Looking for definitive answer: Does the 20 year NEM lock get reset when a new NEM2 system is added to a NEM1 system?

[RKCRLR]

I mentioned this in another thread but I thought it would be better to start a dedicated thread for this. I have not been able to get definitive written answer from PG&E for this.

I installed a 4kW rooftop solar system under NEM1 in 2009. I installed an additional 5.9 kW rooftop system under NEM2 in 2019. I installed 2 Powerwalls in 2020.

When I installed the additional system in 2019 I was told by both PG&E and my installer that the only I could keep the remaining 10 years on NEM1 for the original system was to install a separate meter for it at a cost of ~$2k. My other option was to give up the remaining 10 years on NEM1 for the old system and have both systems under NEM2 for 20 years from the install date of the second system, which is what I chose. There was no mention of resetting my NEM2 date when I had the Powerwalls installed.

Someone posted a link to this FAQ in another thread:

Rebates & Incentives

California utility rebates and incentives from PG&E and others, including solar rebates and incentives.

www.pge.com

It states:
"If the renewable generator is modified or repaired during the "grandfathering" period, the customer will remain eligible only if the NEM1 system does not increase in size more than 10 percent of the generating capacity in the original PTO letter, or 1 kW, whichever is greater.

However, if the capacity increase is greater than 1 kW or 10% of the original approved generator capacity, whichever is larger, the customer cannot utilize the NEM1 program for the entire system. The customer would have the following two options:

1. Separately meter* the added capacity with NEMMT to take service under the NEM2 program, or
2. Elect for the entire system to take service under the NEM2 program.

The separately metered system is eligible to be grandfathered under the NEM2 program for the full 20 years. However, if the entire system takes service under the NEM2 program, it will be grandfathered under the NEM2 program beginning from the date of the issuance of the NEM1 PTO."

This concerned me so I called PG&E. They stated that the 20 year period was reset for the old system and the whole system is under NEM2 for 20 years from the last upgrade. I asked them if they could send me anything in writing. They said my NEM expiration date is on my bill. I asked them to show me where and they couldn't. They then said it was on my PTO email. I looked at both the PTO email for my 2019 solar install as well as the PTO email for the Powerwalls. There is no NEM expiration date or reference to a 20 year period. They then said there is a field in their system that shows I'm on NEM2 through 2040 which seems a little strange since I thought adding Powerwalls to an existing solar installation shouldn't reset your NEM status. I asked the representative if she could send me a screenshot or some other verification of my NEM expiration date but she said she wasn't allowed to do that. She did send me the following link and look at page 4 to substantiate that NEM is reset when a system is upgraded:
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M158/K181/158181678.pdf
It says:
"Provides that customer-generators may continue to take service under the NEM successor tariff established by this decision for 20 years from the year of interconnection of the customer’s system;"
This still doesn't make it clear to me.

Having the NEM2 20 year period start from the original NEM1 installation date doesn't make sense to me. If someone installed solar under NEM 1 in 2002 and then installed more solar in 2021 then that would mean they would only have 1 year of grandfathering before being transitioned to NEM 3 in 2022 but if someone installed a system of the same total size in 2021 then they would have 20 years of NEM2 starting from 2021.

Does anyone have written verification that when a NEM1 system is upgraded under NEM2 that the 20 year NEM2 period starts from the date of the upgrade?

 

[Ampster]

If I recall correctly, the main difference between NEM 1.0 and 2.0 are the Non Bypassable charges. Do you see those on your current bill? Without a separate meter there would be no way to separate NBCs from your NEM 1.0 production. That is a different issue than the question you asked but it is one that would have the most current impact on your bill. The twenty year grandfathering may be at risk anyway, depending on how the new Successor Tariff (NEM 3.0) gets approved.
The actual rates charged per kWh would be the same.

 

[RKCRLR]

I'm mainly concerned about the 20 year NEM2 grandfathering. Even if NEM3 goes through the way it is currently proposed I'd still have NEM2 through 2034 (or 2035) vs 2024 if the 20 year grandfathering goes back to the NEM1 installation.

 

[Ampster]

I'm mainly concerned about the 20 year NEM2 grandfathering.

I understand. My point was that if you see NBCs that might add weight to the probability that they are using your 2019 NEM date so you could hope for a 2034 expiration of NEM 2.0 grandfathering.

 

[RKCRLR]

I understand. My point was that if you see NBCs that might add weight to the probability that they are using your 2019 NEM date so you could hope for a 2034 expiration of NEM 2.0 grandfathering.

I had agreed to the whole system being moved NEM2, otherwise I would've had to install a separate meter. There really isn't a question there.

The more you think about it the sillier it is to go back to the original installation date. If someone installed solar in 2001 and then upgraded in 2021 they would immediately be moved to NEM3 (assuming NEM3 goes through this year). But if they deactivated their original solar and then incorporated it into the same size installation in 2021 they would be grandfathered into NEM2 until 2041 (or 2036).

 

[arnolddeleon]

I'm sorting out the same thing. I called PG&E solar support a few days ago I'm being told that my "grandfather" time starts with the most recent PV install which was April 2021. This was the consensus of the solar support folks that the agent I was talking to consulted. They said they will double check and have someone call me, so far I haven't heard anything back.

Here is what I have and the status that I got from PG&E

2002 - 10 kW: PG&E seems to have completely forgotten about this this system. As far as they are concerned it doesn't exist
2008 - added 2.1 kW: NEM 1.0 (this seems to be oldest record they have for me)
2018 - 2 Powerwalls added, went onto NEM-MT. It appears that I'm basically on NEM 2.0 at this point. The 2008 is system recorded as 2.7 kW. It appears the my PTO date for the entire system for NEM purposes is reset to this date.
2021 - Added 4 kW of solar plus another Powerwall. I'm told April 2021 is my PTO date for grandfathering purposes.

Obviously the missing 10 kW is feature in NEM 3.0 solar tax world. It had been an issue before where my export credits were being limited. But with non-bypassable (NBCs), self consumption solves the problem with no cost penalty.

I'm not sure I want to depend on the system being lost. Right now the most important thing is determining the PTO date for grandfathering purposes. If @RKCRLR and I are being told is true then we will avoid the worst of NEM 3.0 for at least 10 years, possibly more.

I'm hedging my bets and I'm researching my options for replacing the 10 kW system (Is "Project Solar" the cheapest solar out there? Are they any good?)

 

[Ampster]

I'm sorting out the same thing.

This gives me food for thought on on a system I own on a rental property. That NEM PTO was 2011 and I have replaced the inverter and the Panels. It was approved at 2.7 kW but is now 3.6 kW. When more is known about the Successor Tariff it might be worth my while to update my NEM agreement to 2.0 with a date of 2022. The NBCs would be a small price to pay to avoid the fixed charge of $22 per month starting in 2026.

 

[sunwarriors]

My guess is PG&E, nor anyone knows. This is why we all think a certain way, but maybe when the original plans were drafted, they were worded the way they are in the FAQ. Constantly extending grandfathering sounds a bit one sided as well.

Most/near all solar sales people/installers also have no clue probably and to make a sale, typically will say whatever they can to get a sale done. This would mean whatever is most beneficial for a home owner ("Do you want to pay $2k more for a separate meter?, nah not needed, you'll be NEM2.0 anyways, don't worry about it.")

The concern I see is some market exec at the utilities sees a big way to get a promotion/generate a lot of revenue for the company/their resume and starts looking up all these installs and follow whatever is on the legal paperwork (if there is any) of what the rule really is.

Say a typically homeowner has a 4kW system from way back, at year 19, puts 1kW more (over 10%), now get 20 years on the 5kW system for 20 more years? As much as I support solar/NEM2.0 from all my past comments, I'm not sure that's intended neither.

Ideally, what they should/can do is just put another meter now if required and 1 is on 1.0/other is 2.0.

I looked through some of paperwork and didn't see anything, but I'll check more on anything grandfathering wording.

 

[Ampster]

I'll check more on anything grandfathering wording.

Good luck at getting clarity. The Investor Owned Utilities are good at using wording that can be interpreted to their advantage.

 

[arnolddeleon]

This gives me food for thought on on a system I own on a rental property. That NEM PTO was 2011 and I have replaced the inverter and the Panels. It was approved at 2.7 kW but is now 3.6 kW. When more is known about the Successor Tariff it might be worth my while to update my NEM agreement to 2.0 with a date of 2022. The NBCs would be a small price to pay to avoid the fixed charge of $22 per month starting in 2026.

I also have rental property with solar that I'm also sorting out. PG&E also has "forgotten" about the the original system on that property. The current PTO on it is dated 2014. I replaced the system on that one with a smaller when BP paid me cash to resolve a warranty claim. I bought the largest system the cash would allow me to install but I ended be limited by new rules on setbacks from the ridge. Tesla also wouldn't install on the flat roof (which had existing posts I had my roofer install when I reroofed just before solar so that limited the solar further.

The primary thing holding me back is the not being able to get the solar tax credit on it.

 

[Ampster]

I replaced the system on that one with a smaller when BP paid me cash to resolve a warranty claim.

Haha. That is exactly what happened to me. The warranty cash allowed me to purchase new panels with 1kW more capacity.

 

[miimura]

This is a question that should be put the CPUC so that they can make their intention clear in the Successor Tariff.

 

[RKCRLR]

This is a question that should be put the CPUC so that they can make their intention clear in the Successor Tariff.

I sent them an email, I'll see if I get a response.
There shouldn't be any ambiguity in this issue, it is a pretty basic question.

Does the 20 year period get reset when a system is upgraded from NEM1 to NEM2?

 

[Ampster]

Does the 20 year period get reset when a system is upgraded from NEM1 to NEM2?

I think because of the way even the 20 year grandfathering has been potentially eroded to 15 years there will never be a "definitive" answer. Things will probably change several times between now and then. All I expect is a reasonable probability of an outcome when up against formidable entities like the CPUC and the IOUs. The only action any of us can take in light of this uncertainty is to have a strategy the is flexible and can adapt to any changes.
Keep us advised when you get an answer.

 

[RKCRLR]

I think because of the way even the 20 year grandfathering has been potentially eroded to 15 years there will never be a "definitive" answer. Things will probably change several times between now and then. All I expect is a reasonable probability of an outcome when up against formidable entities like the CPUC and the IOUs. The only action any of us can take in light of this uncertainty is to have a strategy the is flexible and can adapt to any changes.
Keep us advised when you get an answer.

The 20 year period (or whatever the new period is) should be set in stone. Otherwise, they could promise 20 years and then change it to 1 year the next year. If that is the approach then no one would make an investment.
Ignoring the current NEM3 proposal (which is just a proposal), the CPUC and PG&E should know the answer to the question under the current regulations. If not, that is just plain incompetence. If they know the answer but don't want to disclose it in writing, that is probably illegal for both the CPUC and PG&E.

 

[Ampster]

I agree about the incompetence. My point has always been that the language is ambigous and subject to interpretation by the IOUs. The attorneys are competent and the CPUC is incompetent to let them put that language in our NEM agreements.

 

[RKCRLR]

I never heard back from the CPUC so I filed a complaint against PG&E saying they wouldn't send me something in writing when the effective date of my NEM expires.
I didn't get the actual date in writing. They said they couldn't give me something in writing because the rules might change. That makes about as much sense as saying they can't put their rates in writing because they might change.

But they did send me the following which isn't good news:

"I left you a voicemail explaining the purpose of this email. Per your request you are inquiring on when your NEM2 will expire. Your account falls under our NEM2 Tariff. When you upgraded your system in 2019 you were put on NEM2 because of the size of your system and because you did not install a separate meter. This makes the Legacy Provision applicable to your account. The 20 year date begins the date of your original PTO, per our records that date is 12/17/2009. If the tariffs do not change then your expiration date would be 20 years from that date. We do apologize if you were given incorrect information, we will be sure to investigate the information that was provided to you and take the appropriate actions to assure it does not happen in the future.

Her is the tariff for your reference, the entire tariff can be found at ELEC_SCHEDS_NEM2.pdf (pge.com)


We do apologize for any confusion or frustration you have endured. I will be closing out the investigation and will be providing CPUC with our findings. If you have further questions please let us know.



Thank you,

Mindy Reed, Customer Relations Consultant Customer Relations and Executive Escalations Pacific Gas & Electric Cell: 661.529.1385 |Email: [email protected]

"

My system is under 10kW so I'm assuming when she says "because the size of your system" she means because I did an upgrade that was larger than 10% of my original size.
The wording is a little unclear because they state a one-time switch. Does that mean I can't you can't upgrade your system again? And I didn't "elect" to switch my system to NEM2. I was told I had to do it if I didn't pay for installing an additional meter.

It would be interesting to see if other utilities have the same interpretation of the 20 year grandfathering starting from the original PTO date when a system is updated.

 

[Ampster]

That is not the outcome I would have expected. However it is the definitive answer that benefits PG&E
The language does say, ".....from the date customer originally received PTO...". If the Successor Tariff goes through as worded your experation would be 15 years from 2009.

 

[RKCRLR]

I'm sorting out the same thing. I called PG&E solar support a few days ago I'm being told that my "grandfather" time starts with the most recent PV install which was April 2021. This was the consensus of the solar support folks that the agent I was talking to consulted. They said they will double check and have someone call me, so far I haven't heard anything back.

Here is what I have and the status that I got from PG&E

2002 - 10 kW: PG&E seems to have completely forgotten about this this system. As far as they are concerned it doesn't exist
2008 - added 2.1 kW: NEM 1.0 (this seems to be oldest record they have for me)
2018 - 2 Powerwalls added, went onto NEM-MT. It appears that I'm basically on NEM 2.0 at this point. The 2008 is system recorded as 2.7 kW. It appears the my PTO date for the entire system for NEM purposes is reset to this date.
2021 - Added 4 kW of solar plus another Powerwall. I'm told April 2021 is my PTO date for grandfathering purposes.

Obviously the missing 10 kW is feature in NEM 3.0 solar tax world. It had been an issue before where my export credits were being limited. But with non-bypassable (NBCs), self consumption solves the problem with no cost penalty.

I'm not sure I want to depend on the system being lost. Right now the most important thing is determining the PTO date for grandfathering purposes. If @RKCRLR and I are being told is true then we will avoid the worst of NEM 3.0 for at least 10 years, possibly more.

I'm hedging my bets and I'm researching my options for replacing the 10 kW system (Is "Project Solar" the cheapest solar out there? Are they any good?)

Hopefully PG&E won't find the records for that 2002. If they do you'll be looking at going to NEM3 this year.

 

[sunwarriors]

It's not expected, but makes sense to me sadly. Sorta like if someone had a massive install, is on year 19, just put 11% more panels, extend the whole system for another 20 years...sounds a bit crazy and lopsided. I think most of us would agree NEM1.0/2.0 is very benefical for most homeowners.

That said, they should allow folks to pay some $$ now and install a separate meter if they want the upgraded section on NEM2.0. I'm sure installers didn't spell it out and verbally just said what was most beneficial for the customer to get the install done. Utilities obviously have no clue neither as they give out wrong answers and a lot of us (me included), just figured it'd extend (which sounds lopsides to me).

The letter matches the FAQ you/someone else posted earlier.

If installing a new meter for a couple thousand is allowed, everyone should do that if their upgraded system was big enough. That seems the most fair to me.

With all this NEM3.0 talk, I'm sure a lot of folks are now wondering and the utilities are probably reviewing more install docs possibly.