## C10 Net Energy Metering and Cost Effectiveness

Question

The Energy Commission used only the current net energy metering, known as NEM2, rules to determine cost effectiveness for the onsite PV systems. NEM2 will be up for review by the California Public Utilities Commission (CPUC) in 2019. Did the Energy Commission consider alternatives to the current NEM2 policy?

Answer

Yes, the Energy Commission examined three net energy metering scenarios: (1) the current NEM 2.0 systems; (2) an alternative that significantly reduces bill savings for PV hourly exports to the grid (avoided cost instead of retail cost); and (3) a case where all generation is credited only with avoided costs – a highly unlikely scenario. Under the first two scenarios, all systems were cost effective by large margins. Under the third scenario, PV passed the cost test in 5 of 16 climate zones and narrowly failed in the others.