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On December 15, 2022, the California Public Utilities Fee handed an overhaul of the net-metering program for the state’s investor-owned utilities. The modifications changed the long-standing web vitality metering (NEM) tariffs with a web billing tariff (NBT) construction — colloquially often known as “NEM 3.0” — which considerably reduces the compensation for behind-the-meter photo voltaic PV techniques. The NEM tariffs remained open for brand spanking new interconnection purposes till April 15, 2023, however after that date, all new interconnection purposes have been submitted beneath NBT. Now, one yr later, we now have a possibility to judge how the California photo voltaic market has developed beneath this new compensation regime.
As a precursor to its annual Monitoring the Solar report, Berkeley Lab has launched a brief technical temporary describing key tendencies within the California residential photo voltaic market because the roll-out of the brand new NBT construction. The aim of this evaluation is to supply empirical insights into how the market has developed over the previous yr, confirming some expectations whereas additionally revealing a number of placing surprises.
Key tendencies embrace the next:
- PV installs within the yr since NBT implementation (beginning April 15, 2023) have been roughly equal to the yr prior, however 80% have been NEM techniques related to the push of interconnection purposes submitted in the course of the a number of months earlier than (and put in after) the NEM tariffs closed.
- As anticipated, extra prospects are putting in storage together with PV, however the pivot has been fairly pronounced, with storage attachment charges leaping from roughly 10% beneath NEM to 60% beneath NBT.
- Maybe on account of that sudden enhance in demand, inflation-adjusted put in costs for paired PV+storage techniques rose by about 17% beneath NBT, relative to their stage beneath NEM (that is for host-owned techniques, inclusive of any loan-financing “vendor charges”).
- Most stunning has been the dramatic shift in photo voltaic adoption towards much less prosperous zip-codes. Although the explanations for this growth require additional exploration, it probably displays a bigger share of NBT techniques related to California’s photo voltaic mandate for brand spanking new properties, in addition to the rising results of packages and insurance policies to help photo voltaic and storage adoption by LMI households.
- One other outstanding shift has been the sharp enhance in third-party possession (TPO) charges, from 24% beneath NEM within the previous yr, to 44% beneath NBT, reversing what had beforehand been a gradual motion away from TPO. This may occasionally partly replicate exogenous components associated to excessive rates of interest and federal tax incentives, however can be in keeping with any underlying shift towards new building and fewer prosperous households, each of which have traditionally had greater TPO charges.
- As anticipated, PV techniques are smaller beneath NBT — by about 9% total and by 17% for techniques co-installed with storage. This shift is probably going pushed largely by the decrease compensation for grid exports offered beneath NBT, although techniques put in in new building and by much less prosperous households are usually smaller as properly.
- The installer market has change into extra concentrated beneath NBT, with the High 5 installers accounting for 51% of the market, in comparison with 40% beneath NEM (although most of that distinction is related to the state’s largest installer).
To make sure, not the entire tendencies described above will be attributed completely to NBT, as different vital components have additionally been at play, and this temporary knowledge abstract doesn’t try and parse out the consequences of the various drivers. However a minimum of on first look, NBT does seem to have already had important impacts on the California residential PV market. These impacts and others will little doubt come into sharper focus over the following yr, as soon as the NEM backlog is totally cleared and a “new regular” beneath NBT units in.
Information merchandise from Berkeley Labs
