The CPUC is preparing to make changes to the way solar energy is net metered by the big three investor-owned utilities (PG&E, SCE, SDG&E). This will end the current net metering rules known as NEM2 and replace them with new rules under NEM3. There is little certainty about what NEM3 will look like, what we know is that it will be less favorable to solar customers. If you are thinking about going solar, get into NEM2 now while you still can.
- Going solar will cost more under NEM3
The CPUC is evaluating more than a dozen proposals for NEM3 rules from a variety of stakeholder groups, including; utilities, solar industry groups, environmental groups, and others. While the structure of the proposals varies, the common thread is that they all have some mechanism for increasing the costs or reducing the benefits of going solar. The core idea is that the grid provides a service to solar customers by storing generated electricity for use at other times. This service is not free for the utility to provide and should not be given for free to solar customers at the expense of other ratepayers.
- There is still time to get into NEM2
While the CPUC is still reviewing proposals and making the rules for NEM3, customers will be able to go solar under NEM2. The exact timing of the closure of NEM2 is uncertain at this point. Some proposals suggest that NEM2 should close as soon as the CPUC announces the rules for NEM3, which could happen as early as January 2022. It is also possible, like the transitions from NEM1 to NEM2, that the NEM2 would remain open until NEM3 has been fully implemented a few months later.
Either way, time is running out. To qualify for NEM2, a customer must have submitted an interconnection application to the utility before NEM2 closes. Interconnection applications are detailed and allow limited flexibility for changes after submittal. Therefore, it is necessary to complete much of the project design and feasibility work prior to submitting an interconnection application.
While unpleasant, these changes are a necessary evolutionary step as solar becomes mainstream. As an industry, our job is to ensure that NEM3 provides a viable and robust future for renewable energy in California.
For more information on solar and net metering and what you can do to help, visit: