Net Energy Metering (NEM)

Net Energy Metering, or NEM, tracks energy flow in both directions: out to the grid from your renewable system, and in to your home or business from the grid. That way, you’ll only be billed for what you use. If your system generates more than you use, for example in the winter when you’re not using air conditioning, you can even earn generation credits to offset any eligible charges.

Once activated for NEM, your meter moderates a two-way conversation between your system and ours. Here’s how it works:

When your system isn’t generating energy, or less energy than you need, the meter registers the electricity you’re using from the grid. If your self-generating renewable system overgenerates and feeds excess energy into the grid, we track and bank credit you earn. You can apply any previously banked credit to your bill total.

Your NEM Bill

Speaking of your bill, you’ll notice some differences once you become an NEM customer. Download the NEM Bill Guide

This option is for multi-unit customers, like apartment complexes and office buildings. One system, multiple users. Think of it like a community garden where everyone shares the harvest: each tenant gets allocated a percent of the generation credit. We do the math and distribute the generation to each tenant’s monthly bill. VNM customer bills differ from regular NEM customer bills. There are a few other differences as well. Contact our Customer Generation Team at [email protected] to learn more and see if your building qualifies. Learn More >

If you have a property or business that uses multiple meters, and a solar system installed on one or more of your structures, let us do the math. We’ll apply your renewable generation to your total energy usage for a simpler bill and single balance. Contact our Customer Generation Team at [email protected] to see if you qualify.

If you’re considering integrating energy battery storage into your solar system, it’s important to understand how your battery works with Net Energy Metering (NEM). We’re here to help you stay informed, so you can make the right choices for your system and lifestyle.
As Southern Californians increasingly integrate energy storage batteries into their renewable systems, there have been some changes to how those systems are metered and billed. Statewide protocols have been enacted to cap the number of generation credits you can earn each month, based on your system’s size and other factors like climate. 
Credit caps vary by system size and climate. If you use a solar storage battery at your home or business, we encourage you to program it accordingly. Learn More

What’s the best way to choose a renewable system?

If you’re considering a renewable system, there are a number of steps you should take in making your decision. Often, the most cost-effective things you can do to reach your efficiency goals are simple, inexpensive upgrades and small changes to your energy-use habits. If you still want to install a renewable system, educate yourself on your options. There are a number of different types of solar and other self-generating systems available.


How much does a solar system and installation cost?

Solar system and installation costs vary according to size, location, and contractor. You can use the California Solar Initiative’s Solar Calculator to estimate your costs and get a system size recommendation. You’ll also want to get quotes from multiple contractors. Your contractor can help you identify placement and other details of which system you’ll ultimately install. To get started, check out our Step-by-Step guide.


How often do I need to replace my system?

A quality renewable system, if properly installed, should provide you with decades of self-generated energy. Since new technology develops rapidly, you may opt to update or upgrade your system over time. You’ll also want to properly maintain your system to maximize its lifespan.


What’s involved in maintaining my system?

For most standard rooftop solar systems, an annual inspection and cleaning by a qualified professional is sufficient to maintain your system and keep it operating at optimal capacity. Talk to your contractor about maintenance package options when you install.


Can I go renewable without installing a system?

Yes. If you’d like renewable energy at home, but installation of a system doesn’t make sense for you, consider our EcoChoiceTM option. EcoChoice allows you to “subscribe” to renewable energy through SDG&E. Learn More >


What is Net Energy Metering?

When you install a renewable energy system at your home or business, you become a Net Energy Metering, or NEM, customer. NEM measures your energy use in both directions: it tells us both your system’s excess output (surplus energy you sell to us for generation credits) and your home or business intake from the grid (energy you need to supplement your system).

If you generate more energy than you use, you can earn generation credits. These can be applied to your account to use on a later bill when you do owe a balance, perhaps on cloudier months when your system doesn’t get as much sunlight, or when it’s hot out and you’re using more energy to run your AC. At the end of every 12-month cycle, you’ll have a “true-up” bill. This is when you’ll need to pay off any outstanding balance.


Does NEM track the energy my renewable system generates?

NEM doesn’t track all of the energy your renewable system generates: only the surplus energy that flows out of your home or business and into the electric grid. We cannot track or advise how much overall energy your system produces.


What’s Time of Use?

Throughout California, customers are switching to Time-of-Use pricing plans. These pricing plans give you more choice and control for managing your energy use. With Time of Use, it matters not only how much energy you use but also when you use it. 

Time-of-Use prices are generally the highest in the summer, during daylight hours. Why? Because that's when there isn't enough clean energy to meet peak demand and we have to use other energy sources. If you can wait to run your clothes dryer until evening hours, you’ll pay less for that energy than you would at, say, noon. Because Time of Use incentivizes you to shift energy off peak, it helps balance demand, saves energy, and decreases the need for conventional power sources. You can choose the Time-of-Use pricing plan that’s best for you household by logging into My Account and select your pricing plan.


What are my pricing plan options?

We offer multiple Time-of-Use pricing plans for NEM customers. Log in to My Account and select your pricing plan.


How do you calculate my NEM generation credits?

We calculate your NEM generation credits according to the surplus energy your renewable system feeds back into the grid. We’ll credit the retail value of that energy into your monthly bill, to offset your bill total. If you have more credits than you owe, your credits will roll over to the following month, until your annual “true-up” bill.


What is “Permission to Operate”?

“Permission to Operate,” or PTO, simply refers to the date that you’ll start being a Net Energy Metering (NEM) customer. This means you’ve been approved and activated to start NEM on a specific date, going forward.


What is Virtual Net Metering?

Virtual Net Metering (VNM) is similar to Net Energy Metering (NEM), but involves several customers sharing a single renewable energy system. This option is most applicable to properties with multiple tenants, like apartment complexes and office buildings.

For example: If you are a tenant in a four-unit apartment building, and your landlord installs a solar energy system with VNM, you would be allocated a percentage of that system’s output, and – if that system generates more energy than your building needs – the same percentage of its generation credits. The building’s usage would all be calculated through a single meter, but you’d still receive an individual bill.


What is NEM Aggregation?

NEM Aggregation is designed for customers with renewable systems on multimetered properties. It allows you to “aggregate” your energy production and consumption into one balance, so you can offset your non-renewable energy use with your renewable energy surplus.

A good example is a small farm: If the farmhouse is equipped with solar panels that generate surplus energy – that is, more than the farmhouse needs – that surplus can be used to offset the energy costs incurred by a water pump used for irrigation on another area of the property.


I’m producing excess energy. Why do I still owe on my bill?

There are a few reasons you’ll still owe a balance on your bill, even after installing a renewable energy system like solar.

The most common reason is that your self-generating system is producing less energy than you’re using. When this happens, any generation credits you earn when your system overproduces may not completely offset the energy you use from the grid – for example at night when solar panels aren’t creating energy. If you’re using more than your system creates, you’ll still owe for the difference.

You should also know that there are certain fixed charges on your bill that are separate from energy charges. These include operating costs, fees and taxes. We charge these to build and maintain the infrastructure that keeps your electricity, and the entire grid, running smoothly and reliably, and to make updates and repairs when necessary.


Does my excess energy roll over or do I lose it?

Energy credits will be carried forward from month to month until the end of each 12-month cycle, at which point your bill will be “trued up” to determine the balance due, and any unused credits will not be carried forward. To maximize your credits, you will want to monitor your usage throughout the year.


Why can’t I be reimbursed for my leftover generation credits at my true-up?

In some cases, with specific types of credits, you may be eligible for reimbursement for credits that will not roll over into the next 12-month cycle. We invite you to contact customer service to inquire if you’re eligible for any reimbursements.


How do you decide what my excess energy is worth?

When your renewable system exports excess energy into the grid, we compensate you with generation credits at the wholesale market value of that energy.

The energy you buy from us is priced at the retail market value, which is typically higher than wholesale, although the pricing of both fluctuate with the market over time.


Can I change my rate back to my previous one?

Once you choose a pricing plan, you’ll be billed through that plan for a 12-month cycle. After 12 months, you may opt for a different plan.


Why do I have to connect to the grid if I have a self-generating system?

Even if you invest in a self-generating system, you may not always have enough power for your home or business. A solar-panel system, for example, doesn’t generate electricity at night, when the sun is down. During that time, you’ll need the grid to supplement your renewable system.

Being interconnected also allows you to export any excess energy you generate to the grid and earn generation credits that can be applied to your statement balance. This will offset your costs when you do need supplemental energy.


Can you recommend a contractor?

We don’t endorse or recommend specific contractors for any job, but we do offer tips and resources to help you find a qualified contractor in your area. Check out our Contractor Checklist or Search by ZIP Code for a licensed contractor.


Are there government subsidies or rebates for going renewable?

Are there government subsidies or rebates for going renewable? There are a number of rebates and incentives for installing a renewable energy system. You may also qualify for a tax incentive or subsidy. Find more resources here.


I don’t own my home but want to go solar. Can I?

If you’re a renter or live in a home you don’t own, you may still be able to participate in renewable energy. Talk to your landlord about Virtual Net Metering (VNM), or check out the EcoChoice™ option, which allows you to “subscribe” to renewable energy through your account with us.


My home doesn’t have a rooftop that will accommodate solar but I want to use green energy. What are my options?

If your home isn’t a good candidate for a solar – or other renewable – system, you can still subscribe to the EcoChoice™ option. With EcoChoice, you’ll pay an additional fee to know that you’re receiving your energy from green-energy sources.


What is a pricing plan versus a rate?

A pricing plan is just that: a plan that prices your energy according to a set of rules. Instead of a flat “rate” per kw, our pricing plans are structured according to Time of Use. Prices change according to time of day and year, based on peak demand. You can learn all about Time of Use here.


Are there NEM pricing plans for low-income customers?

Many low-income households qualify for subsidized NEM billing through the California Alternative Rates for Energy, or CARE program, and customers with electrical medical equipment may need a Medical Baseline plan with NEM.


Why do you do an annual “True-Up” bill for NEM customers?

At the end of each 12-month cycle for NEM customers, we send an annual “true-up” statement. This is when any outstanding balance you owe for the year needs to be paid.

Because your NEM bill balance can be positive or negative month to month, depending on your usage and the output of your renewable system, the “true-up” creates a simple way to zero out your balance annually.


Can I go renewable if I’m a medical baseline customer?

If you use life-saving electrical medical equipment at home, you know that a reliable source of power is critical. That’s why it’s important to stay connected to the grid if you decide to install a solar or other renewable energy system. When the sun sets and your system isn’t producing electricity, you’ll always have energy flowing to keep your equipment running when you need it.


Can I get a Medical Baseline pricing plan with NEM?

We offer NEM pricing plans that are compatible with Medical Baseline, so you can keep your allocation and the necessary measures can be taken to keep your health equipment running. Call us to discuss your options when you decide to go renewable.

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