The Virtual Net Energy Metering program (VNEM) is made for buildings with many units, like apartments. If a building makes more solar energy than it needs, the extra energy goes back into the power grid automatically. In the past, rules have made sure that people who invest in solar panels get money back. Even in apartment buildings, families can save on electricity, and landlords can also benefit from solar power. But if VNEM 3.0 is passed, all of this would change.

The advantages of solar energy would end up in the hands of the utility companies instead of the solar panel consumer. This could make solar energy less appealing, create money problems for those with less income, and affect California’s leadership in solar energy.

New rules that were proposed on August 4 by the CPUC could make it too expensive for people living in apartment buildings, farms, and schools to get benefits from rooftop solar panels and battery storage. These new rules might stop apartment buildings from using the energy they make from solar panels on their roofs, unless they sell it to the electric company and then buy it back, which would cost more money.

The VNEM ruling represents a reconsideration of California’s net metering (NEM) program. The regulatory process was initiated due to the Commission’s commitment to periodically assess the program’s effectiveness. As a result of this assessment, the tariff structure and other components of the program underwent thorough evaluation. Anticipated to take place on September 21, 2023, the VNEM ruling marks a subsequent phase of intervention in the established NEM program.

Its primary objective is to fortify and refine the focus of solar energy within California. Additional insights into the reasons behind this development can be found in Decision (D.) 16-01-044.

California’s rooftop solar market has already taken heavy blows to demand in recent months as Net Energy Metering (NEM) 3.0 was implemented, a move that dramatically slashed compensation rates for exporting excess solar production to the grid. Despite warnings from the industry, environmentalists, and California residents that the move would be a devastating blow to residential solar, the California Public Utilities Commission (CPUC) moved forward with NEM 3.0, gutting the value of sending excess local solar generation to the grid. Unfortunately, without influence from decision makers and California constituents and solar companies, there is a likely chance that solar power will continue to suffer with the implementation of VNEM.

The CPUC disposed of some of the issues in the original scoping memo by adopting D.22-12-056 in December 2022. This decision showed the net billing tariff (NBT) as a successor to NEM 2.0 for customers who submit an interconnection application on or after April 15, 2023. It does not affect customers who submitted a NEM interconnection application by April 14, 2023. Please see the NBT decision webpage for information about the steps in the proceedings leading to the decision.

The upcoming ruling from the CPUC is set to happen on September 21, 2023. What has happened so far this year is as follows:

• A ruling was issued on February 1, 2023, to bring attention to a workshop and invite responses to questions about consumer protections and the planned evaluation of the net billing tariff.
• An online workshop was held on February 8, 2023, to obtain information on the current VNEM tariff and NEMA sub-tariff and to discuss how to synchronize them with related statutes and California climate policies and objectives (workshop slides | workshop recording).
• A ruling was issued on February 28, 2023, to invite responses to questions about virtual NEM, NEM aggregation, and fuel cell resources.
• A ruling was issued on April 3, 2023, to invite responses to questions about the implementation of Public Utilities Code Section 769.2 per AB 2143.
• A proposed decision was issued on August 2, 2023, along with a fact sheet, of the virtual NEM tariff, the NEM aggregation sub-tariff, protections for customers taking service under NEM or net billing tariffs, the future NBT evaluation, the NEM fuel cell tariff, and implementation of Public Utilities Code Section 769.2. Comments and reply comments by parties to R.20-08-020 are due on August 22 and August 28, respectively.

The upcoming decision will be talked about during the CPUC Meeting on September 21st. People in California are encouraged to join either in person or online and can share their thoughts online before the meeting.

If the VNEM 3.0 vote that’s being discussed gets accepted, it is believed there will be a period of time called a “sunset period.” This means that upon the finalization of the decision on September 21, Californians can expect a 90-day grace period extending until December 21 to make investments in solar systems and grandfather in their benefits.

To secure your eligibility under the previous regulations, it’s essential to submit your final application to any utility interconnection within this 90-day window before December 21, 2023. It’s worth noting that these rulings can be subject to some uncertainty, and there’s a chance that if the CPUC enacts this ruling, they might not uphold the grandfathering clause. Therefore, we strongly advise individuals interested in harnessing the financial and economic advantages of solar energy to take action now.

Take action immediately. Feel free to explore the CPUC website for further details regarding the processing stages, informal and formal participation methods, submitting public comments, taking part in hearings, and reaching out to CPUC decision makers.

To receive updates about events related to R.20-08-020, enroll in the proceeding’s mailing list by clicking here.