In order to maximize savings, homeowners in California considering a solar installation need to complete their net metering 2 interconnection application as soon as possible. DroneQuote strongly recommends homeowners choose an installer by March 31 and submit their application through them by April 13, 2023. After this date, their upcoming solar savings will be 75% less in the next 20 years. This decline in solar savings in CA is influenced by the new California net metering policy, NEM 3, which was defined in December 2022. It will come into effect starting April 14, 2023.
However, you don’t have to finish the installation by this time, and you can modify your application even after submitting it.
What is net metering?
Utilities use net metering to calculate their customers’ energy usage and supply. When a solar energy system generates more electricity than its owner uses, the utility will reimburse the owner for the excess generation. However, utilities don’t automatically compensate homeowners for the electricity they send back to the grid— instead, they charge equivalent prices for electricity sent and received on the grid. In April, NEM 2 will be replaced by NEM 3.
In NEM 2, export rates are 1:1 with Time of Use (TOU) rates which means your credits are exchanged at a 1-to-1 rate with the utility based on the current power rate. For example, if you paid 30 cents at 2 pm for 1kWh of power from the utility, you could export 1kWh of power for a 30-cent bill credit at that time. In NEM 3, export rates change hourly with different rates on weekdays and weekends, all of which change monthly. The rate that utilities pay will drop by about 75%.
But thanks to a 20-year grandfather clause, anyone who applies for interconnection by April 14, 2023, will be grandfathered into NEM 2 rates. This allows you to lock in NEM 2 rates for up to two decades. Applying by the deadline guarantees that your application is accepted.
TIMELINE TO LOCKING IN CALIFORNIA NET METERING 2
- March 3, 2023: Decide to go solar and get quotes.
- March 17, 2023: choose an installer and sign your contract
- March 31, 2023: schedule your site visit
- April 14, 2021: Submit your interconnection application
- Three years after your application is submitted: Install your solar energy system
What to do to be grandfathered to net metering 2?
1. Decide to go solar and get quotes
It’s important to determine whether your home is suitable for solar energy before installing lock-in procedures. Certain aspects of your roof, such as age, angle, material, size, and orientation, must be considered when assessing. If you find out to have a good site for solar, it makes sense to go solar and lock in NEM 2. Locking in solar savings from net metering 2 is a good idea if these requirements are met.
Before choosing an installer, gather and compare quotes from multiple solar panel system providers. This may be overwhelming, so you can use some help from DroneQuote’s recommendations. We provide you affordable, trusted, and best-equipped installers in your area.
2. Choose an installer and sign your contract
DroneQuote is here to help you make the right choice: our expert solar consultants can guide you through quotes and answer all your questions. Once you’ve selected an installer, you must sign a contract. Remember that the signed contract’s name should match your utility bill. If your address is 55 Maine St., don’t write 55 Maine Street. Your address and name should match whatever is written on your utility bill. We recommend signing your contract by March 17, 2023, to ensure installers have enough time to prepare and submit all required documents by April 14 deadline.
Consider adding two or three more solar panels to your system. In reality, you use more energy when you go solar, so oversizing now will save you more. Inform your company so they can include it in the application. Adding solar after the April 14, 2023 deadline will prevent you from losing grandfathering to net metering 2. But only if your solar company filed all the necessary documents. Failing to submit documents in time will lose grandfathering if you add a system after the sunset window ends.
3. Schedule a site visit
Once you’ve signed your contract, you’ll need to arrange an on-site visit with your installer – this can be in person or virtually (depending on your installer). During this step, an engineer (not a salesman) will ensure your home is ready for a new solar system. They’ll inspect your roof and electrical panels and decide if they need to be updated or replaced before going solar. Based on the site visit, your installer will create a single line diagram or SLD, a basic electrical diagram of the system, and the scope of the work package- the SLD will be included in your connection application.
Dates for your site visit are more flexible, especially if it is a virtual visit. But we recommend doing so by March 31 in case a last-minute change is needed.
4. Submit your interconnection application
While your installer is the one who actually submits your interconnection request, you must be involved in the process. First, as part of your application, you must read and sign the California Solar Energy Consumer Protection Guidelines. If you plan to oversize your system, you must also sign an oversize certificate stating that you plan to do an electrical upgrade within the following year. Make sure the property address and name are the same on each document. Your installer will need to submit this completed application by April 14.
5. Install your solar energy system
Given that your installer has successfully submitted an interconnection request on time, your installer will complete several tasks. The tasks include:
- Obtaining installation permits.
- Equipment procurement.
- Completing the installation.
- Obtaining permission to operate.
You’ll need to decide how you want to finance your installation. It can be through cash, solar lease, or solar loans. All these steps must be completed within three years of filing the interconnection application to remain compliant with NEM 2 tariffs. These should not be later than April 14, 2026. But the sooner, the better: Once the system is installed and connected, you can save on electricity costs while being reimbursed.
What if you need to upgrade your roof?
If you need additional work like electrical, roofing, new utility meter, trenching, and others, before going solar, you can do it and still keep NEM 2 grandfathering.
Make sure your solar company submits the documents in time. Given that your solar system is installed within three years from the time you submit the necessary documents, you are allowed to take as much time as is necessary (by the terms of your installation agreement) to finish any required improvements before implementing solar energy.
If you have to take down your solar system to fix or substitute your roof, or if you are adding an upper floor on which the panels are located, and you have to take them down and reinstall them on the upper roof, this would only affect grandfathering if you change the size of the system. If the system is installed on a new roof, you may need a solar permit from the city or county.
What cannot change after April 14, 2023?
A lot can happen after an interconnection request is made, including the installation itself. However, if you want to be grandfathered to California net metering 2, there are a few things you won’t be able to customize after April 14, 2023:
- Increase system size: While you can replace equipment if needed, it cannot increase your system size
- Decrease your system by more than 20%: Let’s say you decide not to buy an EV this year-you can still decrease your system as long as it doesn’t exceed 20%.
- Switching generators: While you can add solar batteries after April 14, you will need to make sure the generator capacity stays the same.
- Switching installers: Your installer may choose to subcontract your installation (especially if they are swamped with installs during this busy time), which will be fine. However, if your installer goes out of business and its name no longer appears in the project, you won’t be able to remain grandfathered into California net metering
What can change after April 14, 2023?
After submitting an interconnection request, you can make some changes without jeopardizing your NEM 2 state, including:
- Modernization of switchboards or upgrading electrical panels
- Adding solar batteries
- Changing your financing plan
- Reducing system size by less than 20%
- Changing equipment
- Updating your meter
Go solar with DroneQuote
Installing a solar panel system can be overwhelming to most homeowners. That’s why DroneQuote is here as your solar fiduciary. We will walk you through the whole process of going solar, from getting multiple quotes from respected and trustworthy to choosing an installer and looking over the installation process. We are here to answer your questions about solar. Just sign-up on our website so we can move forward on your solar journey.
To help you get started, you can download DroneQuote’s solar consumer guide or contact us.