June 23, 2016
As you consider installing or adding on to your solar system, we want to keep you up to date on the latest developments on Net Energy Metering (NEM) and NEM 2.0. The state first set up NEM to help customers save money with solar back in the early 2000's. The program established a cap on the total amount of solar that could be installed with each utility under the NEM system.
PG&E is projected to reach its cap in Fall 2016. SCE solar growth has been slower, so they aren’t likely to hit the cap until Summer 2017. Once the utilities hit their caps, any solar array that goes into operation will have slightly different provisions under a new program called NEM 2.0.
NEM 2.0 is not very different from the original NEM and maintains the key provisions that make solar work for Ag:
- You can still aggregate the load of multiple meters behind one solar array (called NEM Aggregation, or NEMA)
- The reconciliation process for billing (called a true-up) is still on an annual basis, so solar can still offset your costs even if you have seasonal operations
- The new tariff still pays back solar generation at the full retail rate of electricity instead of a lower wholesale or generation rate
- You maintain 20 year certainty (‘grandfathering’) under the NEM 2.0 program, just as under the original NEM
There are also some changes under NEM 2.0 – some good and some not-so-good:
- GOOD: There is no longer a system size cap of 1 MW, so if your load is large enough for a bigger system then that will be allowed. Systems that are larger than 1 MW may incur additional fees, however, so it may still make sense to cap your system at 1 MW. CalCom Solar can help you evaluate the options and make the best decision.
- NOT-SO-GOOD: The utilities will be adding some new charges to NEM 2.0 customers. The charges are called nonbypassable charges (NBCs), and they cover things like energy efficiency and nuclear decommissioning costs. The new fees amount to about ~$0.02 / kWh and apply to all net load pulled through the meter. The more load your solar system offsets on the meter it’s connected to, the less this will impact you.
- NOT-SO-GOOD: There are also some new fees for application and interconnection, but they’re pretty manageable (only $200-300 per solar system).
- GOOD: We can help optimize your installation to minimize interconnection and NBC costs, while also ensuring the system is ideally located for your operations.
As you sort through the NEM 2.0 changes, feel free to reach out to us with any questions. CalCom will help you navigate the new program to ensure that you get the best payback for your solar system.
One final note: We’ve heard some misinformation recently about what’s needed to secure NEM versus NEM 2.0. Some companies are promising to secure NEM 1 before a solar system is even built, which is incorrect. We can help you walk through the requirements and timelines. Or click here to review PG&E’s web page about them.