Understanding the Transition from Net Energy Metering (NEM) to Net Bill Tarriff (NBT)
The California solar energy sector underwent a significant transformation as Net Energy Metering (NEM) gave way to Net Billing Tariff (NBT). Understanding the implications of these changes was crucial for making informed decisions about solar investments. Here's a comprehensive overview for the community:
The Previous Framework (NEM 2.0):
Under NEM 2.0, credits were received for surplus solar energy equivalent to the grid's electricity purchasing cost.
This structure made solar investments financially appealing for many of our stakeholders.
The Current Landscape (Net Billing Tariff, NBT):
With the transition to NBT, compensation for excess solar energy has notably decreased, approximately $0.05 per kWh, compared to the previous variable rate.
This adjustment presents financial challenges, especially for entities generating surplus energy during off-peak hours while consuming energy during peak times.
Key Considerations:
NEM 2.0 is now obsolete, and all new solar projects initiated after February 14, 2024, fall under the NBT regime.
The reduced export value translates to lower earnings for selling energy back to the grid.
Real-time netting is now in place, tracking energy consumption and generation, potentially impacting cost savings.
Finding Opportunity Amidst Change:
Despite the revised tariff, integrating battery storage can optimize solar investments. Storage facilitates the use of solar energy during peak hours when NBT rates are higher, maximizing savings.
Additionally, storage solutions mitigate demand charges, further reducing overall utility expenses. Moreover, they enhance grid resilience, serving as backup during outages.
Actionable Steps:
Consider incorporating storage as part of solar projects to enhance long-term returns under the NBT framework.
Conduct a thorough analysis of energy consumption patterns. Businesses with consistent year-round usage, particularly during evening peaks, stand to benefit the most from solar and storage integration.
Consult with JKB Energy. Our expertise in designing tailored systems ensures optimal financial benefits aligned with unique requirements.
Additional Insights:
The avoided cost value will be subject to updates every two years.
Seasonal businesses may still witness positive returns, albeit potentially lower than year-round operations.
In conclusion, staying informed and proactive is paramount in navigating California's evolving solar landscape. Together, let's leverage renewable energy solutions for a sustainable future.
For inquiries and consultations, we invite our community members to reach out to Rich Borba, rich@jkbenergy.com. Empower your journey towards sustainable energy practices today!