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Potential Timeline for Net Energy Metering 3 (NEM 3.0)
The Impacts of Potential Changes to Net Energy Metering (NEM 3.0)
October 14, 2021

Agricultural Solar is Under Threat by Net Metering Changes – NEM 3

Argicultural Solar is Under Threat by Changes to Net Energy Metering (NEM 3)

Potential Changes To Net Energy Metering Threaten Agricultural Solar

California’s agricultural industry is one of the most popular adopters of solar technology due to extremely high average electricity bills. 

Crop growers use large pump systems to push around water for irrigation – causing huge spikes in electricity usage for growers. On-farm agricultural solar PV systems drastically offsets the costs incurred by irrigation primarily using Net Energy Metering. 

California growers yet to adopt this technology and considering going solar are now under threat from potential changes to the net energy metering program that will reduce the value of credits received for solar energy shared with the utility and add major monthly fees for interconnection.

How Does Net Energy Metering Currently Work? (NEM 2)

Originally, net energy metering 2.0 (NEM 2) allowed businesses with agricultural solar to export over-produced solar energy, sending the extra solar energy back to the utility to be used elsewhere. The solar energy is exchanged for energy-credits currently near the actual usage rates. 

These credits are then used various times throughout irrigation periods to offset the high electricity usage needed to run pumps. 

How Will Net Energy Metering Work Going Forward? (NEM 3)

With the new proposed NEM 3.0, solar users will receive a fraction of the credit value they would under the current program. They will also incur a monthly fee for interconnection with the grid. This fee could be upwards of $3,000 per month. 

Utilities have been lobbying the California Public Utilities Commission (CPUC) to change the net energy metering program, a vote and decision is expected in December 2021.

The proposed changes in NEM 3 are uncertain until the decision is made, but two things are clear;

  • Payback rates on all solar systems will increase,
  • The value of solar energy exported back to the grid will decrease.

Agricultural utility customers often use energy differently than industry counterparts, unique electricity load-profiles, and varying times of use create problems that solar can help solve.

Net Energy Metering (NEM) is the difference between energy produced and energy consumed, resulting in net energy.
2-Long - Long Life Farms Agriclutural Solar - Thermal, CA

There's Still Time to Earn "Grandfather" Status for the Old Program (NEM 2)

While the new program faces detrimental changes, there is still time to apply for the current iteration of net energy metering (NEM 2). NEM Applications must be tentatively approved by December 31, 2021 to ensure “grandfather” status into the current, more lucrative program.

Revel Energy has helped many different agribusinesses take control of how they pay for energy with agricultural solar to create savings and positive cash flow. Contact us today to start a net energy metering 2 application for your business before the potential changes of NEM 3.

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