What does this mean for current and future solar customers?
There are changes coming to how your property’s power interacts with the grid. Whether you are a long-time solar customer or a soon-to-be solar customer, NEM-3 may affect your current solar incentives. We will go through the most asked questions about the NEM program and proposed changes to it.
What is NEM?
Solar customers earn NEM credits by selling their excess energy. NEM, Net Energy Metering, is a solar incentive program that outlines how power utilities can buy energy that is produced by individuals and businesses.
How does NEM-3 compare to NEM-2?
While NEM-3 is not written in stone yet, there has been speculation by solar experts that NEM-2 offers far better benefits to solar customers in comparison to the upcoming NEM-3.
Involved parties are pushing for an increase in energy storage monthly fees and a reduction of the value of NEM credits. For residential customers, the new fees proposed by the utility companies are on the order of $75 per month just to be connected to the grid without even using grid energy. For commercial customers, the utilities have proposed new monthly fees that work out to $1000-$3400 per month for a 250 kW system.
Multiple parties have proposed to reduce the value of NEM credits by 55%-80%. CALSSA does not expect the CPUC to approve proposals that go so far, but most observers expect the significant change that could devalue the overwhelmingly positive benefits of going solar.
What does this mean for NEM-2 customers?
Current NEM-2 customers are not subject to any NEM-3 changes for the first 20 years of their installation. Some parties are proposing to change this, but the California Public Utilities Commission (CPUC) has ruled it out of scope.
When does NEM-3 go into effect?
NEM 3.0 is expected to be adopted as early as November 2021 to early 2022.
To qualify for NEM-2 benefits, future solar customers must submit an initial interconnection application (finalize their system’s design) before the November 2021 decision. The full 20-year NEM-2 term may also apply to customers that submit applications between the decision and the implementation date several months later.
For commercial customers, a complete interconnection application includes a system design, so the size and electrical layout of the system must be finalized before submittal. Minor equipment changes are often allowed on a pending application, but significant design changes force customers to withdraw the application and submit a new one.
If I am considering getting solar, what should I do?
If you are looking to get solar within the next year. It is time to meet with an installer to start designing. Customers must be confident they have finalized their system design before November 2021 to get the full benefits of NEM-2, and they may get some or all the benefits if they apply between that date and approximately Q3 2022.
If you need residential or commercial solar panels for your property, contact Simmitri. Unlike other companies with a cookie-cutter approach, we believe that a successful solar installation focuses on every client’s unique needs and requirements. Contact our team to set up a solar consultation today!