New Rules for Solar Net Metering Coming to California This Year

Net Energy Metering in California stayed largely intact
 under new proposed rules at the CPUC

We planned for the worst and hoped (and lobbied) for the best for the new Net Energy Metering (NEM) rules coming down the pike this year in the major utilities in California. It seems like the hoping and lobbying paid off. New net metering rules currently in their comment period before the California Public Utilities Commission will slightly change the calculus for how solar power is credited on the grid for the homeowner who generates it. It appears the systematic dismantling of the net metering program advocated by PG&E and the other major utilities will not come to pass as it has in Nevada, Arizona and Hawaii. 

NEM 2.0 will come into effect in California sometime this year (in the March to September timeframe most likely). Current solar customers, and those who get signed up and installed before then, will be grandfathered on NEM 1.0* for 20 years from their interconnect date. NEM 2.0 includes additional application fees to connect to the grid, a new monthly fee to subsidize low income utility customers akin to what non-solar customers pay today, and a new time of use rate schedule. The most onerous components of PG&E proposal did not make the draft rule, however, and this represents a major win for solar customers and the solar industry. This includes feed-in tariffs (partial credit for Kwhs fed to the grid instead of full credit), peak demand charges and high monthly minimum charges. NEM 1.0 is still a better deal so if you’ve been sitting on the fence now is still the time to move, but we are all breathing a sigh of relief because the solar industry looks to stay strong well into the future.

http://calseia.org/press-releases/2015/12/15/brown-administrations-puc-proposes-to-reject-anti-solar-proposals-from-utilities

* Residential Net Energy Metering (NEM) is the way solar electricity production is credited to the homeowner when it feeds back to the grid. NEM 1.0 is the current program. Solar produced by the system goes to the home first. Excess electricity produced beyond what the home can use at any given point in time feeds back to the grid and the utility sells it to the neighborhood. The utility credits the homeowner's account for every kilowatt hour (Kwh) that feeds back to the grid. At night and at times when the solar system is not producing enough to cover the home's needs, such as dead of winter, the home gets electricity from the utility as always. The key to net metering is the home uses all the credits in the account before it buys any from the utility. The Kwh credits roll over day to day and month to month for one year. At the end of the year is an annual accounting, called the True Up, when the homeowner either pays for Kwhs purchased beyond what solar produced, or receives a credit from the utility (wholesale rate -- not retail) for surplus Kwhs remaining in the account. The True up clock starts ticking on the day the system receives permission to operate (PTO) from the utility, so customers always get a full year of sunlight to work with, and the customer receives a monthly statement that shows the running total net Kwhs either produced or consumed so they know where they stand as the year progresses. There is a monthly minimum fee capped at $10, and customers still buy natural gas (if applicable) as they do today.