Eight Frequently Asked Questions about California’s New Net Energy Metering Program
For those curious about the past, present, and future of Net Energy Metering rates, here’s what you need to know. Net Energy Metering 1.0 (NEM) Rates were implemented nearly two decades ago and were responsible for giving homeowners credits for the excess power their solar panels generate. Then came Net Energy Metering 2.0 (NEM 2.0) Rates, which adjusted the way credits were calculated to account for the increasing popularity of solar energy in California. And now, with the implementation of Net Billing (which many refer to as NEM 3.0) starting April 15, 2023, homeowners can expect new and improved ways to earn credits as well as more incentives for energy storage, electric vehicle charging, time-of-use rates, and other renewable energy systems.
Even with the changes, it’s still an exciting time for homeowners looking to harness the power of solar energy. Contact a CM Solar Electric Energy Advocate today to learn more about how a whole-home energy system – SunPower Equinox plus SunPower SunVault – will help you save on your electric bills.
Here’s what you need to know about Solar today:
- What’s the biggest difference between NEM2 and Net Billing?
Net Billing is essentially an updated version of NEM 2.0, with some key changes. One of the most significant of those is the export rates – surplus electricity supplied to the grid and the compensation for excess generation.Compensation for excess generation exported to the electric grid is applied to a customer’s bill at a rate reflecting the value of this generation to the grid. The value of the export compensation is usually lower than the retail rate, but can rise above the retail rate on late summer evenings. Solar customers can maximize bill savings by adding battery storage, so they can use or export stored energy during high-value hours.
Read more here from California Public Utilities Commission
- What are the new Net Billing export rates?
Solar customers under NEM 2.0 are typically credited for the total retail value of each kWh sent to the grid. Under Net Billing the value of solar exports is no longer determined by retail prices; instead, it will fluctuate month-to-month and hour-to-hour, and will be based on the “Avoided Cost Calculator.”
- How does a homeowner save on their Electrical Bill on Net Billing?
It is important to note that Net Billing does not completely eliminate your electric bill. However, it is possible to reduce your bill by generating enough energy to cover a portion of your consumption costs. This can be achieved through careful system sizing, using energy-efficient appliances, and adopting energy-saving behaviors. Energy Storage systems like SunPower SunVault will also be key. For more information, read our Blog on Energy Saving Tips and The Perfect Combination, visit Energy Star or speak with a CM Solar Electric Energy Advisor.
- What happens if a homeowner makes changes to an existing Solar system?
Under Net Billing, any changes to an existing solar system will require a recalculation of the customer’s bill credits. This includes changes such as adding or removing panels, changing inverters or batteries, or altering the system size. It is important to consult with your CM Solar Electric Energy Advocate. They can help ensure your system changes will not negatively impact your bill credits.
- Can homeowners who install Solar after April 15, 2023 still opt for NEM 2.0?
No, customers are no longer able to opt for NEM 2.0. All new solar customers from April 15, 2023 on will be enrolled in Net Billing.
- Are there any changes to system sizing under Net Billing?
Under Net Billing, residential solar customers with systems smaller than 50 kW can no longer use a one-time true-up option. Instead, they will be subject to a monthly billing cycle with a maximum annual true-up.
- What are the peak periods under Net Billing?
Peak periods under Net Billing vary depending on the customer’s location in California and their utility provider. However, they typically fall between 4 pm and 9 pm on weekdays during the summer months.
- How can customers ensure they are maximizing their savings under Net Billing?
To maximize savings under Net Billing, it is important to invest in a whole-home energy solution by combining Solar plus Battery Storage, using energy-efficient appliances, and adopting energy-saving behaviors. It is also crucial to work with a reputable solar provider who will help you design a system that meets your needs while also maximizing your savings. Contact a CM Solar Electric Energy Advocate today.
With Net Billing in effect, it is more important than ever for California homeowners to understand the changes to the program and how they can benefit. By familiarizing yourself and working with a reputable solar provider like CM Solar Electric you can ensure that you are maximizing your savings and getting the most out of your solar investment.
Remember, careful system sizing, energy-efficient appliances, Battery Storage and energy-saving behaviors can all help you reduce your energy bill and live a more sustainable lifestyle AND with always rising utility rates the best time to go Solar is now!