What’s Happening with Net Energy Metering in California
If you’ve done any research on solar panels, you’ve probably come across the term “net energy metering.”
Net Energy Metering Defined
Net energy metering is the term for the billing arrangement where customers with solar panels get credit for the extra energy their systems generate.
When solar panels produce more energy than you need, your electricity meter starts running backward to credit you for the excess. And when you need more energy than your solar panels produce, you draw from the utility grid. At night, for instance, you’ll need to draw power from the grid—solar panels can’t produce energy without sunlight.
What to Look for on Your Power Bill
In California, solar panel customers with net energy metering will get a monthly statement showing the net amount of energy used. If your solar panels produced more energy than you used, you’ll have a credit. On the other hand, if you used more energy than your solar panels produced, you’ll owe money to your utility company.
California net energy metering agreements are generally set up so that you can pay for your net consumption each month, or settle your account just once a year.
Understanding Your Net Energy Metering Credit
The size of your net energy metering credit is mainly determined by the amount of extra energy your solar panels produce. That’s the amount above and beyond what your household consumes.
You can maximize your net energy metering credit by installing a bunch of solar panels to ensure that you’re producing more energy than you use. However, the bigger your solar panel system, the more it will cost you. The good news is that you can take advantage of PACE energy solutions to finance your solar panel system with no money down and no credit check.
Instead of installing so many solar panels, we recommend an alternate approach. We help you reduce your use first by addressing other energy inefficiencies in your home.
Let’s say you were going to spend about $21,000 on solar panels alone, which is the average cost for a typical home system of fewer than 10 kilowatts. But your HVAC system is 15 years old and you have drafty single-pane windows.
The smarter option would be to reduce your use first by replacing your HVAC system and installing high-efficiency dual pane windows. That way, you can install fewer panels and still get the same effect. The total cost of your project will be about the same, but instead of spending $21,000 on solar panels alone, you’ll get the new HVAC system and new windows. You’ll be improving your whole-home energy efficiency and adding to the beauty and comfort of your home.
Net Energy Metering Payouts in California
Under California’s original net energy metering rules (NEM 1.0), utilities had to reimburse solar customers at full retail rates for the extra energy their solar panels produced. But NEM 1.0 only applies until a certain cap is reached or until July 1, 2017—whichever comes first.
In San Diego, SDG&E is likely to hit the cap way before 2017. It could happen in the next month or two. And that sets the stage for the next generation of net energy metering rules, or NEM 2.0.
Here’s what happened: As solar soared in popularity, the utilities felt like they were getting a raw deal. They lobbied to reduce reimbursement rates, and they also asked the Public Utilities Commission to approve new fees for solar customers.
Luckily for solar customers, the PUC decided to maintain retail reimbursement rates, so installing solar panels is still an excellent way to reduce or even eliminate your power bill. But as soon as NEM 2.0 takes effect, new solar customers will have to pay some additional connection fees. They’ll also be subject to time-of-use rates.
Learn More About Reducing Your Power Bill with Net Energy Metering
At RC Energy Solutions, we carefully assess your power use and come up with a customized plan to help you save the most money. We know all the details of NEM 2.0, and we’ll gladly explain how it applies to your unique situation. If you act fast, we may even be able to get you grandfathered in under the NEM 1.0 rules.
Contact us for your free, no-obligation consultation and learn how you can save on your energy bill with smart home improvements, powered by the sun.