Net Energy Metering (aka NEM) has definitely helped the growth of solar industry and it started with NEM 1.0 which had obvious benefits. A cap was defined for NEM 1.0 and Southern California Edison is reaching the cap. The good news is that it doesn’t eliminate NEM entirely, and it is changing to NEM 2.0 which is not as good as NEM 1.0. Although this change is not slowing down the solar installation rate, it is less appealing to the solar system owners. Following are the main changes:
- Mandatory Time-of-Use (TOU) Rates—Under NEM 1.0, residential customers on an SCE tiered rate structure before installing a solar power system continue on that rate after interconnection. NEM 2.0 forces new solar customers to shift to a TOU rate which is not the best rate for majority of customers. You may wonder why this is important. Usually, solar power systems have the best production from 9 a.m. to 2 p.m. SCE’s TOU rates are expensive for energy consumed between 2 to 8 p.m. which means that energy passed on to the grid before 2 p.m. is less valuable to the consumer than the energy they have to import from the grid in the evening after the solar power system is no longer producing. This may cause additional charges.
- Imposition of Non-by-passable Charges (NBCs)—Currently, your energy charges can be zeroed out or even you may get credit if your solar power production equals or exceeds (respectively) your consumption from SCE. Under NEM 1.0, you will pay for the power if your consumption exceeds your solar production. Under NEM 2.0, for every kWh imported from the grid, whether it can be netted out, there are NBCs charged for that energy. The good news is that this charge is around 2.2¢/kWh, but this may increase in future, and it does not apply to solar energy consumed locally. This change will reduce your solar savings due to the additional charges.
- New Interconnection Fee—It did not cost anything to customers who connected to SCE’s grid under NEM 1.0, but there will be a one-time charge of $75 for those who connect in future under NEM 2.0.
In the end, it may be helpful to re-emphasize that NEM 2.0 is not the crushing blow to solar that some feared it might become. But it will lower your short term and long term savings. Hence, it just makes sense to sign up for a solar power system while NEM 1.0 is available if you want to take control over your energy costs. According to SCE’s website the deadline is estimated to be July 1st, or sooner depending on when they reach their cap.
To learn more information about NEM 2.0 and to obtain a free quote from Solar Optimum, call 818-804-3122 today.
Source: SolarPowerWorld Online