San Rafael, Calif., March 18 — California has embarked on a rewrite of the key policy that governs how anyone with a solar panel reduces their energy costs by exporting power to the grid.
Known as “Net Energy Metering,” or by the initials NEM 3.0, this third edition of the state’s policy for solar rooftops could make solar energy less valuable to new solar customers, setting off a rush to grandfather projects under the existing policy, and possibly affecting other states’ policies nationwide.
The three investor-owned utilities in California just filed a joint proposal to replace net metering with a tariff cutting residential solar to 23% of its value today; charge residential generators about $75 a month in fees; and charge commercial generators fees of $1,000-$3,400 a month for a 250-kW system, according to the California Solar + Storage Association (CalSSA).
Sage Energy Consulting has launched a series of updates on California’s pending NEM 3.0 policy, starting with a deep dive into the issue which is available here. Sage’s Managing Principal & CEO Tom Williard, author of the update, says that:
- NEM 3.0 is likely to result in a significant reduction in the value of energy produced by new customer solar PV systems in California, adding to the challenge facing the industry and its customers from the future step-down in the federal solar tax credit.
- The California Public Utilities Commission is considering a number of options to replace the current Net Metering including Net Billing and Feed-In Tariff. These policies are not traditional net metering and could have a dramatic impact on the value of onsite solar energy production, as explained in the update.
- Compensation for onsite, behind-the-meter energy generation is likely to decrease over time on a real dollar basis, because of the cost of service, equity issues, and the fact that generation of electricity itself is getting cheaper. On the other hand, the cost of purchase and installation of solar-plus-storage systems is currently coming down even faster than the decreasing value of the electricity they generate and manage.
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