The Financial Impact of Net Energy Metering 2.0 Policy

Examining the Effects of Non-Bypassable Charges with Load Profiles and Systems Designed in Aurora

Net Energy Metering (NEM) 2.0 is now the official utility rate policy for solar customers in California – but few people truly understand what it means for the returns of residential solar installations. For most solar professionals looking to design the highest return systems for their customers, the general rule of thumb has been to maximize energy production and offset about 95% of a household’s energy usage. However, the introduction of mandatory Time of Use rates and non-bypassable charges is changing that design paradigm, and will force the industry to adapt accordingly.

In this case study, we look at over 600 projects designed in Aurora with uploaded Green Button Data to see how the returns on solar change between NEM 1.0 to NEM 2.0. We also ran a parametric study with over 900,000 designs to analyze how solar installers should change their design practices to account for NEM 2.0. We discover that most of what has been said about NEM 2.0 is wrong, and it is critical for solar professionals to learn correct design best practices in order to do what is best for their customers. Our surprising results highlight how NEM 2.0 is both a great challenge, and a great opportunity for the solar community.

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