SB 698 amends the California Public Resources Code to let the California Energy Commission (CEC) create and maintain distributed energy resource (DER) equipment lists and rating standards for hardware that supports the state’s energy and environmental objectives. The bill expands the California Solar Initiative chapter heading, updates statutory findings and definitions (including minimum and maximum solar system sizes), and requires the CEC to adopt guidelines for these lists at publicly noticed meetings.
This matters because a state-level, standards-driven listing process can speed deployment and simplify incentive administration for solar, storage, and EV-related equipment — but it also concentrates technical evaluation at the CEC, creates new compliance obligations for manufacturers and installers, and removes certain procedural rulemaking requirements that usually apply to state agencies.
At a Glance
What It Does
Authorizes the CEC to establish published equipment lists with rating standards for solar energy systems, energy storage, bidirectional charging systems, and electric vehicle service equipment, and directs the commission to adopt procedural guidelines for those lists at publicly noticed meetings.
Who It Affects
Manufacturers of solar inverters, batteries, EV charging and bidirectional (V2G/V2H) equipment; solar and storage installers seeking ratepayer-funded incentives; testing labs and certification bodies; and the CEC itself as the new gatekeeper for listed equipment.
Why It Matters
A formal state listing with technical ratings can standardize what qualifies for incentives and interconnection, lowering transaction costs and reducing uncertainty — but it also creates a single point of technical control that can shape which products succeed in California’s large clean‑energy market.
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What This Bill Actually Does
SB 698 adds authority for the California Energy Commission to create and publish distributed energy resource equipment lists and to attach rating standards to equipment, components, and systems that further California’s energy and environmental goals. The bill expands the existing California Solar Initiative chapter to explicitly cover lists for solar energy systems, energy storage systems, bidirectional charging systems, and electric vehicle service equipment.
It also updates the chapter’s findings to describe the state’s solar deployment goals.
The bill clarifies or supplies statutory definitions relevant to listing and eligibility: it defines a bidirectional charging system (allowing discharge from a vehicle to a building or the distribution grid), restates definitions for electric vehicle service equipment and distributed storage by cross-reference, and codifies basic technical units and minimum/maximum sizes for solar energy systems (at least 1 kW, not more than 5 MW AC). Those definitions will set the scope of what the CEC can list and rate.On process, SB 698 requires the CEC to adopt guidelines for both solar incentives and the new equipment lists at publicly noticed meetings and specifies minimum public-notice periods for initial adoption and for substantive changes.
The bill also makes those guidelines exempt from the state’s Chapter 3.5 rulemaking procedures, which limits the usual Administrative Procedure Act-style requirements. Finally, the bill clarifies that establishing these lists does not change other statutory obligations already imposed elsewhere in the chapter.
The Five Things You Need to Know
The bill defines a ‘solar energy system’ as producing at least 1 kW and not more than 5 MW of AC-rated peak electricity, tying eligibility and listing scope to those thresholds.
CEC must give at least 30 days’ public notice before initially adopting guidelines and at least 10 days’ written notice before adopting substantive changes.
Guidelines adopted under this chapter are exempted from Chapter 3.5 of the Government Code (the usual state administrative rulemaking procedures).
SB 698 explicitly adds ‘bidirectional charging systems’ and ‘electric vehicle service equipment’ (including bidirectional EVSE) as categories eligible for equipment lists and rating standards.
The legislation places the DER equipment lists and rating standards within the California Solar Initiative chapter and restates the state’s solar deployment goals, including a 3,000 MW target and objectives to mainstream solar over 10–13 years.
Section-by-Section Breakdown
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Chapter heading expanded to include equipment lists
The bill amends the chapter heading to read 'California Solar Initiative and Equipment Lists.' This is a structural change that signals the legislature’s intent to treat equipment listing as a central part of solar and DER policy rather than an ancillary program detail. For practitioners, the heading change foreshadows that subsequent chapter provisions will be interpreted with equipment qualification and standards in mind.
Findings and policy goals updated
SB 698 adds a finding that creating and maintaining DER equipment lists is economically and environmentally beneficial. The section also repeats established deployment targets (3,000 MW goal, mainstreaming solar within 10 years, 50% of new homes in 13 years). Those findings are not prescriptive but matter because they frame statutory purpose and will guide how aggressively the CEC interprets its new listing authority.
Definitions and scope for listed equipment
The bill revises and adds definitions: it defines 'bidirectional charging system' to include discharge to buildings or the distribution grid, restates electric vehicle service equipment definitions by cross-reference to the Health and Safety Code, defines 'energy storage system,' and codifies common units (kW, kWh, MW). It also specifies the size range for 'solar energy system' (1 kW—5 MW AC). These definitions delimit what the commission can list and help set technical test parameters and performance baselines for rating standards.
Guideline adoption process and notice requirements
The CEC must adopt guidelines for solar incentives and for the DER equipment lists at a publicly noticed meeting with an opportunity for comment. The bill sets a minimum 30-day notice for initial guideline adoption and a 10-day notice for substantive changes. Practically, this creates a predictable procedural floor for stakeholder engagement while preserving flexibility for the commission to manage meeting schedules and comment processes.
New authority to create DER equipment lists with rating standards
This new section authorizes the CEC to establish equipment lists and rating standards for 'equipment, components, and systems' that further state goals, explicitly naming solar systems, distributed energy storage systems, and electric vehicle service equipment (including bidirectional EVSE). The provision also clarifies that it does not supplant other statutory requirements in the chapter, leaving open interactions with existing eligibility rules and PUC-administered incentive mechanisms.
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Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Manufacturers of listed equipment — getting onto a state-maintained list can reduce market friction, simplify qualification for incentives, and provide a competitive advantage in California’s large marketplace.
- Installers and integrators — using pre‑qualified, rated equipment shortens paperwork and can speed approvals for incentive programs and interconnection.
- Homeowners and commercial customers seeking incentives — clearer, rated equipment lists reduce uncertainty about which products qualify and can increase confidence in performance and warranty expectations.
- Testing labs and certification bodies — demand for standardized testing and rating services will increase as manufacturers seek listing and compliance evidence.
- Grid operators and utilities — standardized equipment ratings can improve predictability for interconnection, grid planning, and DER integration (assuming ratings are rigorous and aligned with grid needs).
Who Bears the Cost
- California Energy Commission — the agency inherits a technical and administrative workload to develop, evaluate, maintain, and update equipment lists and rating standards, likely requiring funding, technical staff, or contracted expertise.
- Manufacturers (especially smaller firms) — must fund testing, certification, and administrative processes to gain and retain listing status, which could raise barriers to market entry.
- Installers and developers — may face constraints if incentives or interconnection processes require listed equipment, forcing substitutions or redesigns and increasing procurement complexity during transition periods.
- Testing laboratories and certification programs — while they benefit from increased demand, they also must scale services and may face backlogs or need to invest in new test capabilities to meet CEC standards.
- Local publicly owned utilities and the PUC — potential coordination costs and duplicated technical reviews if the CEC’s lists do not align with utility or Commission interconnection and qualification rules.
Key Issues
The Core Tension
The bill balances the desire for standardized, reliable equipment to protect the grid and consumers against the need to keep California’s market open and adaptable to innovation: tighter, state-run equipment lists reduce uncertainty and administrative friction but risk raising compliance costs, locking in current technologies, and concentrating decision‑making in an agency that must be resourced and governed to manage rapid technological change.
SB 698 centralizes technical gatekeeping at the California Energy Commission by authorizing state-managed equipment lists and rating standards. That centralization improves consistency — a single, transparent list can speed incentives and interconnection — but it also risks creating chokepoints for market access if the listing process is slow, under-resourced, or designed without sufficient attention to interoperability and innovation cycles.
The bill sets minimum public‑notice windows for guideline adoption but exempts those guidelines from Chapter 3.5 of the Government Code; in practice, that narrows procedural protections and could reduce formal opportunities for iterative rulemaking that stakeholders have relied on in the past.
The statutory definitions and cross-references are functional but uneven in the draft: several definitions point to other code sections rather than establishing testing protocols, and the text contains overlapping, duplicated phrases that could create drafting ambiguities (for example, repeated fragments describing electric vehicle service equipment). The bill does not prescribe how rating standards will be developed, who accredits test labs, how often lists will be updated, or how the CEC will coordinate with the Public Utilities Commission, local publicly owned utilities, and federal standards.
Those omissions matter operationally: without clear processes for testing, reciprocity, and updates, a listing regime can unintentionally favor incumbents and slow new technologies.
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