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Earnings calls by rooftop solar companies reveal that the battery business is booming.

The solar industry has been sounding the alarm about California’s new rooftop solar billing rules basically since the day they were first proposed in late 2021. The market for residential solar panels in the state — the country’s largest — could contract by 40 percent in 2024, the industry warned, if rules governing the price of energy generated by those panels were changed. A coalition of environmental groups even sued the state earlier this month to stop the changes.
But now that the new billing rules are in effect, it’s becoming clear they may actually open up new opportunities for the solar industry, shifting its business away from trying to throw up as many panels on as many rooftops as possible to selling more complex and dynamic solar-and-storage systems that fluidly work with the state’s whole grid. While the industry at times has marketed residential solar as a way to escape the grid, the new rules recognize that every panel affects everyone else who uses electricity in California, and that for decarbonization to work, more than solar panels are needed.
That being said, the logic of the industry and the environmental groups is pretty straightforward. The old rules, which still apply to existing solar systems as well as those that applied for interconnection before the April 15 deadline, were deliberately generous to encourage mass adoption. The new system has changed how utilities pay for electricity that rooftop solar users sell back to the grid. Instead of paying (California’s quite high) retail price of electricity, the payments are now based on a formula that’s supposed to reflect how much electricity generation the utilities can avoid by buying up rooftop solar supply. While overall payments would be cut by around three quarters for many of those who install rooftop solar after the deadline, the value of energy that could be sold back to the grid when it’s most needed — like on a hot summer evening — could go up.
These rules are then naturally meant to encourage the installation of batteries along with solar panels. If Californians can store the energy they generate, they can functionally shift some of the sunshine from the middle of the day, when demand is low, to the end of it, when demand spikes.
“Battery storage is now a required component for rooftop solar economics in [California],” Morgan Stanley analysts wrote in note to clients.
The industry is putting a brave face on the changes, noting in some cases that they were able to sell a bunch of systems before the April 15 changes as customers presumably raced to lock in the old rules. But now that the new rules are in effect, companies are more than happy to include a battery with a residential solar system. And Californians at least seem to be taking them up on the offer.
“While still early, we are seeing signs of a meaningful acceleration in battery storage adoption in California. This is not too surprising, in our view, given the need for battery storage to arbitrage the varying power prices and export rate differentials under NEM 3.0,” the Morgan Stanley analysts wrote.
Peter Faricy, the chief executive of SunPower, one of the country's largest residential solar companies, told analysts on a May 3 earnings call that business notably picked up in anticipation of the April 15 changes. He also noted how the rules have changed the game for batteries: “For customers in California, I think [batteries will] almost be a standard part of the package now. It just makes a lot of sense to include a battery in the system." Faricy also said about half of SunPower’s direct California customers have bought batteries in recent weeks, up from about 20 percent earlier this year.
For another solar giant, Sunrun, California sales jumped 80 percent in the first quarter in anticipation of the new rules going into effect in April. The company also said it launched a new program called Shift, which allows its customers to store solar power generated in the middle of the day for use during peak cost hours when utility rates are higher. “We are seeing over 85 percent of customers select Shift or battery backup since launch,” the company’s chief revenue officer Paul Dickson said in its May earnings call.
William Berger, chief executive of Sunnova, another big solar company, told analysts in late April there was “a fairly steep drop” following the changes on April 15, but that the portion of new customers getting batteries was “something like north of 60, 70 percent.”
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“So I know some others have talked about, hey, as NEM 3.0 goes, it's going to be great for storage, equipment sales, and, obviously, our service,” Berger said. “I wouldn't extrapolate too much on this, but very early days shows that that's proving itself out very quickly. So we do expect to see a very high attachment rate in California.”
In other words, despite the grousing of the industry, NEM 3.0 may very well be working as it’s intended to.
It’s all part of California’s overall shift in how it thinks about its electricity generation, moving beyond simply deploying as much renewable energy as possible to crafting a renewable-heavy system that actually keeps the lights on 24 hours a day, 365 days a year and serves everyone who needs electricity, not just those who have the financial wherewithal or hobbyist interest to install solar panels. (The old net metering system, the California Public Utilities Commission said, led to $67 to $128 in higher utility costs for low-income households.)
While California is by no means decarbonized — about a third of its electricity comes from renewables, less than what it gets from natural gas — it is the state that has most aggressively attempted to transform how it powers itself, and could thus be a model for what a more mature energy transition looks like in the United States.
Precisely because California has so much solar already installed, the solution’s predictable intermittency issues are an increasing challenge for the grid as a whole. With almost 25 gigawatts of solar installed, the so-called “duck curve” — the graphical representation of the mismatch between solar generation’s daytime peak with demand later in the early evening — has become a “canyon curve,” with net demand crashing quickly sometimes to zero and then rising again at the end of the day.
This means that California needs to figure out how to make its non-carbon generation more flexible, through some combination of storage, demand management, and flexible non-carbon generation like hydrogen.
The California Public Utilities Commission was very explicit about this when they laid out the rationale for the rule changes. “By modernizing NEM, California can incentivize distributed storage and promote electrification, which will provide more value to the electric grid and help California meet its ambitious climate goals even faster,” the Commission said.
And while that may not help solar companies sell as many panels as they like, it sure will help their battery business.
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Current conditions: Floodwaters swept through eastern Iowa, swelling the White River to its highest level in 113 years • A southwest monsoon, or hagabat, has capped off several weeks of storms in the Philippines that, combined, killed nearly two dozen people • Temperatures in Madrid are lingering near 100 degrees Fahrenheit until midweek, when the Spanish capital will cool off into the high 80s; the Greek capital of Athens, meanwhile, is bracing for the exact reverse.
Tropical storms almost never hit the Hawaiian islands directly. The last time a tropical system struck the archipelago was in 2018, when Tropical Storm Olivia made landfall over Maui. It was, per CTV News, the first time a storm had come ashore like that since records began in the 1950s. The last full-blown hurricane to strike the state was in 1992, when Category 4 Iniki landed on Kauai, the chain’s northernmost island, as the strongest storm on record to hit the state. But the Big Island hadn’t seen a major storm make landfall since 1900. So Tropical Storm Lala, by some measures a Category 1 hurricane, left a mark. Nearly 200,000 homes and businesses — representing roughly 70% of the Big Island — remained without electricity on Sunday night as winds of up to 75 miles per hour and floodwaters hammered the state’s infrastructure. “Customers should prepare for extended outages lasting weeks or even months in the hardest hit rural areas of Hawaii island,” Hawaiian Electric, the utility that serves 95% of the state, told the Honolulu Star-Advertiser.
“It doesn’t matter how many poles we fix in your neighborhood, they’re not going to be getting any power,” Jim Kelly, a spokesman for the utility, told Honolulu Civil Beat. “So we’ve got to focus on restoring those transmission lines first.”
Georgia has over the past decade emerged as a hotbed for cutting-edge industry in the United States. The state welcomed battery factories, solar manufacturers, and the nation’s only wholly new nuclear reactors in decades. But regulators are now cracking down on data centers. Last week, Georgia Power opted to delay the start date for a 25-year service contract to supply the ChatGPT maker OpenAI’s $20 billion data center near the state’s coast with electricity. The voluntary delay, E&E News reported, gives the utility 12 days to revise its proposal before the Public Service Commission, which had signaled its plans to reject the original pitch amid a groundswell of opposition to artificial intelligence infrastructure. The new deadline to review and approve the proposal is August 26.
The postponement comes about a week after West Virginia attempted to “clean slate” with a new set of proposals to regulate data centers aimed at undercutting the movement to block server projects across the country. Governor Patrick Morrisey, a Republican, issued a plan that calls for reducing and possibly eliminating state income taxes on the back of new revenue from AI companies. The move came after Mountain State Spotlight, a venerable investigative outlet based in West Virginia, published a report outlining how a data center developer was using the state’s patchwork of regulations to push a project with limited oversight. It’s no surprise. At least seven in 10 Americans oppose data centers being built near their homes now, according to the latest polling from Heatmap Pro.
Batteries are booming as lithium-ion units grow cheaper and more useful to back up the grid. The industry saw 70% annual growth last year, as my colleague Robinson Meyer wrote last week. But powering the grid off of batteries requires actually hooking them up to the power system. Across the country, some 750 gigawatts of energy storage projects — roughly equal to more than 700 nuclear reactors — are waiting in the queue for a grid connection, according to data the Lawrence Berkeley National Laboratory shared with Bloomberg. Not all the projects will be built. But the median wait time for a grid connection was five years in 2025, up from a year and a half in 2015.
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Last I checked, it’s actually illegal to write about the geothermal industry’s looming boom without making a pun about heat. So you’ll have to forgive the headline. But things really are getting steamy between investors and developers. When the Bureau of Land Management held a geothermal lease sale in New Mexico in June, the agency netted more than $16.5 million, making it the second-highest-grossing sale in its history, according to Utility Dive. The record-setting bid was from Rock Canyon Resources, which paid $3.14 million for one 4,479-acre tract. Another auction is set to take place in Utah on Tuesday.

The U.S. used to produce and enrich the uranium that fueled the world’s largest fleet of nuclear power stations. In the 1990s, however, then-President Bill Clinton brokered a deal to establish the famous “megatons to megawatts” with Russia, whereby American power plants promised to buy fuel made from disassembled Soviet warheads. As a nonproliferation exercise, it was a success. But the Russian fuel undercut the domestic market, putting many American miners and enrichers — already facing dimmer prospects as the U.S. stopped building new atomic power stations — out of business. By the time the 2022 invasion of Ukraine plunged Washington’s relations with Russia to their lowest point since the Cold War, the U.S. remained heavily dependent on imports from the Kremlin-owned nuclear company Rosatom. Congress banned Russian uranium imports in 2024, but allowed for waivers until the start of 2028. That cliff is fast approaching, right as one of the other largest suppliers — Kazakhstan — lowered production at its mines.
Luckily for the resurgent U.S. nuclear industry, Canada remains America’s largest supplier of uranium. And a lot of Canadian uranium is coming to the market. On Friday, NexGen Energy broke ground on the first phase of what’s expected to be one of the largest uranium mines on Earth. The project in northern Saskatchewan was first conceived more than a decade ago. The company had started drilling for samples in 2012, but failed after 13 attempts. In winter of 2014, the company tried again. “On the very first home, we hit mineralization,” NextGen CEO Leigh Curyer told CBC News. “We didn’t know it at the time, but we were on top of what has become the world’s most important energy fuel project.” Canada isn’t the only country planning for a nuclear future. Spain, the world’s last major country still pursuing a phaseout policy, seems to be inching toward saving its nuclear plants. Last week, regulators cleared the Almaraz nuclear station to operate through 2030. But NucNet cautioned that left-wing Prime Minister Pedro Sanchez’s government still planned to shut down the reactors by 2035.
Peter Thiel has invested in Facebook, SpaceX, and Palantir, where he serves as chairman of the board and co-founder. Add Argentina’s oil and gas sector to his portfolio. In a Friday filing to the U.S. Securities and Exchange Commission, the billionaire disclosed a 1% stake in Vista, one of Argentina’s largest oil companies operating in the Vaca Muerta shale formation roughly the size of Belgium, where Argentine President Javier Milei wants to ramp up fracking. Reuters reported that Thiel also recently bought a new home in Buenos Aires.
In Providence, at least, climate change is still on the ballot.
Here’s some trivia for you: What was the first state to see its average temperature break the 2-degree Celsius threshold for warming above pre-industrial levels? It wasn’t Alaska, the fastest-warming state, nor was it California or Florida, states with some of the most visible impacts of the extreme weather crisis. It was not Arizona or Texas, either, though “hot” and “warming” are often conflated.
The answer, in fact, is humble Rhode Island, which passed the international benchmark for accelerated climatic impacts back in 2019. It is perhaps less surprising, then, to learn that in the Ocean State’s largest city, Providence, climate change and how to adapt to it have become one of the central talking points in a heated mayoral race, which in the deep-blue city is likely to culminate in the September 9 primary.
There is plenty to worry voters. Providence sits at the head of Narragansett Bay, which has warmed 1.6 degrees Celsius, enough to drive lobsters from the region and convert the local lobstermen into crabbers, fishing for crustaceans they previously considered bycatch. The sea level has risen on Rhode Island’s 400-plus miles of coastline by more than 10 inches since 1930, more than in Venice or Miami, meaning the city floods frequently. Locals hold their breath every hurricane season; a hit from a category 4 or larger storm could tally billions in damages. And as home to the biggest port in the region, Providence is also an unfortunate case study in industrial and fossil-fuel-related pollution affecting historically redlined neighborhoods.
“Since I’ve been in office, we’ve had dramatic, chronic flooding. We’ve had high heat days in the fall that have closed public schools, which is not something that ever happens here in September,” Providence Mayor Brett Smiley told me. “We had some of the highest snowfall in recorded history [in the city]. We’re seeing the effects.”
Smiley, who was elected in 2022, has described investing in infrastructure upgrades for the nearly four-century-old city as one of his “principal responsibilities” as mayor. During his second year in office, he signed an ordinance requiring all of the 122 city-owned buildings to decarbonize by 2040, and that fall published a 10-year plan that introduced air quality, heat, and stormwater management goals, provisions aimed at curbing pollution at the Port of Providence, and would have effectively banned the construction of new gas stations. (A later amendment relaxed the restrictions.) He’s also invested in long-overdue repairs to the city’s hurricane barriers.
This year, Smiley also announced the creation of a Green Revolving Fund to support Providence’s ambitious carbon neutrality goals. “I’ve been in government long enough to know that operating budgets can change as priorities change, and so having a dedicated recurring revenue stream is vital to ensuring that this work continues,” he said.
In the face of federal headwinds, and at a time when the political currency of “climate change,” at least in so many words, is on the downswing, Smiley’s focus on climate issues stands out. That is especially true against the backdrop of a broader state-level reassessment of environmental goals, with Democratic Governor Dan McKee proposing a budget earlier this year that would have slashed climate programs funded by monthly utility charges in the name of affordability. Though Rhode Island lawmakers ultimately rejected that rollback, McKee’s move fits into a larger trend in the region of blue-state politicians in places like Maryland, Massachusetts, and New York curbing or weakening climate ambitions under the pressure of affordability politics. (McKee also faces his own competitive primary.)
“Providence alone can’t solve the climate crisis. But our actions, at least in Rhode Island, are pushing other communities in the state to take action,” Smiley said.
But there are others — including Smiley’s progressive challenger, State Representative David Morales — who say the mayor’s tenure has been a lot of talk and little action, and that he’s neglected Providence’s low-income and frontline communities.
Morales’ campaign did not get back to me for this article, despite requests through multiple channels. But Steve Ahlquist, an independent reporter who follows environmental justice-related issues in Rhode Island, also told me that “over the years, and also in dealing with Mayor Smiley as an incumbent, I’ve had some real difficulty with what I would even call basic honesty out of his administration.” He added that the mayor’s office has a history of downplaying and denying police harassment of unhoused people in particular, including lying about the presence of police officers at a homeless encampment and their involvement in an “illegal search” in 2023.
When I asked the Smiley administration about Ahlquist’s accusations, press secretary Carl Austin Miller Grondin told me the city has a “multi-department approach” for addressing encampments of which “Providence Police are one piece,” though he didn’t address the 2023 incident directly. As for the idea that Smiley represents the status quo, Grondin said the mayor has made “significant investments” in programs for underprivileged groups including affordable housing, eviction prevention, public schools and youth programming, and public safety.
Ahlquist also finds Smiley’s talk about affordability and clean energy false, however. Smiley notably vetoed a rent control ordinance, despite the city having some of the highest rates in the country, and while serving as former Governor Gina Raimondo’s chief of staff between 2016 and 2019, he helped push for the expansion of fossil fuel infrastructure in the form of a $1 billion fracked gas and diesel oil power plant that was ultimately thwarted by community pushback. (Grondin told me “rent control policies do not lower rents” and that the mayor “has instead taken a disciplined, results-driven approach to lowering housing costs.” The power plant project was proposed before Smiley’s tenure in Raimondo’s administration, he added.)
Morales, 27, is a Democratic Socialist and has won the backing of Vermont’s Independent Senator Bernie Sanders. His scrappy campaign against an establishment incumbent Democrat has earned him comparisons to New York City’s young, charismatic Mayor Zohran Mamdani. Unlike Mamdani, however, Morales has made climate central to his campaign.
Morales has gone after Smiley particularly hard on environmental justice issues, sensing a weak spot in his record. “Industrial facilities near the Port of Providence have polluted our neighborhoods for decades,” his issues page reads. “David will require them to contribute more toward the city services and infrastructure our communities deserve.”
A nearly two-mile stretch of Allens Avenue, which flanks the port, is home to asphalt plants, scrap metal recyclers, oil and gas companies, and petroleum storage tanks with a history of leaks, spills, dumps, and other forms of contamination. Locals complain that even just driving along the avenue is enough to make you sick, with 11 identified polluters within a mile radius of National Grid’s newest LNG plant. Traffic to and from the port adds to the odor — and health impacts — in the neighboring communities of South Providence and Washington Park, which have some of the highest hospitalization rates in southern New England. Notably, South Providence’s population is 90% people of color; Washington Park’s is above 60%.
Smiley bristled at Morales’ plan to tax polluters. “Many of my opponent’s proposals — which continue to evolve, by the way — are illegal or not allowed, and he leaves some of those details out, and sometimes changes his position,” he told me. Ahlquist, who issued a rare endorsement of Morales last spring, contends that “we know for a fact it is not illegal” to tax polluters at a different rate. (In truth, it’s a bit of a legal gray area; Providence’s tax code allows it to adopt a classification system with different rates for industrial properties, but whether that classification can be used to single out specific polluters on Allens Avenue is murkier.)
In an interview with Ahlquist, Morales has also proposed buying out the Rhode Island Recycled Metals property — where some of the worst contamination has originated — and pursuing “brownfield mediation” in the area. “I find it shameful that Public Street, one of the few shoreline access points around the Port of Providence, is not a very welcoming environment,” he said. On the adaptation side, he’s proposed passing a green energy bond to invest in renewable energy and upgrade the sewage system with an eye on future flooding.
A week ago, it might have seemed as though Morales had progressive momentum on his side. But after the upset of Democratic Socialist Francesca Hong in Wisconsin on Tuesday night and the narrow victory by progressive up-and-comer Abdul El-Sayed in Michigan the week before, the narrative is now more complicated. Meanwhile, the first primary poll shows Smiley with a 4-point edge — within the margin of error, but still likely to have the Morales campaign in a state of jitters.
Climate adaptation can sometimes fall under a variation of the refrain parodied in urban infrastructure circles: One more study would fix this. That’s especially true in Rhode Island, where study after study has highlighted the problems Morales and Smiley are circling, and yet here they still are, at the center of yet another mayoral race.
“One of the things that frustrates me is when you write a plan and then put it on the bookshelf, and that’s the end of it,” Smiley told me, sounding genuinely irked as we spoke on the phone. “That’s not how I do plans.” He told me stormwater infrastructure would be a major focus of his administration if he’s elected to another term, while he hopes his decarbonization roadmap and the green revolving fund will outlast his mayoralty, whenever and however it may end.
Morales has been stymied before, too. Ahlquist recalled watching the young legislator in the State House at the end of a legislative session, when, in the waning hours, he was told by leadership that a bill he’d been working on wasn’t going to get through. “David, when he’s in public, he’s very controlled, very managed,” Ahlquist said. But from his vantage point, Ahlquist could see Morales had started to cry.
“It’s midnight, the last days of session, and I just saw something raw in him then,” Ahlquist said. “It was like, Wow, this is a guy who really gives a shit.”
Editor’s note: This story has been updated to include responses from the Smiley campaign.
Chatting about win-win solutions with the Abundance Institute’s Ryan Norris.
This week’s conversation is with Ryan Norris, senior fellow for energy policy at the Abundance Institute. The libertarian-leaning institute — whose name cleverly shortens to AI — is a new-ish entity with increasing relevance in energy and tech spaces. As Norris and I discussed, it’s starting to help shape policy on data center development and the generation that’ll power it all, especially in Republican circles. Norris himself previously worked with Americans for Prosperity, a right-wing political organization. I reached out to him and asked if we could chat because I wanted to know more about the institute’s work within the energy space. He wound up saying a lot more than I expected. So let’s dive into it.
The following conversation was lightly edited and abridged for clarity.
So let’s start with what you’re working on. What’s on your desk these days?
Here at Abundance, we sit at the juncture of emerging technology and the energy they need to bring that new technology to bear to impact life positively. We are always in a constant state of learning and researching what the latest thoughts and feelings are around certain policies, particularly around AI and data centers, and then energy technology. How do they feel about nuclear? Geothermal? Solar and battery arrays?
A lot of what I’m working on is Project Gigawatt, a body of policy that fits into permitting, generation, the grid, transmission, and then market and demand. Policies that we believe will generate more, transmit more, and as much of a free market approach as possible. Knowing that a lot of states have regulated utilities, when the state utility can’t produce what the state can potentially actually generate or would need to in order to accommodate large loads, we think there needs to be other opportunities to either bring that power or purchase it in a different way.
When it comes to this policy set, how are you taking into account the intensifying backlash to data center and AI infrastructure, as well as the energy attached to it?
As everyone can sense, things are moving rapidly, and there is a natural inclination to question how fast we’re going. I think these concerns need to be addressed seriously and respectfully. You can’t just say negative things about people who care about water quality or impacts to their local economies. Those are valid. I’ve lived through those. I come from a rural place in Arkansas that had oil and gas plays. And I’ve seen there needs to be conversations with people living in those areas too.
We cannot discount the backlash. When you take the legitimate concerns and pair them with the opportunities coming, I think there’s actually a chance to set up win-win solutions. It shouldn’t be a win-lose scenario here. They have skepticism about AI in the short and long term — that’s a natural inclination and not a negative, per se. But educating people and policymakers about data centers, that’s important.
What is your approach to the rise in land use regulation around data centers and energy infrastructure, moratoria and restrictive ordinances?
As much as possible, you want the infrastructure and cost allocation to be borne by the business causing it. That’s the motivation behind a lot of colocation partnerships happening right now, like the Kilby project in Texas, with natural gas powering a Microsoft hyperscale.
To us, it’s about setting up the opportunity for private property owners to sell to those hyperscalers and those generating the energy. Setting up situations where you’re not stopping people from benefiting. A lot of the “bring your own power” concept, we really like that. Maybe having it where power purchase agreements are more in the mix, things along those lines. That’s where I see things.
The energy increases to our utility bills, people are concerned about it, and that’s a bread and butter issue. That’s the approach: We know we need grid upgrades and want to have the most cost effective versions of those as possible, but you want those needing the power paying for it and not putting it on the backs of residents.
I’m curious, what’s you and your organization’s approach to the rise of gas infrastructure built for AI and the potential impacts that could have on climate change?
I don’t discount the issue of climate change.
Let’s say we’re not able to decarbonize enough to reverse the effects of warmth. We know we’ll have to create energy. We know we have other options for energy that need to be in the mix — more nuclear, which now even some of those who are climate-minded understand is an abundant energy source. I’m also interested in new technologies in geothermal where it can be viable in more places than we thought. You can drill down and tap hot rocks, a basin of water, turn a turbine, and that’s more acceptable for those who care about the climate. And states are looking at it, including my state of Arkansas. I bring these up because I also care about sources that provide firm, consistently available power.
We attended the American Legislative Exchange Council, and one of the things we do, we’re voting members on the energy, environment, and agriculture task force. We’re pro letting the market decide what they need. So we took opposite stances from what people typically consider normal standards on the center-right about banning “net-zero” for local governments. It did pass as model legislation but if we believe “all of the above” is the approach, we also want to be principally correct to ourselves that it doesn’t mean banning wind or solar where it’s viable.
My last question: What’s your thought on the future of politics around AI infrastructure and energy generation for it?
There’s definitely headwinds to those in that industry. I think the sense is, they understood what they wanted and didn’t see any barriers to the way they’d go about it. That’s causing ripple effects in our politics at the local level, including here in Arkansas, where I live in Pulaski County. I think it’ll stay important particularly as it connects to affordability concerns around energy. We know we need more energy, but we want it at the lowest cost possible to the residential side. If people are feeling like data centers are driving the demand for the energy and aren’t on the hook for it, that’s going to position them to be more negative towards the technology.
But we have to expand the conversation. There are folks out there talking about 3D printing for homes, using proprietary cement mixes to build homes in a few weeks when they took months. Agriculture is using robotics in lieu of pesticides and herbicides. Advanced manufacturing is improving the quality of medical equipment. No one completely understands the end goal of new energy to fuel the data centers and AI to get us where there’s a net benefit to them.