The process by which solar panels can save you money is known as net energy metering, or NEM. It works by making sure that every extra kilowatt-hour of electricity that is generated by your solar panels is utilized to offset a kilowatt-hour of electricity consumed from the grid whenever the sun is very dull.
NEM was always legislation in California since the years of 1995, and it affects all customers’ three main utilities:
- PG & E
- SDG & E
So, let us review this NEM so that you will get an idea about what is a true up bill because of the proposed NEM for the next year.
Net metering is a scheme that allows customers to install tiny solar, biogas, wind, and also fuel cell production facilities to meet all or part of their onsite power needs.
Customers that create their own energy (also known as “customer-generators”) can use NEM to meet their energy needs on-site and get a credit given on their electricity bills for any amount of surplus energy they feed back to their own utility.
Participation in your NEM does not preclude a customer-generator from receiving any other electric utility credit, rebate, or incentive.
In California’s three biggest investor-owned (IOU) regions, more than 90 percent of all customer-sited solar power tied to the grid is on NEM pricing.
The current NEM program, NEM2, was approved by the CPUC on 28th January 2016, in Decision (D.)16-01-044, and is now available to all customers.
The current program of NEM began on 29th June 2016, in SDG&E’s service territory, on 15th December 2016, in PG&E’s service region, and on 1st July 2017, in the service territory of SCE.
The scheme gives customer-generators full credits for the retail energy rate that is exported to your grid in exchange for a few fees that bring NEM and non-NEM consumer costs closer together. Any customer-generator who applies for NEM will be screened:
- Pay an interconnection fee that is only paid once. Customers with facilities below 1 MW must only pay a one-time fee for interconnection based on each previous interconnection cost of IOU, which must be pre-approved. The PG&E price is $145, the SCE fee is $75, and the SDG&E fee is $132.
- Customers with systems larger than 1 MW should pay an interconnection charge of $800 as well as all transmission and distribution system upgrades.
- Pay non-negotiable fees. Customer-generators will pay nominal fees for each kilowatt-hour of power they consume from their grid, much like regular utility customers. These fees go towards critical services like low-income housing and energy efficiency.
- Switch to a time-of-use rate (TOU). For participating in NEM, a customer-generator will be needed to take any service on your TOU tariff if already they are not on one.
It is also crucial to recognize that this will be a very complex subject that is still being worked out and that it may be difficult to comprehend. We have tried to be as clear and simple as possible, and also we encourage everyone to learn everything they can.