On Monday, December 13, 2021, the California Public Utilities Commission released their proposed decision regarding changes to California’s Net Energy Metering (NEM) Program. NEM is the program which enables behind-the-meter / rooftop energy systems (like solar) to earn credits for exporting electricity to the grid.
The Proposed Decision includes*:
- A New Monthly Fee (“Grid Participation Charge”) for New Residential Solar Projects –Note: non-residential solar projects would not be charged this monthly fee.
- A Substantial Discount to the Value of Exported Electricity for New Projects – Instead of earning credits based on retail electricity rates, exported electricity would be valued a significantly discounted rate (based on a new Avoided Cost Calculator). Initial estimates show an 80% reduction in credit values.**
- A Shortened 15-Year Grandfathering Period for Existing NEM 1.0 & NEM 2.0 Projects – In the transition from NEM 1.0 to NEM 2.0, existing NEM 1.0 customers were granted a 20 year grandfathering period. Under this proposed decision, both NEM 1.0 and NEM 2.0 projects would transition to this new NEM program 15 years from the installation date of the project.
- Only A 10-Year Guarantee That the Rules of the New Program Won’t Change
A final decision could be in place as early as January 27, 2022. The sunset for access to the current NEM program for new projects is expected 4 months after that final decision. Thus, interconnection applications for new projects should be submitted to utilities by May 2022 to secure the current NEM program. TerraVerde is actively engaged in these proceedings and will continue to provide updates as they become available.
TerraVerde is a leading independent energy consulting firm proudly supporting clients with the design and deployment of energy projects and programs that reduce costs, increase resiliency (backup power), and enhance sustainability. Over the past 12 years, we have supported the successful implementation of over $500 million in solar and battery projects. To date, TerraVerde Energy has delivered over $50,000,000 in energy cost savings benefits to our clients.
We would welcome the opportunity to explore whether your team has solar / NEM opportunities and help you secure the current NEM program. Write to us today at email@example.com to learn about our Risk-Free Project Development Model and request your Free Fast-Track Project Discovery Assessment.
*see the Proposed Decision for additional details regarding a new Market Transition Credit available to residential customers, special considerations for low-income customers, as well as the introduction of a new battery storage incentive program.
**stay tuned for a follow up article with a case study