The California Public Utility Commission (CPUC) just lately introduced its long-awaited revised proposed choice on NEM 3.0 (California’s coverage for reimbursing non-utility photo voltaic electrical energy turbines). While Sunworks and our renewable vitality colleagues are removed from glad, this up to date proposal is an enchancment during the last one. The California Solar & Storage Association (CALSSA) and different advocacy teams are making one final effort to improve NEM 3.0 earlier than the CPUC votes on December 15, 2022. In the meantime, here’s what we all know.
What is Net Energy Metering (NEM)?
First of all, for many who are unfamiliar with NEM, Net Energy Metering (NEM) is a kind of settlement between utility corporations and non-utility house owners of photo voltaic vitality producing methods. NEM determines how much solar owners are credited for any unused electrical energy they ship to the grid.
It additionally establishes when photo voltaic house owners are billed for his or her attracts on the grid vs. their contributions to it (month-to-month or yearly, for example) by way of a “True Up” invoice. Generally, an extended true up interval permits photo voltaic house owners extra time to contribute their electrical energy to the grid to offset any energy they might have to purchase.
The Good: No More Monthly Fees
The previous proposal for NEM 3.0 included charges for grid utilization. These charges would have added vital prices for each residential and industrial photo voltaic house owners. Fee estimates for a 750 kw industrial system have been projected to be $5,595 per month beneath the final proposal. We are happy to see that the latest proposal for NEM 3.0 has dropped these charges.
These charges would have made photo voltaic in California prohibitively dearer and doubtlessly damage State clear vitality objectives.
The Bad: NEM Credits Are Significantly Reduced
Unfortunately, the latest NEM 3.0 proposal nonetheless features a vital discount to NEM credit. Credit quantities will differ by demand all through the day and 12 months, however total, they’re considerably decrease. On common, NEM charges will decline by 75% for residential and nearly 60% for commercial installations within the first 12 months of NEM 3.0. Rates will then proceed to lower for one more 4 years.
This proposed credit score change is clearly not favorable for photo voltaic or for California’s renewable vitality objectives. Advocates are making final attempts to sway the CPUC to extend NEM credit. The fee is anticipated to vote in December for coverage adjustments that may most likely go into impact in April 2023.
Neutral: Overbuilding and NEM 2.0 Grandfathering Are Allowed
Potential photo voltaic clients seem to have two choices to mitigate a few of the misplaced credit worth beneath NEM 3.0. The first and finest rapid choice is to lock in NEM 2.0 credit earlier than NEM 3.0 takes impact. If a brand new photo voltaic buyer will get their mission permitted earlier than April 2023, they will lock within the outdated, extra favorable credit.
Additionally, clients can doubtlessly keep away from a few of the unfair NEM 3.0 costs by “overbuilding” their photo voltaic system and including vitality storage. Under this feature, photo voltaic house owners can overbuild their system by as much as 50% to supply extra vitality than they’re projected to wish. They can then retailer this vitality to keep away from shopping for from their utilities firm on high-usage or low-production days.
In quick, whereas the up to date NEM 3.0 proposal is much lower than best and is extraordinarily pro-utility and pro-union on the expense of customers and the setting, potential photo voltaic house owners can discover some consolation within the choices they might nonetheless have. Acting rapidly over the following few months and incorporating storage into future photo voltaic installations could go a great distance in managing the impacts of NEM 3.0.