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Net Energy Metering 2.0: The Upcoming Changes For Solar

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On January 28, 2016, the California Public Utilities Commission (CPUC) issued Decision D. 16-01-044 providing direction on the state’s Net Energy Metering Successor Program, known as NEM 2.0. The decision stated that once the 2,409 MW Cap for the original NEM (NEM1) program is reached, a NEM Successor (NEM2) program would take its place. Now that the cap has been reached, all new NEM customers must take service under the NEM2 program. Existing NEM1 customers who want to switch may also take service under the NEM2 program.

Here are the changes from NEM 1.0 to NEM 2.0 adopted by the CPUC:

1.     Grandfathering: NEM 2.0 customers will have their accounts grandfathered on this successor tariff for 20 years from the date of first commercial operation.

2.     Residential TOU rates and fixed charges: For residential customers, NEM 2.0 introduces the following:

a)      Residential customers will be required to use TOU rates (when available).

b)      Fixed charges may be introduced in the future.

3.     No maximum generator size for NEM 2.0 accounts.

4.     Interconnection fees: NEM 2.0 customers with onsite generation systems of less than 1.0 MW will now be required to pay “a reasonable fee” for interconnection. We anticipate this fee will be in the range of $75-$150 depending on the electrical utility and account type. As with the current NEM regulations, NEM 2.0 customers connecting systems less than 1.0 MW will not be required to pay study fees and distribution upgrade costs.

5.   Non-bypassable charges. NEM 2.0 accounts are required to pay non-bypassable charges (NBCs) for all energy they consume. 

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