What is CA Net Energy Metering?

California New Energy Metering (NEM) is a foundation that was created in order to facilitate storing excess solar energy in the electrical grid.
Essentially, most solar systems are also tied into the electrical grid. Your solar system will supply most of your home’s power; any power it doesn’t supply will be fed to your home through the electrical grid. The amount of power you use from the electrical will determine what your monthly utility bills look like.

Many times, however, you may end up generating more solar power than you’ll consume in a day. This is fed back into the grid; the energy can be used as credits for your bill, helping to reduce the amount of money you owe on your bill. Many utility companies have moved to a 12-month billing cycle over a monthly billing cycle for this reason; this way, you’ll only need to pay the amount you actually owe. In addition, if you make more energy than you consume—enough that it exceeds what you would’ve had to pay on your electrical bill—then you will even receive a Net Surplus Compensation (NSC) payment.
NEM itself was designed to protect the investments of homeowners from utility companies. It protects against rates and fees rising to prevent you from gaining credits, and has had very few changes over the years.

Very few changes have been made to NEM over the years; however, at the end of 2022, the California Public Utility Commission (CPUC) voted to approve NEM 3.0, which means that tariffs will be increased for solar energy owners. That said, anyone who already has their system installed—or gets their system installed before April 14th, the end of the 120-day “sunset period” for NEM 2.0—will be able to take advantage of the benefits of the better conditions of NEM 2.0. If you’ve been considering installing solar panels, then this may be a good opportunity to do so, while you’ll be able to lock in better benefits for the next 20 years. Reach out to us to learn more today.

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