When you think about going solar, you think about saving money and saving the environment. If you’ve done any research, chances are you might have heard of net metering or its updated version. However, there are still a lot of misconceptions surrounding NEM 2.0 and how it changes the rules. Let’s see whether or not Net Metering 2.0 brings a bright future to solar.
What is Net Metering?
Net Metering allows solar users to send solar energy to a central grid system when their solar panels produce more electricity than needed. Furthermore, the same users can then use energy from the grid if they need it. As an example, you can use the excess summer energy to make up for winter consumption, when installations are less efficient.
The program also compensates people that provide energy to the grid with a 1-to-1 exchange. For every excess kWh you deliver, you receive credit on your electrical bill. This exchange system is perfect for those who want to cover their solar installation costs in no time. So it’s a win-win situation — you save money while also helping the local community.
How Does Net Metering 2.0 Change the Rules?
Under the original Net Metering program, only a limited number of homes were able to join. But with the 2.0 update, there is no longer a restriction on the number of California households. The update also removes metering caps, providing further opportunities for solar households.
However, under the new plan, you no longer get a kWh for every extra you provide to the system. Now you are credited using the retail rate at the time of your credit generation. In other words, let’s say you provide the grid with one kWh late in the afternoon when electricity is more expensive. The value of your next credit will be equal to the value of the kWh you generated that afternoon.
Another controversial change is the cost required to connect to the grid. Now you have to pay a one-time fee of $75 for SCE or $145 for PG&E. While some people don’t like this change, it’s a necessary evil that allows Net Metering 2.0 to provide value for your kWh. For some, Net Metering 2.0 brings a bright future to solar, while for others, it just complicates the rules.
How Does Net Metering 2.0 Affect You?
First of all, people that are already connected to the grid under the original NEM are not forced to update. As long as you don’t exceed the 20 years grandfathering period, you can still take advantage of the 1-to-1 conversion. That is great news for people that aren’t very fond of the new credit system. Those who join the Net Metering 2.0 program will also receive a grandfathering period of 20 years.
Furthermore, switching to 2.0 will affect your energy bill depending on your habits. On the one hand, consuming a lot of energy during rush hours will make you unable to provide any extra to the grid. On the other hand, if you monitor your consumption and make adjustments, you can end up with a lot of leftover credit. The Net Metering 2.0 program is great for those that can easily adapt their energy habits.
The Bottom Line
Overall, it’s easy to see why Net Metering 2.0 is a great update to the original iteration. Not only is it easier to join the system but the new credit rate provides extra money for rush hour energy deposits. All in all, Net Metering 2.0 brings a bright future to solar households. And with a 3.0 version on the horizon, now is the chance to lock in a 20 years NEM 2.0 deal.