Energy News For The Smart Homeowner

How to get the most out of your solar panels with NEM 2.0


The NEM 2.0 switch-over will most likely take effect in mid-late December. When we look at the real-world effects it will have on solar homeowners, the main upshot is a need for even more home energy IQ.


Although PG&E got a few minor changes through the Public Utilities Commission, solar is still far less costly than utility power.

Here are the most relevant changes that will take effect with NEM 2.0:

1. The generator size is no longer limited to 1 MW or under. As long as the generator is sized to meet part or all of the customer's annual load it may qualify. Customers with generators sized 1 MW or less will pay a standard interconnection fee based on costs associated with interconnecting their solar system. Customers with generators greater than 1 MW will pay all interconnection costs. What does this mean? Even even large electricity users can now offset their usage with solar.

2. The interconnection fee for residential systems will be in the $75–100 range. Single Family Affordable Solar Housing (SASH) customers who interconnect under the NEM successor tariff will not pay any fee for interconnection.

3. Customers will be billed for State Mandated Non-Bypassable Charges (NBCs) based on each kWh of electricity consumed from the grid. These NBC charges include:

Public Purpose Program (PPP),
Nuclear Decommissioning (ND),
DWR Bond Charge (DWR Bond), and
Competition Transition Charge (CTC).

The total costs of these programs are expected to be 2–3¢ per kiloWatt-hour. If you use 500 kWh per month, this will result in a $10–15 charge. If you use 1,000 kWh, the charge will be $20–30.

4. All NEM Successor customers must be on time-of-use (TOU) rates. You will be unable to stay on . The new TOU rates are ETOU-A and ETOU-B. ETOU-A has a peak period every weekday between 3–8 PM during summer, June 1 through September 30. The difference between the peak and off-peak rate is negligible during the rest of the year.

5. Customers will remain on the NEM Successor tariff (NEM 2.0) for 20 years from the year of the original approval. Any customer that switches from the existing NEM tariff to the NEM successor tariff will be able to use the NEM successor tariff until the expiration of 20 years from the original year of the approval from PG&E to interconnection and operate their system.

6. NEM 2.0 requires high quality system components. A warranty of at least 10 years must be provided on all components and their installation. In appropriate circumstances, the interconnection request may rely on manufacturers' warranties for components and separate contractors' warranties for workmanship (i.e., installation).

Those are the main differences. NEM 2.0 is less advantageous to some degree, but does not change the basic fact that solar is a far better and more economical way to power your household than the local utility.

For more information on NEM 2.0, see our blog post here.


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