SACRAMENTO, CA. – In California, there has been a multi-year war waged over the fate of a mechanism called net energy metering (NEM). The process involves customers sending their excess solar-generated electricity to the grid and receiving a credit on their utility bill at a retail rate for all exported electricity.
A new revised NEM proposal is set to be released after November 8. It will be watched closely by Californians as utilities now argue that the enactment of the Inflation Reduction Act will make fair net metering rates unnecessary.
Net Energy Metering has been a critical policy in launching the California rooftop solar market, which has grown to a robust 1.3 million homes covered in panels, representing about 50 percent of the US residential market. It also helped launch distributed commercial rooftop projects, another key part of California’s race to electrical decarbonization.
It came under threat when a new investor-owned utility-backed proposal, NEM 3.0, was placed on the California Public Utilities Commission (CPUC) desk. The proposed decision included roughly an 80% reduction in the payment for excess solar energy sent to the grid, and tacks on an $8 per kW monthly charge for all solar customers, regardless of whether they have battery energy storage or not. A common-sized 8 kW system would be charged $64 a month, a fee that makes solar a non-option for most customers.
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