If you’re thinking about going solar in CA, you should be getting it. Get it while the gettin’ is good. Get it while you can!
How net metering works
In 2016 when net metering 1.0 was about to transition into 2.0, there was a MAD dash to cross the finish line before you got version 2.0. Now it looks like California will likely stick it to future solar customers by killing the benefit of net metering with version 3.0.
Before going any further, let’s describe net metering and what it does for you. In short, net metering allows solar homes to send excess power back to the grid for which the account holder is credited the retail value. It’s like having the benefit of a battery without having to buy a battery.
Say your cost of electricity is $.25 cents per kilowatt hour, your solar panels produce 30kWh, but your home uses only 15kWh. With net metering 2, you get credited for 15-kilowatt hours at .25 cents per unit. Meaning you’d get a credit of $3.75 on your account.
Then the next day, you use 45 kilowatt hours, but your system only produces 30 kilowatt hours. With net metering, you can use the previous day’s credit of $3.75 to pay for your excess usage.
Net metering 2.0 includes the following:
- A requirement to go onto time-of-use rates, which means the cost of power changes according to the time of day.
- An interconnection fee between $75 and $145 dollars
- Non-bypassable charges – or in other words, a fee levied by the utility for having solar. This usually translates into about $15-20.
- A grandfathered period for 20 years after installation.
- And finally, the feeling of satisfaction knowing you got solar in time and avoided hefty fees.
So what does Net metering 3.0 look like?
The prognosis is not good.
Here’s what net metering version 3.0 is teeing up:
- A reduction of electricity values by up to 75%. In the previous example, where your solar power was worth .25 cents per kilowatt hour, you’d see that value plummet to 6 cents.
- A potential monthly fee of $8 dollars for each kilowatt that makes up your system. An average system in California is about 7.5kW, meaning you’d pay $60 per month just to have solar.
- An increased payback period on your solar investment. Where right now, Californians can anticipate a return on investment between 3-6 years, depending on several factors. Net metering 3 would push that to about 9-12 years.
- The last thing net metering will introduce for many people is the regret of not having acted sooner.
When to go solar?
So, when will it be too late for you if you’re thinking about going solar? Fortunately, it’s not tomorrow or even the day after. If California utilities get their way, these changes would probably take effect at the beginning of quarter two, 2023.
If you want to get net metering 2, for which you’d be grandfathered for 20 years, it’s going to be a race to the finish line. It’s between you and countless other people that will come to this realization later rather than sooner. Fortunately, you can reserve your seat at the table, but it will not depend on when you sign the contract to go solar. Instead, it will depend on when your utility receives AND approves your application. That means you first sign an agreement to move forward and submit your application to the utility, usually several weeks after signing the installation contract.
Six years ago, when net metering switched to 2.0, some upset customers missed the mark. But that’s like getting upset with in-and-out because you arrived during rush hour and your order is taking longer.
For those of you considering solar, now is the time to do it once this ship has sailed. Should things change as proposed, it will not only be a detriment to would-be solar customers but to thousands of solar jobs in California.
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