In a previous blog post titled Update on Assembly Bill 327 from February 26, 2014, Cenergy reported on the CPUC’s proposed decision to establish a 20-year transition period for existing net energy metering (NEM) customers to continue to receive full retail credit for their solar production.
Now it’s official.
On Thursday, March 27, 2014, the CPUC handed down a decision adopting the 20-year transition period.
A. Summary of CPUC Decision:
The transition period is 20 years from the date of interconnection of a solar system, but eligibility is counted from the date that the customer submits all of the information required to receive permission to operate its solar system.
This means that a utility customer can continue to receive full retail credit for electricity generated for 20 years from the date of interconnection of its solar facility, as long as the paperwork required to obtain permission to operate is submitted prior to the earlier of:
B. Background on AB 327:
In September 2013, Cenergy Power issued an alert on Assembly Bill 327 (“AB 327″). AB 327 was subsequently signed into law on October 7, 2013. AB 327 provides a roadmap for how the NEM program will change for the IOUs.
The current NEM program provides IOU customers that go solar with a billing credit for full retail value of the electricity their solar systems generate. AB 327 makes some material changes to the NEM program:
C. What is the Bottom Line? - Critical NEM Transition Dates:
In its last alert, Cenergy included the following chart:
Now that we know the NEM transition period will be 20 years long, 2014 and 2015 are the ideal years for a business to go solar. 2016 will bring some uncertainty as solar adoption likely accelerates and the NEM Cap approaches ahead of the July 1, 2017 deadline. Waiting means that a business may have to accept the lower tariff rates that are expected to be issued as part of the follow-on tariff to the current NEM tariff. In addition, we expect there to be a backlog of projects attempting to interconnect in 2016 ahead of the deadline which may outstrip the IOUs’ capacity to provide interconnection services. Advanced planning to get projects on-line ahead of time in 2014-2015 will ensure completion and interconnection before the deadlines are reached.
Also note that, at the federal level, the 30% investment tax credit for solar is scheduled to decrease to 10% by December 31, 2016. As a result, going solar between now and December 31, 2016 is critical in order to lock-in both the existing higher NEM program rates and the existing 30% Federal tax credit.
If you have additional questions about the proposed transition period or AB 327, please contact Cenergy at 760.603.1933 or through our website (www.cenergypower.com).
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