What is Net Metering?

Net Metering is the billing mechanism that allows you to earn credits on your bill for electricity your solar system generates. Currently you earn credits at the retail rate, i.e., the rate that the utility would have charged you for electricity you consume during the same period. By generating NEM credits during the middle of the day at peak retail rates and cashing in those credits in the evening at off-peak retail rates, solar system owners are buying low and selling high.

When is Net Metering Expiring?

The first Net Energy Metering Program (NEM 1.0) is designed to sunset when each of the three big utilities reaches 5 percent of their nameplate generation capacity, or July 2017, whichever comes first. With the boom of solar adoption in California, the first utilities are expected to reach their caps in early/mid 2016 (see estimated cap dates below).



Estimated Cap Date


March 2016


August 2016


June 2017

What’s Next for Net Metering?

We’re not sure yet. The CPUC is required to make their final ruling on the successor program (NEM 2.0) by Dec. 31, 2015, but they’re running a little behind, so we’re expecting a ruling by mid-January. PGE, SDGE, and SCE have all provided their proposed successor plans to the CPUC and we’re expecting a proposed ruling sometime in mid-November. The solar industry is fighting, along with our solar lobby CALSEIA, to limit the impact of the changes to the NEM Program. Unfortunately, the utilities are proposing drastic changes that include everything from application fees, generation and transmission fees, demand charges, and distribution upgrade charges, to generation credits at below wholesale rates, e.g., give solar energy credits at $0.05/kWh, but charge customers up to $0.63/kWh!

Can I still qualify for NEM 1.0?

In order to qualify for NEM 1.0 you’ll need to have installed your system and received permission to operate (PTO) from your utility before your utilities cap is reached (see table above). An average installation period from agreement signing to utility permission to operate is roughly 180 days. So, SDG&E customers considering solar should make a decision in November, and PG&E customers should decide by January, in order to get in before NEM 2.0.

How will NEM 2.0 affect my Existing System?

If you’ve already signed a Net Metering Agreement with your utility, then you’re grandfathered into the current NEM 1.0 program for 20 years.

What if I expand my existing solar system that’s on NEM 1.0 after NEM 2.0 goes into effect?

You’re existing system will remain under the NEM 1.0 program for the duration of its 20 year term, unless you expand the system 1kW or 10% of the original size, whichever is greater. If you’re considering a significant system expansion in the near future, now’s the time.

Helpful Links:

PGE NEM Program Tracker:
CPUC NEM Information:
SEIA California NEM 2.0 Party Proposal:
CAL SEIA NEM 2.0 Fact Sheet:

If you have any questions that have not been addressed here, please feel free to reach out to your Project Developer, or contact us.