NEM 1.0 was very easy to understand. When your solar is producing more power in kilowatt-hours (kWh) than your home can consume during the day, you deposit those kWh with PG&E. When the sun goes down, you then withdraw as a credit from the grid those excess kWh your solar has produced. Under NEM 1.0 you were able to deposit/withdraw kWh on an even 1:1 basis. That’s now changing a little bit under NEM 2.0. There are 3 major differences to note under the new NEM 2.0 program:
1. Non-bypassable charges (NBC’s)
This is a little tricky to explain, but think of it like this: Pretend PG&E is a bank much like Wells Fargo. Let’s say today your home didn’t consume all the solar power it made, so you banked some extra kWh into your savings account with PG&E. A rainy day comes along which is going to reduce your solar production considerably. Thankfully you have some extra kWh saved so you withdraw them from the bank. Under NEM 1.0, PG&E let you make those withdrawals on a 1:1 basis with no surcharge (or ATM fee as we’d call it). The NBC’s are in essence a tiny fee that PG&E is going to charge for every kWh you withdraw from the ATM. I know what you’re thinking, that’s BS. But there’s not much we can do about it. The fee is set at a rate of 2.3 cents per kWh. So how’s that going to look? My average client produces over 10,000 kWh of solar power a year; roughly 50% of those kWh are deposited onto the grid and banked for future withdrawals. The result is that the NBC’s under NEM 2.0 will add about $115 to my average client’s annual true-up bill.
2. One-time solar interconnection fee
There was no NEM application or interconnection fee associated with NEM 1.0. However, PG&E will now get to charge its solar customers a one-time application fee of $145. The new fee can either be paid directly by the homeowner or by the homeowner’s solar contractor. At West Coast Solar, we will be covering the cost of the interconnection fee for our customers.
3. Mandatory adoption of Time-Of-Use (TOU) rates
No more Tiered rate plans. New solar customers will have to choose from one of three rate plans post solar.
- E-TOU-A (peak 3-8pm)
- E-TOU-B (peak 4-9pm)
- EV (electric vehicle)
That’s pretty much it. TOU peak periods are set in stone for the next 5 years. If you have an existing system and plan to expand down the road, be careful. Adding more than 10% power to the solar system you have in place now will force your home to graduate from NEM 1.0 to 2.0.