The transition to Time-of-Use NEM 3.0 pricing schemes
Homeowners interested in installing solar panels in California under the PD would need to enroll in a TOU tariff, a unique rate plan in which power is costlier during peak grid consumption hours and significantly cheaper at off-peak times.
To put it simply, this provision was included in the PD to encourage solar panel installers to also install battery storage. Without batteries to store extra power, solar owners would experience substantially fewer savings under a TOU rate with high per-kWh prices during the busy nighttime hours.
As can be seen in the Net Metering 3.0, the PD contains a TOU rate from each of the three major utilities. This regulation also gives utilities the leeway to introduce new tariffs that are “significantly differentiated” as per the regulation’s standards. It’s important to note that low-income customers have the option of selecting a chosen rate of TOU.
Price hikes for both capacity and fixed costs per month
In case you thought of fixing the issues with the NEM 3.0 California billing program by installing a battery for your home solar system, the CPUC has some mandatory costs to throw in your face. Fixed costs will rise for SCE and SDG&E customers if they switch to the authorized TOU plans, while PG&E is nearing the completion of a new rate plan that also includes higher fixed charges.
Second, the PD will add $8 to your monthly payment for every kW of solar you have installed. There is no way to lessen this amount, which means that the typical client who installs a 6 kW system on their house will be charged $48 per month. Over a solar system’s 25-year lifespan, it amounts to $14,400 in savings. All CARE rate customers are exempt from the $8/kW fee.
Rewards that only last a short time
For customers of two of the three major utilities, thinking about when will NEM 3.0 go into effect, the CPUC has suggested a short-term system of credits that would create a “glide path” for the solar sector, spreading out the impact of drastic changes like decreased energy credit values and higher fees so that businesses may prepare for them gradually.
In the first four years of the scheme, those who enroll in net billing are eligible for the planned MTCs. Prices for PG&E customers begin at $1.62/kW, while SCE prices begin at $3.59/kW. Since electricity costs in the region are already so high, the Commission argues that it is not necessary to regulate solar profits in a similar way that the other essential services do. As a result, SDG&E customers are not qualified to receive MTCs.
Insights from the utility sector
It is the responsibility of utilities to ensure that all customers have access to clean, cheap electricity. They have been worried about the possibility of cost transfers from solar customers to non-solar consumers, such as those low-income customers who are less financially able to embrace distributed energy resources such as onsite solar and energy storage. The utility company also claims that its plan would encourage homeowners to combine solar panels with battery storage.