What is Net Metering?

Looking for the ultimate solar incentive? Well, look no further! A solar net metering program like the one in California helps a homeowner recoup the initial cost of their solar panels over the life of the system. Most states have energy exchange programs, but there are a few slight differences in eligibility and overall value to the solar homeowner.

In your home, you have a variety of devices and systems that require electricity (AKA “Loads”). To satisfy this electrical demand, your home draws energy from the local grid that has been supplied by a utility like Pacific Gas & Electric. Once you add solar panels to your home, you’re producing a portion of your electricity on-site. Any excess energy your system generates is then fed back into the electrical grid and you receive a credit.

So for a California utility like PG&E, you would receive a credit equal to the retail value of your electricity though this is not the case for every net metering program in the U.S.

What is Net Metering?

Looking for the ultimate solar incentive? Well, look no further! A solar net metering program like the one in California helps a homeowner recoup the initial cost of their solar panels over the life of the system. Most states have energy exchange programs, but there are a few slight differences in eligibility and overall value to the solar homeowner.

In your home, you have a variety of devices and systems that require electricity (AKA “Loads”). To satisfy this electrical demand, your home draws energy from the local grid that has been supplied by a utility like Pacific Gas & Electric. Once you add solar panels to your home, you’re producing a portion of your electricity on-site. Any excess energy your system generates is then fed back into the electrical grid and you receive a credit.

So for a California utility like PG&E, you would receive a credit equal to the retail value of your electricity though this is not the case for every net metering program in the U.S.

What is Net Metering?

Looking for the ultimate solar incentive? Well, look no further! A solar net metering program like the one in California helps a homeowner recoup the initial cost of their solar panels over the life of the system. Most states have energy exchange programs, but there are a few slight differences in eligibility and overall value to the solar homeowner.

In your home, you have a variety of devices and systems that require electricity (AKA “Loads”). To satisfy this electrical demand, your home draws energy from the local grid that has been supplied by a utility like Pacific Gas & Electric. Once you add solar panels to your home, you’re producing a portion of your electricity on-site. Any excess energy your system generates is then fed back into the electrical grid and you receive a credit.

So for a California utility like PG&E, you would receive a credit equal to the retail value of your electricity though this is not the case for every net metering program in the U.S.

Solar Net Metering in California

Net Metering Example

Let’s say you’ve bought a solar power system that produces an average of 1,200 kilowatt-hours (kWh) of energy per month. If you only consume 1,000 kWh a month (which is fairly common), then you’d supply 200 kWh to your utility. If you’re with PG&E, for example, they are required to compensate you for this excess energy, so you would receive a credit for 200 kWh to use when your demand is greater than your system’s production (like on a rainy day or at night).

Excess credits also roll over to subsequent months to offset future charges. So, for example, if you have a net credit for the month of April for 200 kWh you could use that in May when your energy usage might be higher.

Click Here for PG&E’s Video example of their net metering program

Net Metering Example

Let’s say you’ve bought a solar power system that produces an average of 1,200 kilowatt-hours (kWh) of energy per month. If you only consume 1,000 kWh a month (which is fairly common), then you’d supply 200 kWh to your utility. If you’re with PG&E, for example, they are required to compensate you for this excess energy, so you would receive a credit for 200 kWh to use when your demand is greater than your system’s production (like on a rainy day or at night).

Excess credits also roll over to subsequent months to offset future charges. So, for example, if you have a net credit for the month of April for 200 kWh you could use that in May when your energy usage might be higher.

Click Here for PG&E’s Video example of their net metering program

Net Metering Example

Let’s say you’ve bought a solar power system that produces an average of 1,200 kilowatt-hours (kWh) of energy per month. If you only consume 1,000 kWh a month (which is fairly common), then you’d supply 200 kWh to your utility. If you’re with PG&E, for example, they are required to compensate you for this excess energy, so you would receive a credit for 200 kWh to use when your demand is greater than your system’s production (like on a rainy day or at night).

Excess credits also roll over to subsequent months to offset future charges. So, for example, if you have a net credit for the month of April for 200 kWh you could use that in May when your energy usage might be higher.

Click Here for PG&E’s Video example of their net metering program

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How California’s Net Metering Program is Changing

Early in 2016, the California Public Utilities Commission (CPUC) voted to modify the current Net Energy Metering (NEM) program. This successor tariff is known as NEM 2.0. While the two programs are virtually the same (thanks in part to the tireless lobbying of solar industry advocates), there are a few significant changes that will affect homeowners enrolled in NEM 2.0.

How California’s Net Metering Program is Changing

Early in 2016, the California Public Utilities Commission (CPUC) voted to modify the current Net Energy Metering (NEM) program. This successor tariff is known as NEM 2.0. While the two programs are virtually the same (thanks in part to the tireless lobbying of solar industry advocates), there are a few significant changes that will affect homeowners enrolled in NEM 2.0.

How California’s Net Metering Program is Changing

Early in 2016, the California Public Utilities Commission (CPUC) voted to modify the current Net Energy Metering (NEM) program. This successor tariff is known as NEM 2.0. While the two programs are virtually the same (thanks in part to the tireless lobbying of solar industry advocates), there are a few significant changes that will affect homeowners enrolled in NEM 2.0.

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NEM Exchange Rate Preserved

In a huge victory for the solar industry, the CPUC voted to preserve the existing exchange rate for excess energy production. The utilities had fought to reduce customer compensation. Fortunately, NEM 2.0 customer’s will receive credit for the full value of their electricity.

Grandfathering Provision

From the date of system interconnection, NEM customers will be grandfathered in for their current program for 20 years. This holds true for NEM 2.0 customers. This is particularly important because the CPUC is set to take another look at California’s net metering program as early as 2018 and make changes accordingly.

Non-Bypassable Charges

Unfortunately, customers in the NEM 2.0 program will be required to pay non-bypassable charges for all energy they consume. These charges go to funding low-income and energy efficiency programs in the state. Historically NEM customers have only had to pay non-bypassable charges if they consumed more electricity from the grid than they consumed over a period of 12 months.

Specific non-bypassable charges include:

  • Department of Water Resources Bond Charges
  • Competition Transition Charge
  • Nuclear Decommissioning Charge
  • Public Purpose Program Charge

In total, these charges are expected to reduce the value of exported solar energy by the equivalent of roughly 2-3 cents per kilowatt-hour.

Time-of-Use Rates

Residential customers enrolled in NEM 2.0 will be required to use time-of-use (TOU) rates.

One-time Interconnection Fee

This new  fee—meant to cover the cost for the utility to ensure a system’s safe connection to the grid— is estimated to be between $75 and $150

 

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