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California Members: NEM3.0 impact on NEM1/2 customers and what to do?

fafrd

Solar Wizard
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[EDIT 1/8/23: since the Final Decision that the CPUC approved last month was very different than their Preliminary Decision from December 2021 when I started this thread, much/most of the information in this post as well as the early pages of this thread are now outdated and incorrect. Rather than attempting to edit all of the information in this lead post, it will be more effective to skip this lead post and jump to the section of the thread where we discuss the Final Decision here; https://diysolarforum.com/threads/c...mers-and-what-to-do.32344/page-10#post-669325

Here s a link to the Final Decision itself: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M498/K526/498526033.PDF

And here is a link to a newer thread where the Final Decision is discussed in more depth:


I’ll insert a few more edits in bold below to correct the most significant changes on the Final Decision versus the Preliminary Decision this post was discussing.]

Since the CPUC is expected to issue it’s ‘decision’ on NEM3.0 this month, I figured I start a thread about the impact of the new NEM3.0 terms and whatever phase-in gets decided for existing NEM1.0 & NEM2.0 customers.

There are many changes being bandied about, but what the utilities are requesting is clear: https://www.solarreviews.com/blog/california-net-metering-changes

I’ll just focus on PG&E’s requested changes since those are the ones that impact me:

80% reduction in export credits

[EDIT: this is confirmed in the Final Decision but even worse - credits at midday a little as 13% of off-peak retail rates.]

Increase in monthly fixed charge from $10.00 to $20.66

[EDIT: Also confirmed in the Final Decision but appears to be $15/month rather than $20/month.]

New monthly ‘grid benefits charge’ of $10.93 per kW of installed solar panels

[EDIT: leveler heads prevailed and this ‘Solar Tax’ has been eliminated from the Final Decision.]

If I look at what that would mean for my 4kW array installed in 2016 when my annual electricity bill was $700/year, I’d be looking at minimum monthly charges of $20.66 + 4 x $10.93 = $64.38 or $773 annually.

Aside from absolutely killing any new installs, these terms being imposed on NEM1.0 like me and even NEM2.0 customers would cause me to decommission my system.

Of these 3 proposed changes, it is the new grid benefits charge which it the most serious.

[EDIT: this was correct and so it is great news that that most serious change has been removed from the Final Decision.]

I can adapt to an 80% reduction in export credit by storing most of my daily production in a battery and consuming it overnight. There will still be some export over summer which won’t be enough to cover the additional grid energy I need during winter, but thus can be compensated for by adding more off-grid panels to charge up the battery during winter months.

The increase in fixed monthly charges from $10.00 to $20.66 is annoying, but having you pay $248 per year to have the grid available to serve peak demand and provide power on overcast days is something I can live with (especially if it translates to a minimum amount of electricity I must pay for annually, as the $120/year minimum charges I pay currently are handled).

But that monthly per kW of installed solar panels is a showstopper. Would rather use my solar power to power an off-grid system to power s much of my load as I can and just pay my utility for whatever electricity I need to cover the remaining gaps.

[EDIT: again, that showstopper has been eliminated from the Final Decision.]

I’ve only invested in a small-size compensation-offset DC-coupled system based on cheap Chinese components this year because I am waiting for the new grandfathering rules to be clear before I invest in a longer-term system upgrade using higher-quality components (as well as to learn about DC-coupled solar, since my NEM1.0 system is AC-coupled based on Microinverters).

I obviously did not read the fine print carefully enough when I entered into my ‘20-year’ NEM1.0 agreement. Had no idea the CPUC could change terms on us whenever they felt the need.

There is also a high likelihood that whatever decision the CPUC puts out this month will result in lawsuits, so the actual rollout of whatever impact is coming will probably be delayed by at least a year if not 2.

But it seems likely that the new NEM3.0 rules are going to be a disincentive for any new domestic solar installs (and an incentive for us grandfathered installs to capture and use most of what we generate).

[EDIT: the Final Decision leaves NEM 1.0 and NEM 2,0 largely untouched. For new installs under NEM 3.0, the other important changes in the Final Decision were approval of PV arrays sized for up to 150% of annual production and continuation of an Annual TrueUp. With an array that size, NEM3.0 installations will just need to include an ESS sized to offset overnight consumption to make the economics pencil out (even with an 87% reduction in export credit for export of excess generation (after the House Battery has been fully-charged).]

Curious is how any other NEM1.0 or NEM2.0 customers plan to react to the new rules as they become clear…

[EDIT: Seems that no reaction by NEM 1.0 and NEM 2.0 customers is needed, though many are considering expanding their NEM 1.0 or NEM 2.0 systems before the NEM 2.0 Sunset Deadline April 2023 to get those system expansions in under NEM 2.0 rather than NEM 3.0….]
 
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Here is my big question.

If I setup my system for "zero export" can I drop NEM altogether and just go back to tiered billing?

That is what is going on in AZ and HI. You are not allowed to export at all on any new installation. So you store it and use it yourself, and you only use some grid power to make up when you don't produce enough. I see no legal way they can charge us more than a non solar customer who uses the same amount of energy from the grid. If we just consume a little and never export, how does that give them any right to charge us more because we are not burdening the grid in any way. I can sort of understand a "convenience fee" for having the grid there and ready to fed us if our system has an issue, such as no sun for a while. But why should we also have to pay more per KWH?

This totally reminds me of the huge "Save water" push they did here a few years ago. I cut my water usage by 40%, and so did many others. Then the water company complained and got the rates hiked up, so that less water cost us about as much as we used to spend before. That seems like total BS to me.

To truly achieve zero export, I will need to be able to store up all of the energy from the DC panels, AND all of the extra power the house does not use from the Enphase system. Figuring my home uses about 1,000 watts continuous, I am only using 10 KWHs while we are all at work and the sun is shining. During that same time, my existing system produces up to 30 KWHs, and the new DC panels will make another 15 KWHs. So total production 45 KWH - 10 KWH means I need to store 35 KWH on a spring day when I don't run the air conditioning. That's not going to happen. I have a total bulk of 36 KWH of battery at 100% cycle. So to do true zero export, I will likely need to also add the consumption CTs to the Enphase system, and have it also programmed to zero export.

At least from the current wording I can find online, My current NEM 2.0 contract will hold up for 20 years from system commissioning. So that give me a bit over 17 years on this contract. Technology may change a lot, and I may be changing out equipment by then. And I will be 72 then. Doubt I will be doing as much of the work myself.
 
Here is my big question.

If I setup my system for "zero export" can I drop NEM altogether and just go back to tiered billing?
I believe all customers are being moved to TOU plans by 2023, but my version of your same question is whether existing NEM systems can be decommissioned to return to ‘non-solar’ standard customer status.

If they impose a monthly or yearly $/kW-of-solar fee that totals up to hundreds of $$$s per year (even on legacy systems), that’s the only option I can see.

‘Break’ your system and tell them you don’t want to fix it and to end your contract.
That is what is going on in AZ and HI. You are not allowed to export at all on any new installation. So you store it and use it yourself, and you only use some grid power to make up when you don't produce enough. I see no legal way they can charge us more than a non solar customer who uses the same amount of energy from the grid.
‘Equity’. Customers with solar are wealthier so they can afford to pay more for electricity.

If we just consume a little and never export, how does that give them any right to charge us more because we are not burdening the grid in any way. I can sort of understand a "convenience fee" for having the grid there and ready to fed us if our system has an issue, such as no sun for a while. But why should we also have to pay more per KWH?
I’m also OK with a minimum ‘connection / availability’ fee and I’ve not seen any proposal that cost per kWh should be higher for solar customers.

It’s the monthly fee for each installed kW of solar panels that’s the real bugaboo.


To truly achieve zero export, I will need to be able to store up all of the energy from the DC panels, AND all of the extra power the house does not use from the Enphase system. Figuring my home uses about 1,000 watts continuous, I am only using 10 KWHs while we are all at work and the sun is shining. During that same time, my existing system produces up to 30 KWHs, and the new DC panels will make another 15 KWHs. So total production 45 KWH - 10 KWH means I need to store 35 KWH on a spring day when I don't run the air conditioning. That's not going to happen. I have a total bulk of 36 KWH of battery at 100% cycle. So to do true zero export, I will likely need to also add the consumption CTs to the Enphase system, and have it also programmed to zero export.
It’s not really storing everything that is critical - it’s not exporting. So what you can’t use yourself (or store) gets wasted.

Taken to the extreme, it means building a system large enough to offset daily consumption in December / January, meaning it could produce ~double daily production in June/July and ~half of potential daily production will be wasted (by MPPTs choking off production).
At least from the current wording I can find online, My current NEM 2.0 contract will hold up for 20 years from system commissioning. So that give me a bit over 17 years on this contract. Technology may change a lot, and I may be changing out equipment by then. And I will be 72 then. Doubt I will be doing as much of the work myself.
For new builds, the most onerous terms they are considering will essentially force any new installs to be zero export hybrids with big batteries and oversized arrays.

With battery costs and panel costs coming down yearly, it may not end up being too bad. More and more (seemingly) non-solar customers are just going to consume less and less grid energy.

So all customers will need to pay more to cover fixed costs (exactly the problem they are trying to address).

A minimum monthly or yearly consumption level imposed on all customers would be the fairest way to attempt to address this but if those minimums are only imposed on the ~one million NEM customers they have baited over the past 10 years (before switching), it will drive NEM customers to just decommission and use their amortized solar hardware to reduce self-consumption..
 
Just found this: https://www.hammondclimatesolutions...lifornias-solar-agreement-net-energy-metering

‘Decisions made during these proceedings will not only affect new solar customers, but existing customers as well as the IOUs have proposed removing grandfathering periods for current customers, essentially forcing all solar customers onto NEM 3.0..

Hopefully there will be an extended phase-in period and in any case, any decision having such an impact on the ~million existing customers is pretty much certain to be slowed down by lawsuits.

But still, it’s a pretty clear indicator of what the utilities are aiming for.

I think about my neighbor who just borrowed $20,000 from the city to pay for his solar system, to be paid back through increased property taxes over the next 20 years.

He thought he’d be ‘locking in’ his electricity rates for the next 20 years and effectively paying for his electricity annually with his increased property taxes rather than to the utility.

With NEM3.0 he’ll have to pay both close to his old electricity bill to the utility (in the form if this new $/kW of solar fee) as well as continuing to pay the city back through increased property taxes.

I’m in a better position since I started earlier and my system is already paid off, but what a sh*t show for new customers who just got suckered into this ‘great deal’.
 
I'm in bay area also.
So the increase in monthly fixed charge from $10.00 to $20.66, is monthly fixed charge for people with solar system only?
 
I'm in bay area also.
So the increase in monthly fixed charge from $10.00 to $20.66, is monthly fixed charge for people with solar system only?
Too early to say if the increased non-refundable monthly charge is only for solar customers or not, but it would surprise me.

There are probably precious few customers who spend less than $240 a year for electricity (~100kWh per month).

But as I stated earlier, the increase in minimum non-refundable fee from $120 per year to $240 per year is not the showstopper (whether only applied to solar customers or not).

It’s the new monthly ‘grid benefits charge’ of $10.93 per kW of installed solar panels which is the deal killer ;and which absolutely will be charged to customers with solar systems only).

I’ve got 4.02kW of solar panels, meaning they will start charging me an additional $44 per month or $527 per year (in addition to the $240 in no refundable charges).

So while I originally installed solar to offset my ~$700 per year electric bill, they now want to charge me $767 per year even if I generate enough solar power to cover my own consumption.

If that grid benefits charge gets imposed on legacy / grandfathered NEM 1.0 customers like me, I’ll have no choice but to ‘decommission’ my grid-tie system to go from being a NEM/solar customer to being a non-solar customer.

I’ll then cobble together a zero-export DC-coupled hybrid system using my used panels to offset as much of my self-consumption as I can.

I’m one of the lucky ones because I built the system myself and can change it as I want.

But those poor folks like my neighbor who payed $20,000 to an installer to build a system to reduce electrical bill to $0 for 20 years (or $10/month for 20 years), they’ll be screwed.

And I do know the contract terms - is it the installer outfits that get screwed (and likely bankrupted) or the end-customer? Depends on the fine print (perhaps this change in terms qualifies as an Act of God ;)).
 
It is funny that Cal is pushing for green energy but then allowing this, some one in the Cal Gov are having their paws greased big time.
Now that the utilities are getting more afternoon energy than they need to offset energy demand for air conditioning (without building any new plants), they have shifted peak TOU to evening hours after the sun has gone down.

In the meantime, solar costs have come down so much that they are now excited about solar and trying to convince regulators that they can do a better job using budgeted subsidies for large solar farms than spreading it out over a plethora of homeowner’s roofs.

I don’t have a problem with changing economics and rooftop subsidies no longer as much sense as they once did.

It’s the change in terms for legacy/grandfathered solar systems underlying what was promised to be a 20-year contract that has me p*ssed off.
 
The two things that annoy me are...

Having to pay more for every kilowatt hour we do use, just because we have solar, while a non solar home pays less.

Having to pay THEM monthly for the panels we already bought and paid for. I don't see any way that one will pass.

If they impose both of those on me, I just may take my home off grid and they won't get any monthly payment.
 
I absolutely agree. Going off grid, preferably "below the radar" is the way to go. As with any monopoly, "public utilities" have found a way to fleece consumers. They pay off regulators, in subtle or unsubtle ways, and they recognize that with highly skilled PR they can dupe the vast majority of consumers. Competition is the only thing which is effective against corruption, so they do everything they can to prevent it. And you can never believe anything they tell you. Ugly.
 
The two things that annoy me are...

[b[Having to pay more for every kilowatt hour we do use[/b], just because we have solar, while a non solar home pays less.
I’ve not seen any proposal that $/kW consumed will be higher for solar customers than non-solar.

Only that the credit we get for exported energy will be gutted to ~25% of cost per kWh consumed.

So you’ll need to export 4 times more kWh per day to stay even with where you are today in terms of export credits.
Having to pay THEM monthly for the panels we already bought and paid for..I don't see any way that one will pass.
This is the showstopper for me. If this monthly solar generation ‘tax’ gets imposed only on NEM customers, I will be decommissioning my NEM system and going back to being a non-NEM customer.

As far as what can ‘pass’ - the CPUC can pass virtually anything they want. Th only thing that may hold them back is the prospect of extended lawsuits delaying implementation and possibly resulting in some terms being imposed on legacy customers being thrown out by the courts.

If they impose both of those on me, I just may take my home off grid and they won't get any monthly payment.

I’ve been comparing the difference between being a non-solar customer with zero export capability to continuing as a NEM customer under these proposed term changes, and here’s how I see it:

1/ monthly grid benefits charge of $10.93 of installed solar panels. This is the most serious term impacting solar customers only and if it gets imposed on legacy NEM1/2 customers, it will make sense for those who can decommission and go to zero export to do so.

2/ Monthly-trueup. The ability to export for credit during summer months when you’ve got more solar generation than you can consume and then consume those credits over winter when you’d solar systems will not generate enough energy to cover consumption was the write point of NEM to start with. If they go to monthly true up it will essentially gut the entire value-proposition of NEM and will give customers a motivation to install larger solar systems to generate enough energy in winter months to cover consumption. Not much difference between being a solar or non-solar customer in this case, since typical billing cycle for non-solar customers is also monthly.

3/ 75% reduction in Export Credit. This will pretty much force solar customers to add a battery holding at least a full night’s worth of energy and a hybrid inverter that can use that stored energy to offset nighttime consumption. Small advantage to being a NEM customer despite this change because you do not need to be concerned with avoiding export during daylight hours and 25% credit is better than 0%.

4/ Increase in minimum monthly fee for consumption from $10.00 ($120 per year) to $20.66 ($248 per year). This is probably going to impact everyone whether NEM or non-NEM/solar, so not really a reason to make a decision one way or the other.

Going truly off-grid may be an option, but since I use gas from PG&E I will have to continue being a customer anyway (not sure if they will allow you to get gas service only without also having to pay the $20.66 minimum monthly electrical charge).

And $240 per year to have the grid available for backup and not have to worry about peak loads or the off-grid inverter going down seems like reasonable insurance…

But if they impose that monthly grid benefits charge on legacy NEM customers, I will be going back to being non-NEM…
 
I knew this day was coming when I could no longer export solar power into the high grid prices all day. Cost of electric has dropped mid day with the increase in utility scale solar power. Cost of overnight electric has increased as the legacy fossil fuel plants are fewer and more costly to run. Had a great run with about eight years of solar. System paid for itself in five years. Still going to get some credits but not at the premium price as it was. My cost will go from about $100 per year to $100 per month. Still lower than it was but the gravy train has ended for me December 10th. SCE customer.
 
Here is one of the most important points of the decision (page 149):

‘Hence, we find it reasonable to require existing residential NEM 1.0 and NEM 2.0 tariff customers to transition to the successor tariff at 15 years to ensure they have a reasonable payback of their investment.’

So the 20-year term has been reduced to 15 years but otherwise terms of NEM1.0 and NEM1.0 should continue.

I believe this should mean that the ‘monthly grid benefits charge’ is not being levied against legacy customers (but I’m not yet sure).
 
I knew this day was coming when I could no longer export solar power into the high grid prices all day. Cost of electric has dropped mid day with the increase in utility scale solar power. Cost of overnight electric has increased as the legacy fossil fuel plants are fewer and more costly to run. Had a great run with about eight years of solar. System paid for itself in five years. Still going to get some credits but not at the premium price as it was. My cost will go from about $100 per year to $100 per month. Still lower than it was but the gravy train has ended for me December 10th. SCE customer.
Looks like you ought to get another 8 years of your ‘run’ before you are impacted by Net Billing (Successor Tariff).,.
 
I wonder how this impacts new homes that have required solar installed.
There are a few terms in the document specific to that…

So the laws mandating solar in new homes require that it be grid-tied?
 
Table 8 on page 127.

Monthly Grid Benefits Charge of $8/kW/month of installed solar for PG&E customers (though this apparently replaces the Monthly Minimum Charge).

Also, calculation of import versus export will move to ‘instantaneous’ and export credits are going to be gutted but annual trueup remains.

This is for new customers under the successor tarrif.

For legacy customers, I believe this means a continuation of the existing $10/month minimum rather than monthly Grid Benefits Charge but I’m still unsure whether the greatly reduced export credit will apply or not (I’m hoping the answer is ‘no’ during the reduced grandfathering period of 15 years from initial connection date).
 
If I look at what that would mean for my 4kW array installed in 2016 when my annual electricity bill was $700/year, I’d be looking at minimum monthly charges of $20.66 + 4 x $10.93 = $64.38 or $773 annually.
Yes and there is going to be plenty of others dismayed at the new reality that has those with solar paying those next door without solar to take their excess!!......maybe a F.B.Cable from Australia to the USA.
 
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Yes and there is going to be plenty of others dismayed at the new reality that has those with solar paying those next door without solar to take their excess!!......may be a F.B.Cable from Australia to the USA.
Don’t know if you saw my recent posts, but the final decision is not as bad as it could have been.

Monthly net benefits charge of $8/kW replaces monthly minimum charge (so $320/year in my case rather than $773).

And total grandfathering reduced from initially-committed 20-years to 15 years (rather than immediate transition of all legacy customers to the new successor tariff, as was being proposed by the utilities).

So this will certainly make it much less attractive for any new customers to adopt grid-tied Solar but the impact on the ~1 million of us that have already installed looks like it will be much less severe than it could have been…
 
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