The California Public Utilities Commission recently voted to enact NEM 2.0., which will take effect around July 1st when NEM 1.0 reaches its cap. For the past decade under NEM 1.0, the net energy metering policy has assured net-metered customers that they’d earn retail-rate payments for their surplus solar energy, helping to push the state to lead the country in rooftop solar deployments.
Homeowners and businesses can use California’s net metering policy to receive bill credits for the excess electricity that their solar panels produce, as long as the system is less than 1,000 kilowatts (1 MW). With the help of net metering in California, electric utility customers who install solar typically save tens of thousands of dollars on their electricity costs over the lifetime of their residential solar panels.
In fact, Southern California Edison (SCE) is now in the process of phasing out NEM 1.0, initiating NEM 2.0. NEM 2.0 will have fewer solar incentives and new rate charges. Homeowners considering going solar need to get their solar installed before the cap is reached to be grandfathered in on Net Metering 1.0.
Net Metering 2.0 makes a few minor changes to California’s original net metering policy, but it preserves the key element that makes solar economical for California residents: retail rate bill credits. Homeowners and businesses that enroll in NEM 2.0 will still receive per-kWh credits for their solar electricity that are equal to the value of a kWh of utility electricity. This means that the economics of solar are still very favorable under NEM 2.0.
“Solar systems would not be very effective if it wasn’t for of NEM,” notes Amir Salahi, Sales Manager at Solar Optimum. “As more and more buildings are converting to solar electricity — as opposed to conventional electricity — the NEM is changing, and those changes are NOT favorable to the solar industry, but the good side of this equation is the technological advancement of Energy Storage systems. You can generate Electricity during the day, and store it in an advanced Energy Storage system (such as Tesla Powerwall Battery) to consume it when you need it at night time when solar is not generating electricity. Not to mention, the energy storage system can help you to power up your house during blackouts to keep your family safe.”
Net Metering 1.0 is a list with a cap. Once that cap is reached, you can’t be on Net Metering 1.0. The list is full. It’s very important for consumers to go solar before the list fills up in order to get the best incentives.
All NEM 2.0 customers are put on a Time of Use (TOU) schedule, and charged higher rates for energy usage during peak hours. This especially affects anyone who runs their air conditioning, or families who stay home for a portion of the day. Solar customers who don’t get their solar installed in time to be grandfathered in on NEM 1.0 will be credited lower amounts if their solar panel system is producing extra. NEM 2.0 also includes a new interconnection fee.
“With current prices as low as they are, there will likely never be a better time to go solar” says Solar Optimum President and CEO Arno Aghamalian, “especially now, as Southern California Edison nears the cap for Net Metering 1.0 and going solar sooner, rather than later, just makes sense.
Customers that go solar before NEM 1.0 changes are grandfathered in, and receive the best solar incentives for 20 years. NEM 2.0 starts on July 1, 2017 — or once Southern California Energy reaches a cap in energy usage for NEM this year.
If anyone installs solar panels before then, they are guaranteed a spot on the original NEM program plan. That means that now is an urgent time to install solar—before these new changes go into effect. Those interested in solar panels need to install as soon as possible because SCE could certainly reach their energy cap before July 1st—and the panels need to be installed and approved before the cap is reached.
The Net Metering changes also come on the heels of a new high usage fee instituted by several California electricity companies. The 2017 high usage surcharge comes after the historic rate increase in 2016. With all these factors in mind, now is a better time than ever for homeowners to go solar, reduce their electricity bills, avoid rate increases, and lock in their solar incentives.
For homeowners that want to install solar and guarantee their placement on the NEM 1.0 list, there are several factors to consider when choosing a solar contractor. The California Solar Initiative (CPUC) and the California Energy Commission recommend choosing a contractor such as Solar Optimum, an experienced and acclaimed solar provider known for its stellar reputation, the finest use of technology, and commitment to the highest level of customer service.
Don’t let the opportunity to take advantage of NEM 1.0 slip away. Contact us at Solar Optimum as soon as possible to get more details. Give us a call at (800) 552-9970; we’ll be happy to answer any questions and provide you with a complimentary quote.
