Highlights

  • Identified obstacles and relevant solutions associated with the currently underutilized Virtual Net Metering (NEM-V) tariff in order to expand PV adoption beyond traditional commercial and single-family rooftop systems.
  • Researched and documented the policy and structure of the NEM-V tariff.
  • Developed and implemented a one-year pilot program to raise regional awareness of the NEM-V tariff, identify local barriers to adoption, and facilitate solutions to these barriers.

Background

California is a solar market leader largely due to innovative policies and  programs fostered at state and local levels. Despite the many successes of the California solar market, there are portions of the market that still lack easy access to solar energy. Expanding solar PV adoption outside traditional commercial or single-family rooftop systems remained a challenge because renters or businesses in multi-tenant structures typically have no authority to install solar on their buildings.

California features one of the few VNEM tariffs in the country, which allows kilowatt hour credits from one solar system to be distributed to numerous utility accounts throughout the property based on a predetermined allocation arrangement. The VNEM tariff addresses one of the costliest barriers to installing solar PV systems by eliminating the need for a separate inverter for each meter in multi-metered buildings.

The VNEM tariff, initially developed through the California Solar Initiative’s Multifamily Affordable Solar Housing incentive program, was expanded from solely low-income buildings to general-market multi-tenant and multi-meter residential, commercial, and industrial properties. This expansion, however, came with additional site eligibility restrictions, a policy known in California as NEM-V. A lack of understanding and awareness among customers—combined with issues of utility transparency regarding site qualifications and historic utility consumption data—have prevented wider use of this tariff. While NEM-V may hold tremendous opportunity for California’s three million apartment buildings, only a small number of projects have been completed in the state.

The Center for Sustainable Energy (CSE) set out to expand the awareness, effectiveness, and use of NEM-V in California and beyond. The project team engaged with solar contractors across California, regulators at the California Public Utility Commission, utility interconnection departments, and key customer segments—including commercial property management associations and multifamily property owners—to identify, catalog, and resolve the barriers to widespread VNEM adoption.

Summaries and Market Assessments

As part of their work, CSE published two important research documents that can be leveraged by California and jurisdictions in other states to provide insight into the policy background and structure for the VNEM tariff, best practices in application, eligibility, regulatory considerations, and replicable tariff outreach models.

In 2015, CSE, together with the Interstate Renewable Energy Council and the California Solar Energy Industries Association, released the Virtual Net Metering Policy Background and Tarif Summary Report. This summarizes the policy background that led to the inception of the NEM-V tariff, the uptake per investor-owned utility territory in California, eligibility requirements, application processes, and associated costs, and similar NEM-V or shared solar programs offered in other states.

The California NEM-V Market Assessment provides an overview of the current state of the NEM-V market in California and identifies potential market developments that could expand NEM-V adoption. Through in-depth interviews with market stakeholders, surveys, and data collection, the CSE team established findings related to the market potential for statewide NEM-V adoption, the current adoption levels, and the building types currently utilizing the tariff.

Resources

Report:
Virtual Net Metering Policy Background and Tariff Summary Re... Virtual Net Metering Policy Background and Tariff Summary Report
Author:  CSE

This report summarizes California’s Virtual Net Metering Tariff for general market multi-tenant units and provides an overview of VNM and community solar policies across the country.

Report:
California NEM-V Market Assessment California NEM-V Market Assessment
Author:  CSE

This report assesses the current NEM-V Market within CA and highlighting potential market developments that could support greater NEM-V adoption throughout the state.

Pilot Study

Report:
Virtual Net Metering Market Development Pilot Study Summary Virtual Net Metering Market Development Pilot Study Summary
Author:  CSE

This summary outlines the goals of the Santa Monica, CA pilot study, focusing on NEM-V tariff outreach, technical, and administrative assistance efforts in a targeted region.

CSE, in collaboration with the city’s Solar Santa Monica Initiative, launched a pilot program in Santa Monica in 2016 to improve awareness of the NEM-V tariff throughout the Southern California Edison service territory. CSE published the Virtual Net Metering Market Development – Pilot Study Summary outlining the goals of the study and announcing the selection of Santa Monica as the pilot study site. Working with a select group of local solar developers called Friends of NEM-V, the project team hosted contractor training working groups to identify barriers to NEM-V tariff deployment. Working groups identified rent-control regulations as a major challenge because property owners would be precluded from receiving additional funds—such as solar credits and payments—from tenants each month. The team is developing guidance on overcoming barriers posed by rent-control regulations, to be released in late 2017.

 

Multifamily Toolkits and Development Plan

The CSE team created multifamily solar toolkits for contractors and multifamily property owners. These toolkits feature roadmaps, checklists, and worksheets to guide apartment and condominium communities on going solar. Contractor toolkits include interconnection resources, as well as a group of interactive multifamily density maps for targeting outreach regions and acquiring customers.

At the end of 2016, the team released the Multifamily Solar Market Development Plan as a tool to help districts with underutilized VNEM programs bolster the market and to inform policymakers in California and across the country of best practices for designing effective VNEM options for customers, contractors, and utilities. This plan applies lessons learned from the Santa Monica pilot program and explores customer engagement tactics, educational approaches, policy development considerations, and plans to spur efficient strategies for enabling installations.

The team is currently implementing this Multifamily Solar Market Development Plan through statewide outreach campaigns and educational workshop series, as well as an online solar marketplace that will facilitate more multifamily solar installations. Together with EnergySage, CSE launched an online marketplace for multifamily building owners to learn more about solar and to connect with solar contractors. This site offers a simple process for complex multifamily solar projects, with resources and assistance to help make smart solar decisions. The EnergySage Solar Marketplace helps property owners gather and compare solar quotes with ease to make the transition to solar simple.

Resources

Tool:
Multifamily Solar Market Development Plan Multifamily Solar Market Development Plan
Author:  CSE

This plan is intended to help policymakers, regulators, local governments, multifamily stakeholders and others in CA and beyond to expand multifamily solar in their jurisdictions.