility companies, solar representatives, ratepayer advocates, and others, who are presenting their ideas on potential policy reforms, Reuters said. Policies will be effective in the coming years if passed.
Proposals presented over the past several days have focused on net metering, a policy that allows homeowners to profit off of the excess energy that is produced from solar panels that are equipped on their homes. When solar panels capture the sun’s energy, not all of it is always used. This excess energy is then given back to the grid. It can help power other homes in the event of energy shortages, which is a common occurrence in California due to the massive population. In the state last year, heatwaves caused blackouts in some areas due to the lack of available energy in the grid.
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Net metering has been a selling point for some solar installation companies like Tesla and Sunrun, but small, local firms also benefit. This has caused California’s three investor-owned utility companies, Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison, to recommend monthly charges of between $49 and $79 for solar owners for a 5-kilowatt system while compensating them for excess power, but the payout would be less.
Solar representatives are not keen on the idea because the incentives drive solar adoption. Executive Director of the California Solar & Storage Association Bernadette Del Chiaro believes that taking away the incentives could be detrimental to the environment.
“If we really put the brakes on rooftop solar today… we’re going to be in a world of hurt in 10 years when you wake up and realize ‘We actually do need to build (more solar panels),’” Del Chiaro said in an interview.
Net metering could be gradually reduced as solar trade groups are proposing a scheduled reduction over the next five years. By 2027, the rates would range between 25% and 50% lower than what they are currently, depending on the utility company that is used.
Energy
Tesla inks multi-billion-dollar deal with LG Energy Solution to avoid tariff pressure
Tesla has reportedly secured a sizable partnership with LGES for LFP cells, and there’s an extra positive out of it.
Tesla has reportedly inked a multi-billion-dollar deal with LG Energy Solution in an effort to avoid tariff pressure and domesticate more of its supply chain.
Reuters is reporting that Tesla and LGES, a South Korean battery supplier of the automaker, signed a $4.3 billion deal for energy storage system batteries. The cells are going to be manufactured by LGES at its U.S. factory located in Michigan, the report indicates. The batteries will be the lithium iron phosphate, or LFP, chemistry.
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It is a move Tesla is making to avoid buying cells and parts from overseas as the Trump White House continues to use tariffs to prioritize domestic manufacturing.
LGES announced earlier today that it had signed a $4.3 billion contract to supply LFP cells over three years to a company, but it did not identify the customer, nor did the company state whether the batteries would be used in automotive or energy storage applications.
The deal is advantageous for both companies. Tesla is going to alleviate its reliance on battery cells that are built out of the country, so it’s going to be able to take some financial pressure off itself.
For LGES, the company has reported that it has experienced slowed demand for its cells in terms of automotive applications. It planned to offset this demand lag with more projects involving the cells in energy storage projects. This has been helped by the need for these systems at data centers used for AI.
During the Q1 Earnings Call, Tesla CFO Vaibhav Taneja confirmed that the company’s energy division had been impacted by the need to source cells from China-based suppliers. He went on to say that the company would work on “securing additional supply chain from non-China-based suppliers.”
It seems as if Tesla has managed to secure some of this needed domestic supply chain.
Energy
Tesla Shanghai Megafactory produces 1,000th Megapack for export to Europe
The Shanghai Megafactory was able to hit this milestone less than six months after it started producing the Megapack.
Tesla Energy has announced a fresh milestone for its newest Megapack factory. As per the electric vehicle maker, the Shanghai Megafactory has successfully produced its 1,000th Megapack battery.
The facility was able to hit this milestone less than six months after it started producing the grid-scale battery system.
New Tesla Megapack Milestone
As per Tesla Asia in a post on its official accounts on social media platform X, the 1,000th Megapack unit that was produced at the Shanghai Megafactory would be exported to Europe. As noted in a CNEV Post report, Tesla’s energy products are currently deployed in over 65 countries and regions globally. This allows Tesla Energy to compete in energy markets that are both emerging and mature.
To commemorate the 1,000th Megapack produced at the Shanghai Megafactory, the Tesla China team posted with the grid-scale battery with celebratory balloons that spelled “Megapack 1000.” The milestone was celebrated by Tesla enthusiasts on social media, especially since the Shanghai Megafactory only started its operations earlier this year.
Quick Megafactory Ramp
The Shanghai Megafactory, similar to Tesla’s other key facilities in China, was constructed quickly. The facility started its construction on May 23, 2024, and it was hailed as Tesla’s first entry storage project outside the United States. Less than a year later, on February 11, 2025, the Shanghai Megafactory officially started producing Megapack batteries. And by March 21, 2025, Tesla China noted that it had shipped the first batch of Megapack batteries from the Shanghai plant to foreign markets.
While the Shanghai Megafactory is still not at the same level of output as Tesla’s Lathrop Megafactory, which produces about 10,000 Megapacks per year, its ramp seems to be quite steady and quick. It would then not be surprising if Tesla China announces the Shanghai Megafactory’s 2,000th Megapack milestone in the coming months.
Energy
Tesla launches first Virtual Power Plant in UK – get paid to use solar
Tesla has launched its first-ever Virtual Power Plant program in the United Kingdom.
Tesla has launched its first-ever Virtual Power Plant program in the United Kingdom. This feature enables users of solar panels and energy storage systems to sell their excess energy back to the grid.
Tesla is utilizing Octopus Energy, a British renewable energy company that operates in multiple markets, including the UK, France, Germany, Italy, Spain, Australia, Japan, New Zealand, and the United States, as the provider for the VPP launch in the region.
The company states that those who enroll in the program can earn up to £300 per month.
Tesla has operated several VPP programs worldwide, most notably in California, Texas, Connecticut, and the U.S. territory of Puerto Rico. This is not the first time Tesla has operated a VPP outside the United States, as there are programs in Australia, Japan, and New Zealand.
This is its first in the UK:
Our first VPP in the UK
You can get paid to share your energy – store excess energy in your Powerwall & sell it back to the grid
You’re making £££ and the community is powered by clean energy
Win-win pic.twitter.com/evhMtJpgy1
— Tesla UK (@tesla_uk) July 17, 2025
Tesla is not the only company that is working with Octopus Energy in the UK for the VPP, as it joins SolarEdge, GivEnergy, and Enphase as other companies that utilize the Octopus platform for their project operations.
It has been six years since Tesla launched its first VPP, as it started its first in Australia back in 2019. In 2024, Tesla paid out over $10 million to those participating in the program.
Participating in the VPP program that Tesla offers not only provides enrolled individuals with the opportunity to earn money, but it also contributes to grid stabilization by supporting local energy grids.
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