How to Grandfather Your Solar System into NEM 2.0
Update: NEM 3.0 took effect on April 15, 2023. Solar systems with interconnection applications submitted on or after this date will be placed under NEM 3.0 solar billing. Solar systems with interconnection applications submitted on or before April 14, 2023 can still be grandfathered into NEM 2.0, even if the application is reviewed and approved by the utility after the April 14 submission deadline.
With NEM 3.0 approved and scheduled to take effect in mid-April, customers of California’s investor-owned utilities have a brief window to grandfather a solar system into the much more favorable NEM 2.0.
Going solar under NEM 2.0 means a shorter payback period and greater monthly savings, adding up to tens of thousands of dollars over the life of a solar system.
So we teamed up with Nathan Perry, a cleantech educator and NEM policy expert, to provide a roadmap for Californians to go solar under NEM 2.0.
But let’s start with the big question: Why does grandfathering your solar system into NEM 2.0 matter?
Related reading: Is Solar Still Worth It With NEM 3.0 in California? 5 Ways To Maximize Your Savings
Solar savings under NEM 2.0 vs NEM 3.0
Moving quickly to get a solar system grandfathered into NEM 2.0 may seem like pain, but there are obvious fruits to your labor.
Under NEM 3.0, compensation for excess solar energy exported onto the grid will be on average 75% less than under NEM 2.0. Over the 25-year warrantied life of a solar system, that adds up to a major reduction in energy cost savings.
Here’s how that looks for a cash purchase for an average 7.6 kW system:
So, if over $40,000 in electricity cost savings sounds worth fighting for, let’s look at how to grandfather your system into NEM 2.0.
Related reading: 5 Things To Know in the Final Weeks of NEM 2.0
How to grandfather a solar system into NEM 2.0
There are two steps required to grandfather a solar system into NEM 2.0.
- Submit a solar interconnection application to your utility before April 13, 2023
- Install and receive permission to operate (PTO) within three years of submitting your interconnection application
Now, unless you speak solar-ese, you’re probably wondering “What is an interconnection application and how do I submit one.”
We’re so glad you asked! Let’s start with a quick crash course on interconnection applications.
Quick Note: NEM 3.0 is not retroactive. Existing solar systems will remain under their current net metering policy for 20 years from their interconnection date.
What is an interconnection application?
According to Perry, an interconnection application is a series of documents that give your utility company information about your solar system in order to turn it on safely.
According to the final NEM 3.0 proposal, a valid solar interconnection application includes:
- Complete application
- Signed contract
- Single-line diagram
- CSLB Disclosure Document
- Signed consumer protection guide
- Oversizing attestations (if applicable)
While this list of items reads like gibberish, these are all standard documents that any reputable solar installer will be familiar with.
How do I submit an interconnection application?
Ready for the good news? Your solar company will fill out this application and submit it on your behalf.
In terms of grandfathering a system into NEM 2.0, the more important question is when in the solar process can you submit an interconnection application.
“Grandfathering is based on the submission date of the interconnection application, which can be done before the system is even installed,” Perry said. “This step can be completed anytime after the site survey when the design is finalized.”
Typically, solar installers submit the interconnection application after the system has been installed. However, in response to NEM 3.0, many – but not all – companies are changing their operations process to submit as early as possible.
Since solar installations typically take 3-5 months to line up, it’s important to find an installer that has changed their process to submit interconnection applications early.
Get the solar process started today with multiple quotes from vetted network of installers
5 tips for grandfathering a solar system into NEM 2.0
There is little time to waste if you’re trying to grandfather a solar system into NEM 2.0, so we rounded up some tips for getting your solar interconnection application submitted before the April 13 deadline.
Tip #1: Get solar quotes ASAP
According to Perry, the first and most important step is to get quotes from reputable solar installers – which you can do right here on solar.com.
Identifying, vetting, and gathering quotes with multiple solar companies takes time, but we’re here to quickly do that legwork for you.
In our guided solar process, you team up with an Energy Advisor to quickly generate dozens of quotes from vetted local installers. We’ll present you with the three best and advocate for your project throughout the process.
Every installer in our network is rigorously vetted for certifications, experience, sound financials, and excellent customer experience. In fact, we accept fewer than 30% of the companies that apply.
Connect with an Energy Advisor to start your solar project.
Tip #2: Identify installers with NEM 2.0 grandfathering processes
Once you’ve generated quotes, Perry said it’s important to narrow the list down to installers with this crucial question:
Is your company prepared to submit the documents needed for NEM 2 grandfathering early in the process?
This is important because the interconnection application step is usually done after the installation, which can take 3-5 months. But the recent NEM 3 ruling changed this process. Instead of waiting until after installation to submit the required documents for grandfathering, many companies are changing their operations process to submit as early as possible.
“Do not assume that every solar company will be adapting to this grandfathering process,” Perry said. “I’ve already seen solar company emails to customers explaining that you must be installed to be grandfathered.”
Tip #3: Double-check the information on your contract
Once you’ve selected an installer and designed a system, the next thing you can do is make sure the information in your contract is 100% accurate. The contract is a crucial part of the interconnection agreement and one of the only things you can control.
“Double-check that your name is spelled and formatted identically to how your utility has it on your electric bill,” Perry said. “Everything else on the interconnection application is your installer’s responsibility.”
According to the final NEM 3.0 proposal, grandfathering into NEM 2.0 requires submitting an interconnection application “free of major deficiencies” which is, frankly, a meaningless term. The CPUC and investor-owned utilities have not clarified what constitutes a “major deficiency.”
So, it’s important to double-check your contract and submit your application as early as possible.
“The earlier you start the process, the more time there is to catch deficiencies and get them corrected before the April 13th deadline,” Perry said.
Tip #4: Request and save emails from your utility
Grandfathering into NEM 2.0 is based on the submission date of the required documents, so it’s crucial to keep a record of when your interconnection application was submitted.
Your utility will send your solar company with one of three phrases to confirm submission:
- “Sent for review” (PG&E)
- “Deemed valid” (SCE)
- “Pending AHJ” (SDG&E)
“I would request my solar company to forward me the email confirming receipt of the documents as proof of grandfathering,” Perry said.
Tip #5: Be quick to pivot
Perry’s final tip is a simple one: If your installer can’t grandfather your system into NEM 2.0, get a new one!
“There is no time to be loyal to an installer being slow or difficult to work with when time is short and you need to be grandfathered to lock in your solar benefits,” Perry said. “If your installer is not communicating about the hold-up, I would send them an email saying you are canceling your contract, then move on to another company.”
Beginning in January, you should be able to get emailed proof that you have been grandfathered within 2-3 weeks of signing the contract, Perry added.
The bottom line
With NEM 3.0 approved, customers of California’s investor-owned utilities – PG&E, SCE, and SDG&E – have a brief window to grandfather a solar system under the much more favorable NEM 2.0.
In order to remain under NEM 2.0, you must submit a valid solar interconnection application before NEM 3.0 takes effect on April 13, 2023.
The keys to grandfathering a solar system into NEM 2.0 are:
- Get solar quotes from reputable installers as soon as possible
- Choose an installer that has adapted their process to submit interconnection applications as early as possible
- Match the name on your solar contract exactly how it shows up on your utility electricity bill
- Request and save the confirmation emails the utility sends to your installer
There is no time to waste. Get started with multiple solar quotes today!
