Net metering in New York is one of the best financial benefits of switching to solar energy. This program allows you to utilize the excess energy your solar panels produce at night or when it’s cloudy, for example, and in turn save on your electric bill.
But unfortunately, policies and programs like net metering that support the growth of rooftop solar have been in flux across the country. For New Yorkers considering solar, be aware that the New York Public Service Commission (NYPSC) and Con Edison have been changing the state’s net metering program and will likely continue to do so in the future. Now is the optimal time to go solar and ensure you receive the full financial benefits.
What is net metering?
If you’re an NYC homeowner considering installing solar panels on a flat roof, questions like these may have crossed your mind: How do I store the energy my system produces? What happens at night when there’s no sun?
If these questions are at the top of your mind, we have two words for you: net metering!
Simply put, net metering is a billing mechanism that allows you to store your solar energy as a retail energy credit to be used at a later date.
How does net metering work?
As a residential solar owner, you remain connected to the grid. When your solar PV system is installed, a net meter is installed with it. This net meter tells the utility company how much energy your solar system is exporting to the grid.
During the day, your solar system will likely produce a lot more energy than you’re actually using. All of that excess energy feeds back into the grid and can be used at night or during less sunny times of the year.
In this way, net metering in its current form could be considered a virtual battery. It allows you to utilize your solar production even when the sun isn’t shining. This is particularly appealing considering FDNY currently does not allow solar batteries in residential settings. Net metering ensures New Yorkers continue to benefit from all of the energy their solar systems produce.
Where to Find Your Electric Meter
After your solar array is installed, Con Edison will replace your existing electric meter with a net meter. A net meter enables Con Ed to track the amount of energy your system is exporting to the grid which allows the company to compensate you on your future electric bills.
If you live in a house, your meter could be located outside where the power lines come into the home, or inside, in the basement, garage, or other utility room. If you live in a multi-family building or apartment building, the meters for each unit may be grouped together in one location.
Consolidated Edison Company of New York
If you pay an electric bill in NYC, you’re probably aware of Consolidated Edison, or Con Ed for short. Con Ed is one of the largest utility delivery companies in the country, providing electric and gas service to all of New York City and Westchester.
As a solar customer, you’ll remain connected to the electrical grid. Although you’ll continue to receive electric bills from Con Ed each month, you’ll owe the company much less – thanks to net metering.
Ready to start saving on your electric bill? Contact us today.
Is there a difference between net metering and remote net metering?
Remote net metering was established in New York in 2011, enabling renewable energy generated by one system to be distributed among multiple utility accounts. This program allows farms and non-residential customers to use the energy produced by a designated “host” system in one location across their “satellite” accounts in other locations.
It is different from conventional net metering because it doesn’t apply to residential customers, and it distributes energy across multiple accounts as opposed to a single account.
Are there financial benefits to net metering?
Net metering helps you get the most bang for your buck when you go solar. Your net meter keeps track of how many kilowatt-hours your system produces and exports to the grid. The electric company only charges you for your net energy usage (energy consumption – energy production).
Take this scenario from New York State Solar for example:
Let’s say in one month, your solar system produced 1,000 kWh. Your household consumption was 800 kWh. Your net consumption was -200 kWh; in other words, your solar system produced an extra 200 kWh more than what you needed that month. Your utility will credit your electricity account those extra kilowatt-hour credits for the next month, if you need them. It‘s indicated on your bill as your ‘energy bank.’
Let’s say the next month your solar system produces another 1,000 kWh. However, your home uses 1,200 kWh. In this case, the utility will include the 200 kWh credit from the previous month. In this case, everything evens out, and they wouldn’t charge you for electricity, because your net consumption was zero.
When you make the switch to solar, net metering credits you for all the energy your system produces. Under the current program, the kilowatt-hours that your solar system exports are valued at the retail electric cost; in other words, as Con Edison rates rise, the value of the energy your system exports does too. It also ensures that energy is supplied at times when producing and acquiring energy is most costly, like at nighttime. For these reasons, net metering is one of the best financial incentives when it comes to going solar.
Want to learn more about the solar incentives you could qualify for? Get in touch!
Net metering not only benefits you as a homeowner, but the community and economy overall. It reduces the need for transmission upgrades or new generation and contributes to overall reliability and NYC’s climate goals.
It also increases demand for solar energy. This creates jobs for the installers, electricians, and manufacturers who work in the solar supply chain. The solar industry currently employs 250,000+ American workers in large part due to strong state net metering policies which have allowed it to thrive.
What does the future of net metering look like in NYC?
For New Yorkers considering solar, be aware that Con Edison has begun changing their net metering program. Utilities in other states have recently been doing the same in order to address “cost-shifting.” Cost-shifts occur when utility companies claim they must charge their non-solar customers more money in order to make up for the revenue they lose from net metering.
To address cost shifting, NYSERDA announced in July of 2020 that Phase One Net Metering would only be available for projects interconnected before January 1, 2022. Projects that qualified for Phase One Net Metering will continue to receive the full retail value of their solar power for 20 years post interconnection, with no additional charges.
In addition, NYSERDA announced a new method of compensating distributed energy resources, called the Value of Distributed Energy Resources (VDER). Under this program, solar system owners receive a Value Stack Tariff rate for the energy their systems produce rather than the full retail value of it.
As of January 1, 2022, new residential projects have the option to choose between the Value Stack Tariff or net metering. But in either case, customers will also be charged a monthly Customer Benefit Contribution (CBC). The CBC charge is effectively a tax on solar, costing customers between $7-10 a month on their electric bills.
Value of Distributed Energy Resources (VDER)
In support of Reforming the Energy Vision, the NYPSC established a new method of compensating distributed energy resources, like solar power. This Value of Distributed Energy Resources (VDER) or the Value Stack, might replace the current full retail value net metering program. Currently, only large-scale and commercial installations are required to use the Value Stack while residential customers have the option to choose between VDER and net metering.
ConEd’s Value Stack allows the utility to decide the value of your solar power based on when and where they provide electricity to the grid. Under this program, your solar power will be considerably undervalued.
Compensation for energy under net metering is fairly straightforward—kilowatt hours in exchange for kilowatt hours. The value of your solar is pegged to the retail rate of power. The Value Stack is less predictable due to the multiple factors that make up the calculation, so it’s more difficult to estimate compensation. Therefore, compensation with net metering is, in most cases, higher than the Value Stack. To sum it up – you’ll be getting less bang for your buck with VDER.
Will changes to net metering affect my investment in solar?
While the potential savings from the current net metering program will be reduced due to the Value Stack and CBC charge, it is important to know that the return on your investment in solar will not change significantly. Whenever you’re using energy from the sun rather than fossil fuels coming from the grid, you’re saving money.
Though payback periods may vary when factoring in these new changes, the investment in solar is still worthwhile — for yourself, your home, and the planet.
Go Solar Now to Avoid Uncertainty
Unfortunately, times are changing for solar policy across the country. From changes to net metering policies, to additional charges for solar customers, to the impending expiration of the federal tax credit, plenty of uncertainty lies ahead.
That’s why we urge New Yorkers considering home solar to move forward as soon as possible. By signing on now, you’ll avoid policy changes and be able to take advantage of New York State solar incentives at their peak.
Are you ready to flip the switch to solar? Schedule a consultation today!