Changes to NEMA Benefits Under NEM 3

As the solar landscape continues to change, our goal at JKB is to ensure you have all the information you need to make the best decision for your operation. Over the last year NEM has been a hot topic and a moving target. With the looming April 13th CPUC (California Public Utilities Commission) decision deadline behind us, let’s look ahead to some bright spots – one being benefits still available for some under Net Energy Metering Aggregation (NEMA). 

First, here is some NEMA background and terms: NEMA allows a single customer with multiple meters on the same property, or on adjacent or contiguous properties, to use renewable generation to serve the aggregated load behind all eligible meters. They also receive the benefits of Net Energy Metering (NEM). All accounts must be under the same name and additional renewable systems can be located on the same property.

Now that NEM officially ended on 4/14/23, the new program is called Net Billing Tariff (NBT). It reduces compensation for excess power sent to the electric grid by 75% compared to NEM 2.

What are the differences between NEM and NBT?

Many states offer a credit equal to the retail rate of electricity for exported solar production. This is known as one-to-one net metering in which you’re credited at the same rate for solar exports as what you’d pay to use electricity from the grid.

In NBT, the CPUC establishes a new rate for crediting solar exports, shifting the structure from net metering to net billing, which is much lower in value – and by lower, we mean…significantly lower. NBT is based on “avoided cost” rates, meaning what your utility pays for any electricity you send to the grid won’t be based on your typical electricity rates, like a traditional net metering credit, but rather calculated separately. The exact rate varies depending on the hour of the day, day of the week (i.e., weekday vs. weekend), and month you export the energy. In fact, there are 576 possible export rates in total! However, on average, the avoided energy costs rates come out to about 25 percent of retail electricity rates during those same hours, which is how we arrive at the value of net metering credits decreasing by about 75 percent under NBT vs NEM2.

Can I still be grandfathered into NEM 2?*

One group of customers can still enroll in NEM 2. If you have more than 1 meter on same site, you can enroll in NEMA and build 1 system that powers all your meters. Specific terms include:

1. All meters must be on land owned, leased, or rented by the same customer. You will be asked to submit parcel maps to prove this.

2. All meters must be on parcels that touch, in an unbroken chain, the parcel of the Generating Account. Parcels divided only by a road are allowed.

3. Must have had 2 or more meters on contiguous site as of 1/20/23 (you can’t add a meter to create eligibility for NEMA).

Thankfully CPUC was limited to the number of changes they could make to the program in previous proceedings. But they have a new proceeding that will make changes by the end of 2023. Now is the time to maximize your solar benefits. Please reach out to rich@jkbenergy.com with questions so we can help you determine the best path forward for your operation. 

*Disclaimer: This only applies to PG&E, SCE and SDG&E. These rules do not apply to local and municipal utilities who design their own programs.