As new changes take place in the solar industry this summer, it’s important for you to know about Net Metering and the impact it will have on your solar installation.
What is Net Metering?
Net metering is an agreement between solar customers and their utility company, where the utility agrees to buy the electricity produced by their solar system as long as the system is less than 1,000 kilowatts. Sometimes your panels produce more electricity than you need at the moment. This causes your meter to run backward, earning you bill credits for the excess electricity, which roll over month to month. At night or on cloudy days, you can use those credits to redeem your power. With the current net metering system, for every kilowatt-hour of electricity you feed to the grid, you get an equal kilowatt-hour of credit. This is why it pays to have solar!
Why the Change?
Due to new California policies, the current net metering program will expire this summer. Utility companies (PG&E, SCE, & SDG&E) were allowed to set a market cap of 5% of the peak total demand for the current program before adopting Net Metering 2.0. As of now, Edison is the only utility left to reach its peak. Since July 1st is the official NEM 1.0 expiration date, all SCE users will be enrolled in NEM 2.0 on this day unless the utility reaches its cap sooner. With the deadline only a few months away, it’s important that potential solar customers understand Net Metering 2.0.
Net Metering 2.0 has four important changes you should be aware of:
- All solar customers are automatically placed under the Time of Use Rate Structure. This means the price of electricity is based on the time of day and season, rather than general consumption. For example, electricity is more expensive on a hot summer afternoon (peak hours) than on a late winter evening (off-peak hours). The value of your credits varies under TOU, and depending on the utility company, the rates may or may not be favorable to solar customers.
- Solar customers are subject to non bypassable-charges. This means you’re charged a fee for every kilowatt-hour you withdraw from the grid. It’s the same as small charge for ATM withdrawal.
- A one-time interconnection fee to connect your solar panels to the grid. The cost of the fee depends on the utility company.
- As an existing client seeking to expand your system, if you increase your system by 10% after July 1st, you will automatically be switched to NEM 2.0.
How Does This Apply to Me?
As you can see, the current net metering program offers several financial
benefits. Even though NEM 2.0 still supports solar customers, Edison users
can be grandfathered into NEM 1.0 for the next 20 years and secure all
the savings of the current program! To do so, you must submit all documentation
for Permission to Operate (PTO) by June 30th. Whether you’re a new
or existing solar customer, the time to
go solar is now!
We don’t want you to miss out on the perks of NEM 1.0. To take advantage of NEM 1.0 and get started on your solar installation, fill out our online contact form or visit one of our Solar Design Centers today!