California Homeowners Risk Losing Out on the Benefits of Net Metering
Net energy metering (NEM) is a system which compensates homeowners who own or lease rooftop and ground-mounted solar arrays and other renewable energy generation sources at full retail price. Since 1996 net energy metering has been a mainstay of the California solar market. It is the means through which solar customer’s energy meter’s “spin backward,” giving them credit for their surplus power being fed into the grid. Currently, NEM customers receive the full retail price for the power they contribute to the grid, despite it being cheaper for utility companies to produce that energy themselves. However, this is about to change.
What the Net Metering Transition Means for You
The current net energy metering (NEM) rules will run out soon, either on July 1, 2017, or when your utility company reaches the NEM cap (net-metered solar reaching 5% of a utilities total customer peak demand) from the influx of new solar installations. By the end of 2015 the California Public Utilities Commission will review net metering and determine if and how it should be changed.
It is expected that current net metering rules will be changed. Although a decision for NEM 2.0 has not been reached yet, it will likely mean that solar customers will no longer receive full retail price for the surplus power they generate, or may be charged for their use of the grid. Essentially, solar customer’s power bills may go up with the net metering transition.
Current solar customers participating in a net energy metering program will be ‘grandfathered,’ and be eligible under their original applicable NEM program for 20 years from the original interconnection approval date ("Permission to Operate Letter") until the date of your annual true-up bill (or 12th month bill) in the 21st year of participation. For example, if a customer had a NEM interconnection date in July of 2010, they would be eligible to stay on their current NEM program through their annual true up in July of 2030. Current solar customers will also have the ability to transfer the renewable generator to a new owner, operator, or PG&E account at the original location.
How to Save Money with Solar During the Net Metering Transition
If you are not currently a solar customer and are considering going solar, now is the time to invest! In order to be grandfathered in under the current net energy metering (NEM) rules during the net metering transition, your system must be placed in service before either July 1st, 2017, or when the NEM cap is reached, whichever happens sooner. Check with your utility company to find out how close they are to reaching the NEM cap.
With the price of going solar at an all-time low, the upcoming expiration of the Federal Solar Investment Tax Credit, and the looming NEM cap, there has never been a better time to go solar, saving you money and helping the environment.
For full details on the net energy metering transition, review the NEM tariff.
Contact Valley Solar, your local solar experts, to make an informed decision about gaining your independence from utility companies.