Net Energy Metering

On February 3, the California Public Utilities Commission (CPUC) issued a notice that the proceedings regarding the Proposed Decision to Change the Net Energy Metering (NEM) Program are officially on hold. The proposed decision, issued on December 13, 2021, will not appear on the Commission’s voting meeting agenda until further notice. The notice stated that the Commission needs additional time to “analyze the record and consider revisions to the proposed decision based on party comments.”

The NEM Program empowers electricity customers in California to install solar panels and storage systems to save money, increase resiliency and enhance overall sustainability efforts. The CPUC proposed changes including:

• A New Monthly Fee (aka Grid Participation Charge) for New Residential Solar Projects
• A Substantial Discount to the Value of Exported Electricity for New Projects
• A Shortened 15-Year Grandfathering Period for Existing NEM 1.0 and NEM 2.0 Projects – In the transition from NEM 1.0 to NEM 2.0, existing NEM 1.0 customers were granted a 20-year grandfathering period. Under the previous proposed decision, both NEM 1.0 and NEM 2.0 projects would transition to this new NEM program 15 years from the installation date of the project.
• Only a 10-Year Guarantee that the rules of the program would not change

If approved, this decision could have negatively impacted Californians looking to go solar. The investor-owned utilities (IOUs), Pacific Gas and Electric, Southern California Edison and Sempra Gas Company (San Diego Gas and Electric) all jointly filed comments and called for cuts to NEM that could have reduced incentives for customers to invest in their own solar energy systems. The Utility Reform Network (TURN), a consumer advocacy group, stated that, “Net metering as currently constructed in California, due to the extremely high retail rates that we have, is literally the most expensive strategy for promoting clean energy use we have on the table today.” TURN argued that it is more efficient to invest in renewable energy at wholesale prices and that non-solar customers are getting taken advantage of because utilities are compensating for all the revenue lost from solar panel owners by charging more to everyone.
For now, no changes are pending to NEM and it remains as-is. As always, CalChoice will continue to monitor any changes to NEM.