Why did architect Drew Hubbell, a 20 year veteran in green building, decide to install solar panels on his home now? “Since my family is very careful in conserving energy, the payback for installing photovoltaic panels on our home was pretty long, and did not make sense.” However, three factors changed his mind: the rising cost of electricity, the 5% Net Metering rule coming into effect, and the federal tax rebate expiring in 2016.
In 2013, the California Legislature passed AB 327, a large energy bill. One part of the law deals with Net Metering. (Net Metering is the regulation that allows solar customers to connect with the utility’s grid and receive full retail credit for power that they make during the day for use at night.) Here’s what AB327 did to Net Metering:
- AB 327 continues the current Net Metering laws on the books for all solar customers that go solar NOW until 5% of all power is from solar (at peak). In San Diego that 607 megawatts. We should hit this anytime between late 2015 and end of 2016.
- The CPUC grandfathered in the rules for the early adopters for 20 years.
- AB 327 requires that all people who go solar AFTER 5% of all power is from solar go on a new set of Net Metering regulations.
- AB 327 states that the CPUC must draw up the new Net Metering rules by the end of 2015.
In summary, when SDG&E reaches 5% of all power from solar, there will be a line drawn in the sand: the early adopters who went solar under 5% will get one set of rules and everyone else who goes solar after 5% will get a new set of rules. We do not think the new set of rules will be as beneficial. Solar will always be a great investment, but we believe the smartest choice is to go solar before the rules change when we hit the 5% threshold. Since solar installations have been doubling every year, most people expect we will reach the cap in late 2015 or early 2016. Currently we are at 2.9%. Also expiring in 2016 is the 30% Federal Tax Credit. For those who want to stay in the know, here is how to track the progress: www.sdge.com/clean-energy/net-energy-metering/overview-nem-cap
The current net Metering solar regulations were originally created as a subsidy to early adopters. This allows solar customers to receive full retail credit for the power they make during the day for resale use at night. The zero down loan payment may even be lower than one’s current SDG&E bill, which means you may pay less for your solar bill than you do for your SDG&E bill, which may not be the case after we hit the 5% threshold.
Thanks to Wende Pfahler at New Day Solar for technical info www.newdaysolar.com