Many Californians got a welcome surprise on their electric bills in October. Twice a year, eligible California households receive what’s called the California Climate Credit on their electric bill. The credit gives folks a little extra cash right in time for the holiday season, thanks to a little something called AB 32.

Here’s what happened: in 2006, California signed the Global Warming Solutions Act, also known as AB 32, into law. AB 32 requires the state to reduce its greenhouse gas emissions to 1990 levels by 2020.

The state uses a cap-and-trade mechanism to enforce the law. Environmental Defense Fund offers this helpful explainer on cap-and-trade:

“The ‘cap’ sets a limit on emissions, which is lowered over time to reduce the amount of pollutants released into the atmosphere.

The ‘trade’ creates a market for carbon allowances, helping companies innovate in order to meet, or come in under, their allocated limit. The less they emit, the less they pay, so it is in their economic incentive to pollute less.”

The state takes the money it makes from auctioning these allowances to polluters and uses some of it to fight climate change at the state level.

The rest of the money becomes – you guessed it! – the California Climate Credit, and goes right back into the pockets of eligible Californians.

Are you eligible to receive the California Climate Credit?

Who’s eligible to receive the credit? Any California residential customer who uses electricity from an investor-owned utility company such as Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE), electric service provider or community choice aggregation provider.

Small business owners (commercial, industrial or agricultural customers), schools and nonprofits that typically use less than 20 kilowatts of max power each month also qualify for the credit. These small businesses receive the credit monthly. Read more about eligibility here.

If you receive the credit, California is hoping you’ll pay it forward by investing it in upgrades that help fight climate change – ranging from LED light bulbs to solar panels. That way, you can gain more control over your energy costs, reduce your own carbon footprint and help meet state energy goals at the same time.

You know what else will earn you credits on your electric bill? Hint: it rhymes with “molar zenergy.” Learn more about how solar helps you take control of your electric bills here.

Here’s to electric bills that make you smile.

P.S. If you’re an eligible California household and didn’t see a credit this month, don’t fret! Some households receive this credit in November rather than October, so stay tuned. And get excited, as another credit will be coming in your April 2017 bill!

Posted by Leslye Penticoff

Leslye is the Content and Community Manager for Sungevity. She's also an avid coffee drinker and rock climber, and serves on the Board of Directors at Margination, a nonprofit in Troy, NY.