Governments Stand Up for Solar – NEM 2.0 and Federal Tax Credit Update

All over California, solar companies like Allterra Solar have been watching the news closely.

At the federal and state level, two fundamental solar initiatives are being discussed and voted on: California’s Net Energy Metering Program and IRS’s Renewable Energy Tax Credit of 30%.

Both greatly impact residential and commercial solar projects and are being decided as I write this.

Here is an update and overview of proposed changes to be voted on:

Net Energy Metering (NEM) 2.0

The CA Public Utility Commission (PUC) issued their proposed change to the Net Energy Metering (NEM) rates for NEM 2.0. The NEM sets the value of solar energy and is critical for residential and small commercial solar projects.

At first review, the NEM 2.0 rates look better than we expected, great news for roof mount solar, California, and all island nations…

Here’s a summary of the major changes:

  • Solar energy will continue to be credited at retail rates: This is a BIG deal. PG&E issuing full credit for solar power is the reason solar is booming and enables PEOPLE to save money on utility bills with solar.
  • Application Fee: There will be a $75-$150 fee for new solar interconnections. That is fair.
  • Consumption Charge of $0.03/kwh: Not sure how to quantify the impact to PG&E bills but it means small charges for solar owners based on electricity consumed from the grid.
  • Raise Minimum BillThe current minimum bill is $10/mo, or $120/yr. This is the fee for being connected to the grid. The minimum bill will go up a bit more.

If NEM 1.0 is an A grade, NEM 2.0 is a B.

Overall, this is excellent news for the solar industry in California. Solar is creating jobs and saving families money, NEM 2.0 will keep those trends going.

NEM 2.0 is not final, the Public Comment period has begun and the Public Utilities Commission Board will vote to finalize NEM 2.0 in January 2016.

More info can be found in this article:

Federal Investment Tax Credit Extension on Verge of Passing in DC

Screen Shot 2015-10-01 at 8.43.00 PMI was flabbergasted on this one… Congress is on the verge of extending the federal tax credit as part of an appropriations bill!

This is huge for 3 reasons:

1. Congress is actual doing something. Lets be real, passing a bill is an accomplishment these days.

2. Congress is supporting clean energy. The Paris Climate talks ended with an agreement signed and Congress is standing up for clean energy.

3. Congress was debating if carbon emissions are contaminates only a few years ago. US Politicians are moving from obstructing clean energy to passing a bill to support clean energy, that is amazing.

As of now, the Appropriations Bill would extend the 30% tax credit to 2019, then step down the tax credit to 26% in 2020, 22% in 2021, and 10% in 2022. Great news for solar and homeowners through out the United States. The tax credit gives homeowners and businesses 30% off the cost to install solar.

Extending the solar tax credit did come with a condition, the 40-year ban on crude oil exports will be lifted. I’ll take it! Solar gets to grow and oil companies can export oil. A fair exchange given the importance of solar to our energy and transportation futures.

To read more about the Appropriations Bill and solar tax credit check out the following articles:

Wall Street Journal: Congressional Leaders Reach Sweeping Deal on Tax and Spending Legislation

Green Tech Media: Congress Is on the Verge of Passing Multi-Year Extensions for Solar and Wind Tax Credits

What Does All of this Mean?

194 countries across the world supported solar in Paris last week.

California supported solar with a pro-solar NEM 2.0 proposal yesterday, and now Washington DC will likely extend the 30% tax credit.

Solar is gaining momentum and politicians have begun to respect it’s potential. Perhaps it is time for homeowners in California to respect solar too and get informed. How do these incentives affect you and your electricity costs? Find out… you may save a ton of money with solar.