Article Author: Meghan Harmon, Director of Marketing & Media
What is NEM?
Net Energy Metering (NEM) is an important component in the rise of solar system installations. It allows owners of residential and commercial solar systems to facilitate and monitor their energy production. Over the course of 12 months, the solar customer will only pay for the total energy pulled from the electric grid. If their system ends up generating more power than they use, they receive a credit from PG&E. Each of these customers receives both an annual statement and a monthly bill stating their total power usage.
Understanding How it Works
Your electric meter is “bidirectional”. Meaning, your electric meter will run backward as it measures the energy you produce from your solar system. It also will run forward each time you pull electricity from the grid. PG&E will take your “net” energy difference and either add a credit to your account or bill you for using more energy than you produced. As stated earlier, you will receive an annual and a monthly bill statement. It is important to know how to read both, so that you know if you’ve accrued any charges you weren’t expecting. Monitoring your system on a regular basis allows you to catch any irregularities and avoid costly repairs or expenses.
Your Billing Statements
The first page of your monthly energy bill displays a snapshot of your bill at the top under “Account Summary”. This section serves as an overview of total monthly electric and gas usage. It states the total energy charges due to date. Just below this is your NEM Account Summary, which estimates your total NEM charges for the year and to date. Since you are using NEM billing, you have the option to either pay some or all of the charges due. The total amount of energy used beyond what you have produced will not be due until you receive your annual “True Up” bill.
As a solar owner, you are not required to pay your energy bill on a monthly basis. However, it is important that you check each month to ensure your solar generation is optimum. When first going solar, is is common for users to overcompensate for their new system by using more power than normal. This account information is available to you each month. Meaning, estimating your annual bill based on your charges to date should be easy. If you have a negative balance, that means you have been awarded a credit to apply to the next month. You may not use net energy credits to pay for “non-energy” charges, or any other account other than your NEM billing agreement.
Your annual bill is simplified and displays a sum of all of monthly credits & charges. It shows a total amount due over what is known as a relevant period (last 12 months). If the calculation states that you owe money, that amount is due by the date stated. An awarded credit is not carried over to the next month because it is outside that relevant period. However, you are compensated for the energy you produced if you are a PG&E customer through Net Surplus Compensation program. “California State Assembly Bill 920 authorized payments to be made to NEM customers who generate more electricity than they use over their 12-month billing cycle” (PG&E.com).
You should monitor your usage when the date of your True-Up approaches for a number of reasons. Firstly, you want to make sure that you prepare to make any payments you may owe. Additionally, you may choose to adjust how much power you use to accommodate your outgoing balance. You are only awarded .03-.05 cents per kW/h by PG&E if you chose to redeem your credit during this time. We recommend our customers just live more comfortably in the last month or two of their billing cycle to adjust the balance to zero. Whatever you choose, we hope that all our customers are satisfied with their year end balance.
You now have the information to make sure you are awarded a credit by the time your TrueUp bill comes around. If you are happy with your bill and can testify to our services here at Solar Negotiators, share your story on one of our review sites!