NEM 2.0 – How It Will Affect the Amount of Savings You Receive With any Solar Installation

Net Energy Metering (NEM) rules will change for PG&E, SCE, and other major utility customers in California

How does NEM 1.0 work?

Net energy metering allows customers to receive credits for energy from their solar system that is fed back to the grid. Currently NEM 1.0 allows customers to receive full credit value for this energy.

How will NEM 2.0 work?

Solar customers connected to the grid under NEM 2.0 will be required to purchase their energy as a time-of-use rate and will now be responsible for supporting more of the overhead costs of the utility in the form of fees.

Interconnection Fee – this is a one-time fee to covers the costs associated with processing a solar application and continued study on the impacts of solar to the grid.

Public Purpose Charges – these are charges that previously did not apply to solar customers as a way to incentivize going solar. The fees go to cover low- income bill assistance, efficiency rebates, research, and nuclear decommissioning.

The NEM 2.0 changes will affect the savings you see  from solar by 5-10%

What is the good news?

The California Public Utilities Commission (CUPC) has continued to support customer generated solar installation with their ruling on NEM 2.0
Utility companies will still be required to give customers full retail credit for the net metering from their system. The CPUC also denied several fees proposed by the utilities and has upheld a 20 year grandfathering for those connected under NEM 1.0.

When is the NEM change scheduled to occur?

Utility companies will continue NEM 1.0 until the total amount of their net capacity from solar reaches 5% of peak demand. While the exact date and details of the transition from NEM 1.0 to NEM 2.0 are unknown, the switch is projected to take place in the summer of 2016.

What is the current capacity available?

Due to the fluidity of the situation determining the available capacity is challenging. Many large scale projects have applied under NEM 1.0 and when those projects are completed will account for approximately 350 megawatts of solar. This is a large portion of PG&E’s cap remainder. The CPUC and utilities agree that delaying a decision about solar will most likely excluded you from NEM 1.0.