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Distributed Electricity Tariff Reform in California: A Move Away from Solar Toward Storage
14 August 2023
Soren Christian
In the August issue of The Energy Dispatch, a newsletter of the Institute of Energy Law, NERA Senior Consultant Soren Christian examines the California Public Utilities Commission’s (CPUC’s) adoption of a new billing and metering regime for owners of rooftop photovoltaic (PV) solar panels, which took effect in April 2023. The Net Billing Tariff (NBT) replaces 2016’s Net Energy Metering (NEM) 2. The debate surrounding the recent decision has mostly centered around balancing environmental and equitable concerns. Mr. Christian offers insight into effectiveness of the regime including compensation for owners and the value of avoided emissions.
Mr. Christian explores recent trends in distributed capacity and prices within the California energy system, which are relevant to understanding the evolving contribution of distributed energy to the system. Mr. Christian examines the effectiveness of NEM 1, NEM 2, and NBT. Additionally, he provides recommendations to further improve tariff design.