June 4, 2025
California’s SURGE (Solar-Utilities Reporting, Guidance, and Education) Act is reshaping how prevailing wage rules apply to distributed energy projects in the state.
The SURGE Act refers to prevailing wage provisions established by Assembly Bill 2143 (AB2143). AB2143 created Public Utilities Code §769.2, which took effect on January 1, 2024, to require prevailing wages on large customer-sited renewable generation installations (and associated battery storage) that participate in net metering or net billing programs. The prevailing wages must be paid (at a minimum) to all construction workers and apprentices involved in relevant projects.
Net metering is a process where customers with on-site energy generation, like solar panels, send excess electricity back to the grid in exchange for credits that reduce their utility bills.
Electrical generation facilities which receive any of the following applicable net metering tariffs listed below will be subject to AB 2143. The following tariffs are listed by utility:
• PG&E: NEM, NEM2, NBT, NEMVMASH, NEM2VMSH, NEMV, NEM2V, NEM2VSOM
• SCE: NEM, NEM-ST, NBT, MASH-VNM, MASH-VNM-ST, NEM-V, NEM-V-ST,SOMAH-VNM
• SDG&E: NEM, NEM-ST, NBT, VNM-A, VNM-A-ST, NEM-V, NEM-V-ST, SOMAHVNM
There are several exceptions to the prevailing wage requirements:
(1) Residential facilities with a maximum generating capacity of 15 kW or less, or any facility that is installed on a single-family home.
(2) Any projects that are already a "public work" under existing law.
(3) Facilities that serve a modular home, modular home community, or multiunit housing that has 2 or fewer stories.
According to the California Public Utilities Commission (CPUC) website, contractors for eligible projects are required to adhere to the following compliance guidelines:
(1) Pay, at the minimum, the appropriate prevailing wage to all construction workers and apprentices involved in the project.
(2) Maintain certified payroll records and submit digital copies for all workers to CPUC twice annually (on July 1st and December 31st of each year).
If "willful wage violation" is enforced against a contractor for a failing to comply with the guidelines listed above, then the relevant electrical generation facility will lose service to all net metering tariffs.
