If you are reading this article, chances are you’re considering solar for your home and are trying to understand how changes to net metering will impact your solar savings. While Net Metering 2.0 is different than Net Metering 1.0, installing solar panels still makes financial sense given California's hot summer weather and ample sunlight.
What is net metering?
Net metering is a system that allows solar customers (as well as users of other renewable energy systems like wind turbines, etc) to receive credits on their electric bill for any excess electricity their solar systems produce. These energy credits can be applied to offset electricity purchased from SCE at night or on cloudy/rainy days. Excess summer production can be applied to winter consumption when the solar panels will be less efficient due to the shorter days. This arrangement is what makes solar panels economically feasible for high desert homeowners without the use of expensive energy storage systems such as batteries.
How is net metering 2.0 different from net metering 1.0 for SCE customers?
Net Metering 1.0 was straightforward. For every excess kilowatt hour your solar panels produced, you received a kWh credit on your electric bill. It was a straight 1-for-1 exchange. The good news is that Net Metering 2.0 keeps solar economical by preserving credits at the retail rate. The primary difference here is that under the old plan, you got a kWh for each extra you fed back to the grid while under the new plan, you are credited at the retail rate at the time you generated the credit (more on this later).
In addition to what is referenced above, Southern California Edison net metering 2.0 includes three other revisions:
- Interconnection Fees – new solar systems must now pay a one-time fee to the utility to connect to the grid.
- Southern California Edison (SCE) – $75
- Pacific Gas & Electric (PG&E) - $145
- Non-bypassable Charges – Known as NBCs for short, these are per kWh fees that are built into retail electricity rates. While not a big dollar amount ($0.02 - $0.03/kWh), they fund programs that encourage energy efficiency, subsidized rates for low rate payers (such as D-CARE), among other things. For Lancaster Palmdale AV solar customers, NBCs will be applied to all kWh’s purchased from the utility.
- Time of Use (TOU) – Just like the name implies, electricity is billed at different rates depending upon the time it’s consumed. Electricity is most expensive in the late afternoon and early evening during peak summertime hours when air conditioners are blasting. It is least expensive at night, on weekends, and during the winter when overall electricity consumption is lower. Customers with west and south facing roofs (which produce the most solar electricity during peak times) will see the greatest benefit under time of use rate plans along with those who shift their electricity use off hours to maximize credits captured during peak demand times.
If my home solar system is currently under NEM 1.0, will I be forced to go to NEM 2.0? No, you will be grandfathered under your original SCE interconnection agreement for 20 years from your PTO (permission to operate) date. This is the date you were first authorized to turn on your solar panels. Will my solar savings be better or worse under NEM 2.0? The good news is that solar will still save you a ton of money under the new program. Especially when you consider solar prices and finance programs in are better than they have ever been. Due to California's high electricity rates, summer AC usage, and abundant annual sunlight solar makes more sense in here than almost anywhere in the United States. If you missed NEM 1.0 and have a high electric bill, a solar energy system will still provide a great return on your investment and save you money from day one on your electric bill. The current NEM 2.0 is set to expire in 2019 (potentially even earlier if the new solar installation cap is met), and we can be sure that NEM 3.0 will probably not be as generous as NEM 2.0 so you’d be best served to get grandfathered for 20 years under net metering 2.0 while it’s still available. At SolarShoppers by Revolt Electric, we can help you start saving right away with a solar system interconnected under the current net metering 2.0 plan. SolarShoppers is AV’s #1 rated solar company. Contact our experts today so we can show you how Net Metering 2.0 works for homeowners who are considering going solar.