SMUD proposal would cut net metering credits, impose interconnection fees

The Sacramento Municipal Utility District (SMUD) Board of Directors plans to vote on a proposal to cut the credits that solar customers receive under net metering.

The utility currently has a range of solar compensation rates for customers, depending on the month and time of day. From June 1 – September 30, solar customers are credited anywhere between 12.77 cents per kWh  to 31.05 cents per kWh. During the rest of the year, customer credits range from 10.82 cent per kWh to 14.94 cents per kWh.

The SMUD board will vote on a proposal to set a flat rate of 7.4 cents per kWh. That rate would go into effect on Jan. 1, 2022 for new solar customers; for solar customers who increase their solar generation capacity by more than 1kW or 10%, whichever is higher; and for homeowners who buy a home with an already-installed system.

For legacy net metering customers, the new rates would be applied in January 2031. California has long guaranteed that solar users receive the same net metering credit for the lifetime of their solar system.

In addition to the reduced credits, the SMUD proposal also would allow virtual net energy metering. Through that tool, multi-tenant buildings that go solar would have available credits divided among each tenant’s electricity bill and on multifamily properties that are designated as low-income. Credits would not be extended to any other sort of multifamily property.

The proposal also would reinstate a provision under which a potential new solar system could only be sized for a home’s current energy usage, not for its projected future energy usage. That would mean customers looking to add, say, an EV + charger might need to retroactively upgrade their solar system, potentially at additional cost.

SMUD’s proposal also would place one-time interconnection fees on properties going solar. The proposal calls for fees of $475 for small (<10kW) solar systems on homes, $900 for large (>10kW) solar systems on homes, and $2,500-$5,000 for solar systems for businesses and non-profits. Investor-owned utility PG&E’s interconnection fee, for reference, is $145.

To sweeten the deal, SMUD’s proposal also includes an incentive to get a solar-powered battery. The incentive amounts to at least $2,500 in the first year and declining annually for those who choose to opt into SMUD’s demand response and peak-shifting energy management programs. For people who choose not to join those programs, the incentive amounts to $500 with a similar annual step down.

In response to the proposal, solar customers and climate change activists plan to stage a protest on September 16 outside SMUD’s headquarters in Sacramento. The protest is being held at the same time as the meeting during which SMUD directors are expected to vote.