Shortly after Pacific Gas and Electric (PG&E) indicated it would do so by month’s end, the California investor-owned utility (IOU) has reached its 2,409 MW cap for offering the original net energy metering (NEM) tariff to customers. Starting today, PG&E solar customers will be interconnected under the state’s successor program, known as NEM 2.0.
“The lead-up to the transition has been smooth. There was not a big surge in interconnections as PG&E approached the cap, so the transition did not come suddenly and catch customers off guard,” notes Brad Heavner, policy director of the California Solar Energy Industries Association (CALSEIA), which led the fight to protect NEM against utility opposition earlier this year. Despite the IOUs’ efforts to dismantle NEM, which they claim subsidizes solar customers and is an unfair burden on non-solar ratepayers, the power companies have said they ultimately support solar in the state.
CALSEIA explains that the NEM successor tariff requires new solar customers to pay a one-time application fee, which is $145 for PG&E, and increases the assessment of charges for public purpose programs. The latter is the equivalent of reducing the value of NEM credits by approximately $0.02/kWh. In addition, residential customers will need to be on one of three available time-of-use rate plans.
The solar organization estimates the combined impact for a typical residential solar customer will be in the neighborhood of $10.00 per month compared to NEM 1.0. Notably, as part of the new rules approved earlier this year, customers who already have solar will not be subject to the new charges and will continue to have the original NEM tariff for the first 20 years of operation of their solar systems.
“The industry should be prepared for some hesitation in the market as the new tariff sinks in, but I expect it to be short-lived because NEM 2.0 continues to offer substantial value to most customers,” adds Heavner.
PG&E is now the second of the state’s three IOUs to enter NEM 2.0, following San Diego Gas & Electric’s switch to the successor program in June. According to CALSEIA, Southern California Edison (SCE) still has more than 500 MW of capacity available under NEM 1.0, and the organization does not expect that utility’s allotted cap to be reached before the deadline for the transition to NEM 2.0; therefore, SCE customers can expect to take service under the NEM 1.0 tariff if they interconnect by June 30, 2017.