If you’re a solar energy customer with PG&E, you may have come across NEM charges on your bill. But what exactly are these charges, and how do they impact your overall energy costs? NEM, or Net Energy Metering, is a billing mechanism for solar energy users that balances the electricity you generate with what you consume from the grid. In this article, we’ll break down what NEM charges are, how they work, and how they can affect your monthly PG&E bill.
Net Energy Metering (NEM)
One of the best qualities they can take advantage of is net energy metering for homeowners who install a grid-connected solar panel system. NEM helps you to gain energy credits for your solar panel system’s excess energy. And then you can place these credits at the same amount of energy you used at a later time. This is particularly useful when homeowners generate significant amounts of energy during the summer, and when they produce fewer, they want to use those credits in later months. Upon switching to solar, there will be a portion going over your monthly NEM balance on your PG&E electric bill. This is added to your entire balance, which is charged with your annual statement on True-Up Energy. That part of your bill also displays your peak and off-hour energy usage. This relates to the payment structure of PG&E’s time-of-use (TOU), where the electricity rate varies throughout the day. Any negative numbers come from that month’s generation of excess electricity. There is also a $7.86 government-mandated tax, irrespective of how much energy you use.
Together with the NBC Net Usage Adjustment, this fee represents the minimum delivery charges to be charged every month. That’s why it’s never entirely possible to pay zero dollars on your electric bill, but if you generate more electricity than you consume over the year, you will earn money from your annual True-Up Energy statement. To keep your solar panel system connected to the grid and allow you to continue using PG&E’s solar services, the minimum distribution charges are expected.
NEM Balance
Your NEM balance refers to the annual True-Up Energy statement in which you pay all of your NEM cumulative fees. Through saving credits and reducing your own electricity consumption, you can mitigate this balance. You will also obtain a pre-tax graph of your NEM costs, which also shows you monthly results, rather than a cumulative number. It gives you a better understanding of which months you are pessimistic and produce more energy than you use.
Flexibility and Opportunities to Save
PG&E has a payment system that allows an energy user to maximize their solar energy production and consumption to reduce their electric bill. Solar panel owners in California have a lot of flexibility in how they handle their energy use from PG&E’s TOU payment structure to their NEM payment model.
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