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NEM 2.0 is Here - Now What?


  10:17:00 am, by Jim Jenal - Founder & CEO   , 459 words  
Categories: All About Solar Power, SCE, Residential Solar, Net Metering

NEM 2.0 is Here - Now What?

Net Energy Metering 2.0, or NEM 2.0 for short, is now the law of the land, at least in SCE territory.  So what does that really mean for potential solar clients?  Here’s the scoop…

NEM 2.0 brings three changes to how new solar clients will be treated by SCE (customers of PWP, LADWP, or any other muni utility are unaffected).  Let’s take a quick run through each one:

  • A one-time application fee - new solar clients will be charged $75 as part of the interconnection application process.  (In the past there was no charge.)  Not a big deal, just another annoyance from SCE.
  • Switch to Time of Use rates - this is a much bigger deal.  Most residential customers are on a two-tiered rate structure with a “penalty” tier for users who exceed 4x baseline allocation.  Under that rate structure the maximum cost for energy is 31.224¢/kWh.
    Going forward, new solar customers will be charged based on when they use energy, not how much energy they use, with a Summer, on-peak energy cost of 44.665¢/kWh!  Ouch!  Peak hours are weekdays (holidays excepted) from 2-8 p.m.
  • Non-Bypassable Charges - Under the old rules, energy that was imported from the grid could be entirely offset by energy exported onto the grid.  Now, for every kilowatt hour imported, regardless of exports, the customer will pay a small (for now) non-bypassable charge of 2.25¢/kWh.  Again, the utilities were pressing for this to be a much higher number, but for now this is a relatively minor surcharge.

So what does this all mean?  The answer is, it varies.  For some clients, particularly those with west-facing roofs, they may actually do better under TOU rates than they would have staying on the old, tiered rate plan.  But to answer that question requires a proper analysis, and this is where potential solar clients need to do their homework and look closely at their solar bids. 

EnergyToolbase screenshot

Here’s what to look for.  Your potential installer should be requesting that you provide them with SCE’s “interval data” for your home.  This hour-by-hour data for the entire year allows for a proper analysis of your usage, and makes it possible to compare that historical usage with the modeled output of your proposed PV system.  If they aren’t asking for interval data, they are taking shortcuts with their savings analysis - likely in ways that inflate your potential savings on paper, only to result in disappointment down the road.

Run on Sun uses UtilityAPI to access SCE data securely, and we employ EnergyToolbase (pictured above) to do our analysis of your potential savings - two of the most highly respected and sophisticated tools in the solar industry.  We have the tools and the expertise to give you the most accurate projection of your future savings from solar - so let’s get started!

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Comment from:
Jim, thanks for this summary. I am a solar enthusiast but I support SCE’s move here at least in broad principles. The solar customer enjoys benefits from being connected to the grid, and maintaining that connection costs SCE real money which needs to be somehow recognized in the rate policies. I have some questions though. It’s called “net energy metering 2.0″ - so is the solar customer’s energy exported to the grid credited at the same time of use rates as his consumption (so that energy injected during the peak hours gets 44.7 cents/kWh)? And if so, do you think this can create a business case for residential customers installing battery systems in order to export at that price during the peak hours? Are the costs there now to make this viable? If so, this will be great for everybody … a rational rate policy that recognizes the costs at the system level and encourages individual residential system owners to contribute to the solution. Combined with the CPUC’s “Rule 21″ improvements to inverter utility support, and despite the sometimes clumsy lobbying by the utility industry against solar, the solar industry will move toward being an essential part of managing and stabilizing the grid with less and less fossil fuel.
07/22/17 @ 02:33
Comment from: Jim Jenal - Founder & CEO
Russ - thanks for your comment. I agree that solar owners do benefit from the grid, but the grid also benefits from the investment of the solar owners. Unfortunately, when you interconnect a storage system to SCE’s grid it is not allowed (by SCE) to backfeed the grid. Nor are you allowed to charge the battery from the grid, it must be charged by the solar system. However, if the solar system exports power to the grid, that power is credited at the TOU rate. Jim
07/22/17 @ 07:31
Comment from:
5 stars
I talked to an employee at SCE and the next phase of NEM is already being tested at Edison and they plan on rolling it out as soon as 2020. They are changing the terms of net metering so customers are essentially locked into their service and after that they won’t be able to go solar. When customers are stuck on their service they’re going to significantly increase rates to cover gaps in their budget for grid maintenance and wildfire costs.
03/11/19 @ 15:25
Comment from: Jim Jenal - Founder & CEO

I think you’ve been given some bad information - SCE doesn’t get to unilaterally decide anything. Any changes to the NEM 2.0 rules need to be approved by (at least) the CPUC. The CPUC will not approve rules that make it so that consumers “won’t be able to go solar,” no matter how much SCE might wish.

In fact, Clean Power Alliance just got added to the mix, so the ability for SCE to just raise rates on their whim, are limited both by the CPUC, and competition from sources like CPA.

03/11/19 @ 18:14

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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