Steady Market Growth Leads to NEM Transition on Expected Timeline

San Francisco—Pacific Gas and Electric today reached its 2409 MW cap for offering the original net metering tariff to customers. Starting tomorrow, PG&E customers will be interconnected under “NEM 2.0.”

“The lead-up to the transition has been smooth,” said CALSEIA Policy Director Brad Heavner. “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.”

The net metering 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 2 cents/kWh. In addition, residential customers will need to be on one of three available time-of-use rate plans.

CALSEIA estimates the combined impact for a typical residential solar customer will be in the neighborhood of ten dollars per month compared to NEM-1. Customers that already have solar will not be subject to the new charges and will continue to have the original net metering 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 continues to offer substantial value to most customers,” added Heavner.

Southern California Edison still has more than 500 MW of capacity available under NEM-1. CALSEIA does not expect the cap to be reached before the deadline for the transition to NEM-2. SCE customers can therefore expect to take service under the current net metering tariff if they interconnect by June 30, 2017.