Solar has been booming in California as homeowners take advantage of the numerous incentives for solar in the state, including the expanded investment tax credit introduced in the Inflation Reduction Act. The 30% credit is an excellent incentive to make the switch now, but those interested in solar should be aware that in December 2022 the California Public Utilities Commission passed a new solar billing plan that alters how net energy metering works. Here’s what you need to know about the upcoming changes.
NEM & Its Impact on Solar Power in California
Most people have at least a vague idea of what net energy metering (NEM) is when they do a bit of research into solar photovoltaic systems. However, the details of the concept can be surprisingly complex — and California’s new NEM rules have added new layers of complexity. Luckily, top-tier solar companies like Simply Solar are on your side and want to make sure you know exactly what to expect from this technology.
Net Energy Metering Explained & Installed
In the simplest terms, net energy metering is an arrangement in which your solar panels are connected to your local power grid. Any surplus power your system generates can get pushed onto the grid in exchange for credits on your energy bill. There are a variety of factors to getting net metering to work to your advantage, and it’s important to account for these in the design of your system. A reputable solar company will ask about your home’s square footage, energy efficiency and usage, and what your expectations for net metering are.
Once your system is designed, the installation will include connection to the grid, setting up your net meter, and ensuring you’re equipped to use it to get the maximum savings from the system.
Navigating the New NEM
The coming changes to NEM apply to customers of PG&E, SCE, and SDG&E. The main update to note is that the export rates for residential solar energy will change from what customers pay for energy to an “Avoided Cost Calculator,” which is complex and varies by both month and hour.
California’s new NEM agreement is perhaps not as straightforward as the previous system of on- and off-peak, which can make understanding net metering even more confusing. Under the new rules, the average export rate you earn for pushing energy back to the grid is about 75% lower. However, the new rates fluctuate down to the hour. California generates plenty of solar energy, but the problem is not having enough of it to use during evening hours when the panels aren’t producing as much. That’s where solar battery storage comes in.
NEM in Practice
As an example, the export rate for the peak demand hours in September can reach as high as $3.32 per kWh. If you choose to install battery storage along with your solar panels, you have the power to choose the time you send power back to the grid, rather than relying on the lower rates you can receive for basic daytime generation and grid transfer.
Indeed, the new structure is a boon for those who install battery storage along with their solar panels. With solar battery storage, owners can save up excess electricity during the day, when export rates are lowest, and push it to the grid during the evening and at night when export rates are exponentially higher. You’ll also have the peace of knowing you’ll have backup power for your home in the event of a power outage.
An Advocate for Education
The bottom line is that as solar gets a little more complicated, we’re here to keep it simple. As a premier California solar company, Simply Solar is invested in ensuring our customers get the most beneficial net metering configuration for their budget and expectations. If you’re confused by the changes to NEM, have questions about net metering, or just want more information on solar in general, we’re the company to call.
Call us at (707) 285-7037 or contact us online to start benefiting from solar energy.