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NET Energy METERING Agreement (NEMA)

July 17, 2019

At Sun Solar Electric, we are fully equipped to assist you in saving as much as possible on your monthly electric bill, including via helping you qualify for a California Net Energy Metering Agreement (NEMA).

If you have already installed solar panels or other sustainable energy generating equipment at your home, you can take the next step and set up a NEMA agreement that will reduce or eliminate your energy bill - or you may even make money each month on energy you sell back to your electric provider.

Or, if you are planning on installing solar or other environmentally friendly power sources on your property, a NEMA plan can be arranged to take effect as soon as you begin producing power. And in some cases, you may be able to pool costs with neighbors and then share the benefits going forward!

If you are interested in learning more about NEMA and how it may benefit you, feel free to contact Sun Solar Electric today by calling 707-280-7410, and we will be more than happy to assist you!

What Is Net Energy Metering in California?

When you install solar energy, wind energy, or fuel-cell battery chargers for your vehicles on your property, you both save on your power bill and reduce our collective carbon footprint here in California. But beyond that, you will likely become eligible for a state-sponsored NEM (net energy metering) program.

NEM permits all power company users who are also power generators to get credited on their electric bill for any and all energy they sell back to the power provider. You would have to generate "surplus" energy on-site before this kind of an agreement would make sense and be profitable to you. But many do just that - if not in the first year of solar energy production, then in subsequent years.

NEM, in its current form, was first introduced in January of 2016. The program was updated in July of 2017, but some who were already in it before that date are "grandfathered in" on the original terms of the NEM program. Both 2016 and 2017 rules are quite generous to consumers, so there's no reason to be too concerned about the "tweaking" of the system.

Anyone connected to the grid of any of the 3 major IOU power company regions (Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison) is eligible for the NEM program if they produce surplus electric power.

You get FULL RETAIL PRICE for the electric power you sell back to the grid, but you do have to pay a few fees as well that equalizes the true cost of power between NEM and non-NEM customers.

But also realize that you also remain eligible for all other rebates, incentives, and tax credits associated with green energy production that you would be entitled to without NEM. The combined savings of NEM sales and "green energy incentives" may well leave you making more money off the power you sell than you would have paid for it if you had bought it from the electric company. 

Signing Up For NEMA and Reaping the Benefits

As a customer generator, you can apply for a NEMA agreement, and we at Sun Solar Electric can help guide you through the process. We can ensure you are compliant before you apply and navigate you through the paperwork and other requirements so that signing up is fast, easy, and predictable.

Signing Up

Upon applying, you will have to pay a one time inter-connection fee to get started with NEM. The exact costs of this fee vary from provider to provider and based on the size of your facilities. However, you will pay between around $75 and $150 to interconnect a facility of one megawatt or less, and a fee of $800 for systems bigger than one megawatt. Additionally, over-one-megawatt connectors have to pay for transmission and distribution system upgrades when they're necessary. 

Most of our clients at Sun Solar Electric are going to qualify for the cheaper, under 1 megawatt, set up fee. But some may have to pay the higher fee if they're setting up a big production facility that they want to connect to the grid.

Be aware that, customer generators on NEM programs still have to pay small "non bypass-able" charges on each kWh consumed from the grid. These fees pay for such things as low income energy programs and energy efficiency programs. 

Also, if you're not already using a time of use based rate (TOU rate) from your electric provider, you have to switch over to it when you hook up for NEM. These rates normally save you money anyway, so it's good to switch - even though there's a fee for switching over.

Billing & Benefits

Your electric bill will be transformed into a credit under the NEM program, provided you put more energy on the grid than you took off of it. The energy you put on the grid has to be transferred during times you're not taking any off, however. So, you have to strategically switch between selling and buying as it makes sense at the time.

All costs considered (not just generation of power), you will be paid full retail value for your sold electric. This gives you even more incentive to produce and sell renewable energy than if you only got a less-then-retail sale price - and California does it that way on purpose to encourage green energy production in-state by local residents.

Buy when do you get paid? Not every month. Instead, you get paid based on NSC (net surplus compensation) rates at the end of a 12 month period. The rate is based on the 12-month average of the market rates during that period, which has usually come out to between 2 and 3 cents per kWh in recent years.

And besides the NSC for your annual excess electric sold to the grid, you also can benefit from the "REC" (renewable energy credit) program. This will give you even more income from your renewable energy production, but first you have to sign up for REC benefits through WREGIS and be sure you comply with all guidelines to be eligible.

At Sun Solar Electric, we can help you maximize the benefits of renewable energy production through both the NEM and REC programs!

Net Energy Metering Aggregation Agreements

Besides just doing a "solo" NEM agreement, there is also the possibility of aggregating the costs of renewable energy for all accounts based on the same property or adjacent or contiguous properties. This is called an NEM Aggregation agreement.

One property owner must be the customer generator and have the production facility on his or her property. And that person must be sole owner, leaser, or renter of the other properties. And again, realize that the NEM aggregate program ONLY involves properties that are adjacent or in any way "contiguous" to the property with the generation facility. 

What is the point of NEM aggregation? It works well for some who have multiple families living on agricultural land or in specific situations on urban properties. But it works especially well for apartments. The owner of the apartment complex and the occupants will both save money on energy and help the Earth at the same time via a NEM aggregation program.

There are a number of strict rules you have to comply with to qualify for NEM aggregation, and it takes careful planning since you have to make a close estimate of the annual power consumption of all properties involved in order to budget properly. You can use NEM to reduce the cost of electric for all users on the one account or to eliminate them or even make a profit. You get all the benefits of "ordinary" NEM.

And you will have a good deal of flexibility in determining where to locate the generation facility on your property, to save usable space. Hook up is usually completed in less than 30 days.

Additional NEMA Programs

Besides the Net Energy Metering programs already mentioned, there are 2 more you may want to be aware of. Sun Solar Electric is adept at setting you up for these programs as well, if you wish. And we can help you determine which NEM program is right for you and would save you the most money.


The VNEM (virtual NEM) program is designed for properties with multiple tenants, rather than for multiple properties owned by a single individual. It works much like NEM aggregation in some ways, and it allows the property owner to allocate credits to different bills and organize the savings for areas served by a single load.

VNEM is often used by local government and university properties for efficient cost savings. The production limit is five megawatts, and the rate for excess power sold is set at the price of generation only rather than the full process.


The NEMFC (net energy metering fuel cell) program is intended to save owners of electric cars money by saving them money on fuel cell power production. 

If your fuel cells are powered by renewable energy and recharged at facilities on your property, you could qualify for this program. The cells must also meet specific greenhouse-gas emission standards.

You will only be able to sell back excess power to the grid at the generation only rates for this program. If you generate more power for your fuel cell charger than you can use continually, this program can save you money. Already, over 100 megawatts of fuel cells have been installed due to the NEM FC Program.

At Sun Solar Electric, we can guide you through the process of deciding on which fuel cells to use and how to set up a solar power charging station at home. We can also help you qualify for NEM FC.

Why Choose Sun Solar Electric?

The solar and renewable energy market in general has mushroomed in size and complexity in recent years. There is more potential than ever before to generate all of the power you need for yourself and then to generate and sell surplus power to the grid.

But the rules and processes of getting started can be difficult for newcomers to understand without someone to guide them. We at Sun Solar Electric have been in the renewable energy business for many, many years, and we have a full understanding of NEM and other energy-saving programs.

If you want to have a NEM system installed or sign up an existing facility for NEM, we can help. If you are encountering any problems with your current system, we can help you with that as well. Or, we can help you expand or upgrade your system and reap the full benefits of it via NEM and various credits and incentives.

Sun Solar Electric is working hard to save people just like you money on their power bill and to reduce the environmental impact of Bay Area residents by lowering dependence on fossil fuels. 

We have assisted many others in "going green" and benefiting from it, and we stand ready to do the same for you!

Contact Sun Solar Electric Today to Get Started on Your NEMA Agreement!

At Sun Solar Electric, we have the tools, experience, and concern for the environment (and your power bill!) it takes to help you save money and save the planet at the same time!

To learn more about NEMA programs and which one might be best for you, or for a free no obligation quote on solar panels and other equipment necessary to get started with NEMA, contact us today by calling 707-280-7410.

We are based out of Sonoma, CA, and serve residents in all the surrounding counties of the SF Bay Area with their solar energy and related needs. Check out our services pages to learn more about what we do!

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