Yes, the solar industry is excited for the major victory in NEM 2.0, assuring that customers earn retail-rate payments for their excess energy. This policy has helped increase the amount of solar installed in California. This new policy also requires a transition to time-of-use rates (TOU) for net-metered customers. What is a TOU rate? Utility companies like PG&E, SCE, and SDG&E, will charge different prices during different times of the day. The purpose of this is to attempt to better match real-time energy costs across the grid. Most agricultural and commercial customers are already required to use TOU rates, so no real change there.
Time-of-Use Rates, NEM 2.0, and Solar
HOW DO TOU WORK?
Utility companies have created peak rates which can be anywhere from 10 a.m. to 8 p.m. If you have solar, luckily those are the times that solar systems are producing more electricity. If your solar systems are producing more electricity than you are using during the day, that excess gets sold back to the grid at the peak rate. At night, when your solar isn’t producing, your utility company sends you back the electricity that you didn’t use at a lower rate.
TIP:
It is important to properly factor in TOU to your initial solar system design. With net metering, utilities will most likely NOT pay extra if you lower your bill past zero. That’s why it is important to work with a company that has experience in design and can get you to as close to zero as possible, but not lower than that.