Net Energy Metering

What is Net Energy Metering?

Net Energy Metering (NEM) is a solar incentive that allows you to store your excess energy to the grid in exchange for credits. This means that at night or when your solar panels are under producing, you’ll pull energy from the grid and use these credits to offset the cost of that electricity. For example, if a home produces an excess 500 kWhs during the month of February, then in June, if the home consumes an excess 500 kWhs, net metering allows that person to use the credit and have an overall usage of ZERO kWh for the month.

How does Net Metering Work?

net energy metering explained

Net Energy Metering is performed on a 12-month billing cycle and there is an annual true-up. Your annual true-up bill depends on when your net metering cycle begins and ends. Typically, the utility sends a monthly statement with a projected total at the end of the 12-month cycle. These statements show how much energy is consumed and how much energy is generated. The generated amount is subtracted from the consumed amount which equals to your net consumption for that month.

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What's the Difference?

What is the difference between net metering 1.0 and net metering 2.0? Net Metering 2.0 will require a grid connection fee ranging from $75-$150. This will be a one-time fee to become a net metering customer. Many solar companies are including this fee in the project cost to make it seamless to customers. NEM 2.0 will require customers to possibly pay transmission charges from $10-$20 per month depending on the territory. They will also be required to pay non-by-passable charges for the power consumed on the grid, averaging between $0.02 - $0.03 per kilowatt hour. Probably the biggest change to NEM 2.0 from 1.0 is the move to Time of Use (TOU) billing. Net metering 2.0 customers will be forced to go to TOU billing which means a higher cost of power during the day and a lower rate at night. For most solar customers, this is ok because the solar generates the most electricity during most expensive rates and, thus,  is offsetting all the higher rate energy during the day. However, in very hot climates, where the major source of power consumption is air conditioning during the day, the solar may not be able to provide all the energy needed, so the excess energy will be bought from the utility at that rate.

A Silver-lining...

The good news is if you live in SCE or PG&E territory you still have time to get Net Metering 1.0. Based on current projection SCE will be reaching the 5% CAP early in 2017. PG&E is a little farther out and not until later in 2017. Either way, there’s no time to waste as solar is not installed in a day. It typically takes 2-3 months from when a contract is signed to get the solar installed, due to permitting review by the jurisdiction. It is imperative that you get started immediately to ensure you’re part of Net Metering 1.0. Once you’re accepted in the Net Metering program, you’re in for 20 years!

"Buy low" and "Sell High"

Well designed solar facilities coupled with the Net Energy Metering policy allows you to "buy low" and "sell high". Don’t waste another minute and call us to find out how you can save money by going solar and get in on Net Energy Metering. Act today, so you can also take advantage of the 30% tax credit while it is still available!