What Is Net Energy Metering?

Net energy metering or “NEM” is a program in Sonoma County that provides full retail value for excess electricity that solar customers generate and send back to the grid. Energy that the utilities turn around and sell to non-solar customers. When you are generating excess electricity, the meter spins backward. 

When the California Public Utilities Commission (CPUC) first introduced net metering, NEM 1.0, the goal was to encourage Californians to adopt residential solar. This clean, alternative energy option is more affordable in California due to Net Metering programs.


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In 2016, CPUC began changing to the policy we have now called NEM 2.0. This change came with stipulations, requiring customers to:

  • Pay a one-time interconnection fee.
  • Pay Non-bypassable charges, about 2-3 cents per kWh sold back to the grid, which was intended to help fund public programs like energy efficiency rebates and solar for low-income customers. 
  • Transfer to a Time of Use (TOU) rate plan. This led to the growth of adding solar batteries to solar panel systems to take advantage of their solar power production. 

If you would like to increase your savings and energy independence, consider implementing a residential solar battery to store unused electricity for later use rather than sending it into the grid. As the policies around Net Metering are set to change again at the end of 2021, the benefits of battery storage are bound to increase. 


Customers are grandfathered into the current net metering program contract for 20 years from the date their solar energy system goes into service. For those that installed solar during NEM 1.0, they might still be reaping those benefits. If you’re considering going solar, seriously consider calling us before November 2021 when NEM 3.0 decisions are finalized.

This grandfathering status remains with the system even if you sell your home or business and the ownership of the solar energy system changes hands. The only thing that will affect your grandfathered status is if you make significant changes to your solar system, such as adding new solar panels to increase capacity by more than ten percent.


The new net metering program, NEM 3.0, is expected to be less advantageous than NEM 2.0 and NEM 1.0. Utilities have submitted proposals for NEM 3.0 that include:

  • Higher solar fees
  • Cuts on credit earned for energy sold back to the grid
  • Higher fees for non-residential customers

In addition to a reduction in solar benefits with NEM 3.0, the federal tax credit is set to change from 26% to 22% in 2023. Now is the best time to take advantage of solar programs and tax credits by investing in solar with Westcoast Solar Energy. 

To be eligible for the solar tax credit extension, you must:

  • Own the system via cash or a solar loan. PPA Financing or Leases are not eligible. 
  • Have income tax liability. The tax credit can roll over to be claimed in future years up to 5 years after filing. 
  • Have purchased the original installation.

For more information on the benefits of going solar before November 2021, please contact Westcoast Solar Energy at (707) 664-6450, or you can email us here.

Creating Solar Energy Opportunities with these Great Organizations

Northern California Engineering Contractors Association
Solar Sonoma County
North American Board of Certified Energy Practitioners
California Solar Storage Association
Santa Rosa Chamber of Commerce
Rohnert Park Chamber of Commerce
Solar Power World
North Coast Builders Exchange