SCE Net Metering

Major changes in the solar industry are coming soon to Southern California Edison electric residential customers who use solar to power their homes.  The system that SCE uses for billing solar customers, Net Metering 1.0, will be phased out in July 2017 for Net Metering 2.0, which will make it so that solar producers will no longer receive full retail credit rates for the extra electricity they send back to the grid during the day.  This significantly removes the financial incentive of solar, so getting in the program before it transitions will ensure that homeowners get the maximum energy and payback from their solar system.

How does SCE Net Metering 1.0 Work?

Net energy metering is the billing system used by utilities for solar customers.  How it works is when your solar system creates more power than you are using during the day, the extra power is sent back to the grid to be used by other homes.  You receive credit for that power you are sending out, which, under Net Metering 1.0, is the full retail price you pay for power, so when you aren’t producing at night, the power you are receiving from the grid is already paid for by your credit, leaving your bill and energy changes at zero.  The solar energy credits even carry over month-to-month such that you can use the extra power you produced in the sunny months in the cloudy months when solar power is slightly more scarce.  The whole point of Net Metering 1.0 is that solar homeowners can reach “net zero” electricity costs, producing enough power with their solar so that they do not have to pay any money to the power company.

Net Metering 1.0 Vs 2.0

With Net Metering 1.0, you receive full retail credit for the extra power you use, no matter what time of day you produce it.   So if you produce extra power all day, and sell it back at 28 cents a kilowatt, you will buy back your power at night for the same price, at 28 cents a kilowatt.  This is what produces the “net zero” effect.

With Net Metering 2.0, the price of electricity you send to and take away from the utility grid will change based on the time of day it is, referred to as a “time-of-use” (TOU) rate structure.  So when you are producing power at peak times, like during the day, you will sell that power back at a lower rate than if you were producing it at non-peak hours, like at night.  Similarly, when you are buying back power from the utility it will be more expensive at peak use times.

So with residential solar customers how it will work is that you will be paid less for your extra power you produce during the day, and pay more for the power you are using at night.  You might receive 28 cents a kilowatt in credit for your peak production time during the day, but will be charged 33 cents a kilowatt to use that same power at night.  So, at the end of the day, this rate plan eliminates the ability to “zero out” your electric bill. 

Other non-bypassable charges will be applied to Net Metering 2.0 customers as well.  NEM 2.0 solar customers will receive charges that support grid maintenance and help fund low-income programs, in addition to a new one-time, nonrefundable interconnection fee. 

So SCE homeowners who have been on the fence about solar for their energy consumption should know that getting installed before the 5% cap or July 2017 cutoff date will maximize their savings and solar investment while also allowing them to bypass a ton of cost and charges.  So don’t wait, because while solar will still be financially beneficial under NEM 2.0, those grandfathered into NEM 1.0 will enjoy a “net zero” bill, and the full financial benefits of solar, for the rest of their days.

So if you live in SCE territory and have been thinking about going solar for your energy consumption, contact us today to get solar panels installed before Net Metering changes. ​Residential solar and solar systems in general are the change in renewable energy. Install solar today for maximum solar savings!