With 2,374 MWs, California is a solar market leader and ranks first in the nation in installed capacity. This is largely due to innovative policies and programs fostered at state and local levels – programs such as the California Solar Initiative (CSI) and the Multi-family Affordable Solar Housing (MASH), or tariffs like the Net Energy Metering (NEM) which helps drive customer-sited or rooftop solar adoption. Despite all of these programs, expanding solar PV adoption outside of traditional commercial or single-family rooftop systems has been challenging for many solar markets, because renters or businesses in multi-tenant structures typically have no authority to install solar on the building they occupy. 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. Developed through the California Solar Initiative’s MASH program, 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 has since been expanded to general-market multi-tenant and multi-meter properties including residential, commercial, and industrial properties, however with additional site eligibility restrictions (NEM-V). A lack of clear understanding and awareness by customers, and issues with utility transparency regarding site qualifications and communication of historic utility consumption data, has prevented wider use of this tariff. While NEM-V may yield tremendous opportunity for California’s three million apartment buildings, only a small number of projects have been completed in the state.
Through their Solar Market Pathways project, the Center for Sustainable Energy (CSE) aims to expand the awareness, effectiveness, and use of NEM-V in California and beyond. The project team will engage solar contractors across California, regulators at the California Public Utility Commission, utility interconnection departments, and key customer segments, including commercial property management associations and condominium developers, to identify, catalog and resolve the challenges impeding widespread adoption of virtual net metering. As part of this process, CSE will implement a Pilot Project engaging both apartment buildings and condominiums in the multifamily sector in order to focus tariff outreach, technical, and administrative assistance efforts in a specific region. Lessons learned from the Pilot will be applied to the creation of a replicable market development model for state and national markets.
In June 2015, the CSE team, in partnership with project partners California Solar Energy Industries Association (CALSEIA) and the Interstate Renewable Energy Council (IREC), released the Virtual Net Metering Policy Background and Tariff Summary Report. This report summarizes the policy background that led to the inception of the NEM-V tariff, as well as provides a summary of the tariff including current uptake per IOU territory in California; eligibility requirements; application process; and associated costs; and similar NEM-V or “shared solar” programs offered in other states beyond California. This report was the result of a comprehensive research effort to document the current implementation of NEM-V in California’s three largest Investor-Owned Utility (IOU) territories as well as in other states.
The CSE team wrapped up 2015 publishing the California NEM-V Market Assessment. This report provides an overview of the current state of the NEM-V market in California, and identifies potential market developments that could lead to expansion in NEM-V adoption. Through in-depth interviews with market stakeholders, surveys, and the collection of data, the CSE team developed findings related to the market potential for NEM-V adoption statewide, the current levels of adoption, and the building types currently making use of the tariff. Future reports will delve deeper into the specific barriers to widespread NEM-V adoption.
Concurrent with the release of the Policy Background and Tariff Summary Report, CSE also published a summary of their proposed Virtual Net Metering Market Development – Pilot Study Summary, outlining the goals of the study and announcing the selection of Santa Monica, CA as the pilot study site. The pilot program is being run in collaboration with the city’s Solar Santa Monica Initiative, and will serve to facilitate understanding about the NEM-V tariff throughout the Southern California Edison service territory in order to improve awareness and understanding. Working with a select-group of local solar developers, Friends of NEM-V, the project team hosted contractor training working groups to identify challenges and barriers. From these working groups, rent-control regulations have been identified as a major barrier to NEM-V deployment due to property owners being precluded from receiving additional funds from tenants each month, such as solar credits and payments. The team is working to develop guidance for how to overcome these regulations.
The CSE team completed multifamily solar toolkits that include roadmaps, checklists, and worksheets to guide apartment and condominium communities in how to go solar. The toolkits provide guidance to apartment building property owners/operators, as well as condo owners and condo HOA communities and board members. The team is working to complete a Virtual Net Metering Market Development Plan that will serve as a tool to help inform policymakers in California – and across the country – of best practices for designing effective virtual net metering options that work well for customers, contractors, and utilities. The plan will also help contractors better leverage the NEM-V tariff to spur solar purchase in multi-tenant and multi-meter properties.