NEM-3 Proposed Decision

NEM-3 Proposed Decision

‍

California’s utility regulatory agency appears to have sided with the large investor-owned utilities (SDG&E, SCE and PG&E) in a much awaited proposed decision on net energy metering, that if approved this month, will make rooftop solar and customer-owned batteries more expensive and therefore out of reach of working- and middle-class consumers.  

The California Public Utilities Commission (CPUC) proposal for modifying net metering program would make the following changes: 

Solar Fees

·  SDG&E: $8 per kW of installed photovoltaic system plus $16 per month.

· SCE: $8 per kW of installed photovoltaic system plus $12 per month.

· PG&E: $8 per kW of installed photovoltaic system.

· Low-income customers are exempt from the monthly charges. 

· There are no new fees for commercial solar customers.

‍

NEM Credit Value
Export compensation appears to be approximately 5 cents/kWh. The current compensation is around 25-35 cents/kWh for residential customers. There is no transition period, so the full reduction takes effect as soon as NEM-3 is implemented. It has different values for each hour of the day rather than consistent values within time-of-use periods.
 
Rates
Residential customers who are not low-income are required to be on certain rates. These rates include monthly charges of $12 per month for SCE and $16 per months for SDG&E. 
 
Incentives
There is a temporary upfront incentive for residential solar customers known as a Market Transition Credit.

· SCE low-income: $5.25 per kW per month for ten years. For a6 kW system, this is $31 per month.

· SCE non-low-income: $3.59 per kW per month for ten years. For a 6 kW system, this is $21 per month.

· PG&E low-income: $4.36 per kW per month for ten years. For a 6 kW system, this is $26 per month.

· PG&E non-low-income: $1.62 per kW per month for ten years. For a 6 kW system, this is $10 per month.

· There is no incentive for SDG&E.

· There is no incentive for commercial customers.

· A new fund of $150 million per year is created to fund solar for low-income customers.

‍

Retroactive Changes
Getting a solar system installed now will lock you into NEM 2.0 for 20 years. This grandfather clause was supposed to protect you from any reductions in benefits announced in NEM 3.0. In other words, your return on investment (ROI) in solar panels is protected from any future changes in policy. But under NEM-3 this grandfather clause would be reduced to 15 years.

Start Date for NEM-3
The PUC is supposed to make a final decision on January 27,2022. The new tariff will be effective four months after a final decision on May 28, 2022.