The California Public Utilities Commission (CPUC) is kicking off 2022 with a planned sunsetting of Net Energy Metering (NEM) 2.0, California’s current net metering program that allows customers to receive credit from their utility for the electricity they produce through their solar system and then export to the grid. NEM 2.0’s proposed replacement program, NEM 3.0, is widely expected to both significantly reduce the financial returns on behind-the-meter solar systems as well as tack on a new flat monthly fee that will be based on the size of the solar system. Although the details of the NEM 3.0 program have not been officially approved, the CPUC issued a draft proposal for the new program in December 2021. A final decision on this proposal is expected to be made by the end of this month.
How significant is the difference between NEM 2.0 & NEM 3.0 in terms of the financial benefits?
According to the California Solar & Storage Association (CALSSA), the difference in export value between NEM 2.0 and NEM 3.0 is likely to be drastic. The chart seen below reports export values, per IOU, under NEM 2.0 and NEM 3.0.
What is the deadline to submit my interconnection application in order to receive NEM 2.0?
The sooner the better. If you submit your application between January/February and April/May, you will be on NEM 2.0, but your eligibility term to stay on NEM 2.0 could be 20 years, or it could be shorter. If the interconnection application is submitted before mid-January, you will receive 20 years of NEM 2.0, though this date could potentially slip to late February. The date after which all new applications go on NEM 3.0 is still currently up in the air and could be anywhere between August 2022 and January 2024.
Are there any other details I need to be aware of to ensure I meet the NEM 2.0 eligibility deadline?
It’s important to keep in mind that the key trigger, for time measuring purposes, will be the date that your interconnection application is submitted. For commercial systems, which require a two-part interconnection application, your initial application date will be counted as the trigger. However, the initial application must be deemed fully “complete” at the time the application is submitted. In other words, your first application cannot have any deficiencies. Therefore, when the initial application is submitted, the specific system design is considered to be final and cannot be “materially changed” (as defined by the utility and Rule 21) at a later date without resubmitting the application and potentially losing eligibility status. Additionally, please also keep in mind that after an application is submitted, there is often some back and forth with the utility to clarify items, but all of those clarifications must be resolved before the application can be deemed “complete” and thereby accepted for purposes of eligibility timing.
Can I lock in NEM 2.0 even if the solar system isn’t installed until after NEM 3.0 has begun?
Yes. After a commercial customer has established eligibility by submitting the initial, “complete” interconnection application on time, they will be able to install the solar system after NEM 3.0 has begun for other customers while still maintaining their eligibility for NEM 2.0. Please note that there may be an installation cutoff point, such as one year after the application has been submitted, with exceptions made for systems that are waiting for utilities to make grid upgrades. If there is an installation cutoff point, it will be specified in the CPUC’s decision later this month.
What should my next steps be to ensure I receive NEM 2.0 for my solar system?
Businesses that are considering installing solar energy systems need to submit their interconnection applications, which must be deemed “complete”, as soon as possible in order to be eligible for NEM 2.0. Sol Rebel has extensive experience successfully helping facility owners and contractors lock-in NEM 2.0 by ensuring that their interconnection applications are free of any deficiencies that could delay the application. Sol Rebel understands that contractors and developers, and their internal engineering teams, are already stretched thin trying to submit countless applications in time. With development engineering experience on over 1 GW of solar energy projects and 1.5 GWh of energy storage projects under its belt, Sol Rebel’s experienced team knows how to efficiently and cost-effectively help you meet your targets with high-quality designs and single line diagrams for your interconnection applications.
Facility owners can rely on Sol Rebel’s several decades of knowledge and experience across the entire solar value chain - from construction management to development engineering to full plan sets - to promptly get their interconnection applications over the finish line. Sol Rebel can handle your preliminary designs, help you evaluate your options, and provide system sizing to ensure your system will meet your needs now and into the future. Since “material modifications” typically include changes to your system size after it is submitted, you want to be sure your project is sized correctly the first time when it is submitted. If you are a facility owner and know you want to build a solar energy system, but don’t want to commit to working with a contractor or EPC just yet, Sol Rebel can work with you to specify your system, and get it designed and into interconnection in a way that will let you bid it out to contractors and EPCs at a later date, after the interconnection is approved.
The bottom line
Don’t wait until it’s too late to lock in NEM 2.0 for your solar energy system to ensure you’re able to maximize the financial benefits of your system! Get in touch with a Sol Rebel representative today to learn more.