When you consider the value of a solar system, you must in part consider the value of energy exports. Energy exports are just part of the total picture, but they can change how you design your system, and they certainly can impact how you use your system throughout the year. With new solar incentives on the horizon for California, now is a great time to start thinking about the role energy exports will play in the life of your solar system.
What are Energy Exports?
When we talk about energy exports, we’re talking about the process of generating and then selling energy back to the utility. Typically this is done with excess energy, allowing you to make the most of all the power you generate. Customers who export will receive a credit for the energy they export, which will show up on your bill.
Energy Exports and Excess Energy
To fully understand the value of energy exports, we need to discuss the idea of excess energy. Under the current Net Energy Metering agreement, NEM 2.0, solar systems are typically designed to cover the energy usage of a homeowner. Sometimes systems are sized up or down from this baseline usage depending on what the customer is looking for from their installation - those looking to simply offset their energy consumption might size at or below usage, while those looking to expand their usage or export power might size above current usage.
Basically, the size of the system is determined by what energy the customer wants to cover, and in the event that there is more energy generated than the customer can use, they can export that power back to the grid, and receive a credit on their energy bill. Sometimes customers would add a battery to their system, to make storing and exporting energy even more profitable, but overall they were not considered a necessity. Under NEM 2.0, exported energy was valued based on on and off peak periods, and a customer could decide to export at the times of day that would net them the most value for their generated energy.
Changing Solar Incentives
Recently, the CPUC decided that the Net Energy Metering agreement should be updated, and thus the current export incentives are being phased out for a new agreement, known as NEM 3.0. Under the new agreement, the value of energy exports is changing dramatically, and customers need to be aware of how those changes will in turn impact the design and operation of their solar systems. Firstly, the value of energy exports under the new NEM agreement has been broadly reduced, with some exceptions. The new export time table is admittedly complicated, which is why it pays to have an industry partner like Simply Solar to help you make the most of your investment.
For example, while most of the export values have been reduced, there are actually some that exceed those found on the previous agreement. Working with your provider to create an energy export plan is the best way to prepare for and utilize these incredibly valuable export periods, so be sure to reach out to your consultant to discuss those options. There is also the Glidepath, a export bonus value adder available to those who enroll on the new NEM agreement within the first 9 years. While energy exports are going to be generally reduced under the new system, the Glidepath represents additional value for your system that you won’t want to leave on the table.
New Design Philosophies
Under the new agreement, changes in design philosophy will be required to help customers achieve the full value of their solar investment, and Simply Solar is leading the charge into the Zero Export future. Zero Export systems are not meant to dissuade customers from exporting; on the contrary, as we mentioned there will be times under the new agreement where energy exports are even more valuable than ever. However, the general idea will be to size systems to provide whole home coverage, and enable customers to rely on the grid as little as possible.
To that end, battery storage is also becoming a premium value adder for new solar systems. No longer just a nice component to have, whole home battery backup is enabling customers to avoid paying high premiums for energy by providing day and night energy coverage, resiliency against blackouts, and ultimately, the ability to take advantage of high value energy export periods when they do come around. Together, battery storage and Zero Export design will allow you to achieve the full potential of your solar system, while also enabling you to export energy when it suits you.
The Future of Energy Exports
As mentioned above, energy exports are just one component of the full value of solar energy. From the incredible solar investment tax credit to the substantial property value increase provided by solar, the energy savings you lock in when you stop paying for power and the resiliency you afford yourself against grid instability, the core incentives of solar are very much alive and well. As we move into the future of California’s evolving energy incentives, solar will continue to prove itself an increasingly valuable investment.
That being said, if you are interested in more actively engaging with energy exports, now is the time to act. Our teams are experiencing a dramatic increase in demand for NEM 2.0 applications, and the best way to increase your chances of making it onto the current agreement is to reach out to our consultants as soon as possible. Schedule your appointment today, and let us help you achieve the full value of your energy exports!
