Solar Blog

Limited Time Savings on Solar - NEM 1.0 is Running Out

Friday, January 15, 2016

As you may know, the NEM 1.0 program that saves solar customers on an ongoing basis is running out for SDG&E. Their cap for the program is expected to be reached around April 1st which means you have roughly 2 months to get solar on your home and be approved for NEM 1.0 in order to get the best financial benefits available to you at this time as an SDG&E customer.

With NEM 1.0 coming to a close soon, there will be another program opening, NEM 2.0. This program is looking to have new fees and reduced credit value after recent proposals put forth by the utility companies. After initially rejecting proposals from the utility companies, the CPUC has released a proposed decision on this matter to be voted on or around January 28, 2016.

Continue reading to learn more about what the proposed decision seeks to implement for NEM 2.0 and what that means for your future decision to go solar.

Understanding NEM 2.0

After NEM 1.0 ends, we will have access to NEM 2.0. While there will still be savings, the utility companies proposed to change the benefits. After the California Public Utilities Commission (CPUC) voted, they rejected the proposal from the utilities. The new proposed decision for NEM 2.0 still provides solar customers with savings, but not as beneficial as NEM 1.0. The main points from the proposed decision that affect solar customers like you are:

  1. Reduced NEM Credit Value for Solar Customers
  2. New NEM 2.0 Application Fees
  3. New Non-Bypassable Charges
  4. New Mandatory Time-of-Use (TOU) Rates
  5. Each of these points are explained further below.
Reduced NEM Credit Value for Solar Customers

Currently, customers involved in NEM 1.0 receive full retail credit. That means, when your solar panels create more energy than you use, you receive bill credit at the full retail rate that your utility company is providing at that time. With NEM 2.0, it is estimated that there will probably be a reduced credit value of 4 - 9 cents per kWh. That’s roughly a 20% reduction in bill credits that you would receive for creating more energy than you use.

New NEM 2.0 Application Fees

The proposed decision seeks to add an application fee for all who wish to apply to the NEM program with their utility company. Fees will vary depending on utility company and as of right now, we are estimating the utility companies to implement one-time fees to be between $75 - $150. These fees would be subject to increase over time.

New Non-Bypassable Charges

The proposed decision also seeks to add minimal various fees and charges to bills for solar customers to go towards programs that affect everyone—those who do and do not create their own power. Similar charges are currently in place for non-solar customers.

New Mandatory Time-of-Use (TOU) Rates

Time-of-use rates are implemented by utility companies to charge subscribers higher rates during certain hours of the day.

Currently, solar customers do not have to pay into these rates but the proposed decision seeks to require that all NEM 2.0 customers after January 1, 2018 pay those rates. We are estimating subscribers before that date will have mandatory TOU rates put into place in 2019.

It is important for SDG&E subscribers to note that their utility company has recently proposed that their mandatory hours are 4-9pm, year round for both residential and commercial. We will update you if this change is implemented.

Only a Few Weeks Left to Take Advantage of NEM 1.0

The NEM 1.0 program for SDG&E is predicted to fill up around April 1, 2016. There are only a few weeks left to start the solar installation process in order to take advantage of these savings.

Contact us to get your Personalized Financial Assessment and to learn more about your potential NEM 1.0 cost savings for going solar. Please reach out to us soon by calling 1-800-356-5686 or sending us a message through our contact form.

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