Top Takeaways
1-to-1 Net Metering
The NEM Anniversary True-Up Month may be changed one time
1-to-1 Net Metering
New Jersey's net metering policy requires all major utilities to provide 1-to-1 net metering. Net metering is when the utility subtracts or "nets" excess production with consumption in the same monthly billing cycle at the same price per kilowatt-hour ($/kWh) they charge, called the retail rate.
Each kilowatt-hour (kWh) the solar system produces will first power your home. Any excess solar energy sent to the utility grid will receive a kWh credit on your electric bill. Production and consumption will offset each other 1-to-1. Any excess kWh credits will rollover month to month until you need them in a 'NEM bank.'
If you choose to receive electric generation from third-party supplier, in NJ, the supply charges will also be credited 1-to-1.
Remaining Utility Bill
Even if solar provides 100% of your electricity needs, you will still have a utility bill to recover fixed customer charges that all consumers contribute to operate the grid ($5-$8 per month). In addition, you will have a separate LightReach bill for the solar system production.
Anniversary Month
Excess NEM credits will rollover month to month until your consumption exceeds your production, or until your Anniversary Month. This is also called the Annual True-up or 12-month period. If you have excess credits during your Anniversary Month, they will be credited to your account (or a check issued), at a low wholesale cost of power (~3-5 cents per kWh). Then, your NEM bank is set back to 0 kWh credits.
Your Anniversary Month defaults to the date your utility granted Permission to Operate the solar system, which is usually 1-2 months after the installation.
You may contact your utility to change the Anniversary Month ONE TIME.
For most homes, February is ideal.
February is often an ideal Anniversary Month because spring, summer, and fall months typically have more kWh credits rolling over than winter. A February true-up month gives your home time to consume excess credits in the winter months, (saving the ~20 cent retail rate), when solar production is low due to shorter and cloudier days.
In the example illustration below, April through August is estimated to produce kWh credits, which can then be used to offset net consumption starting in October.
If February or March is selected as the Anniversary Month, then the homeowner would have time to utilize their banked NEM credits before the true-up.
A Summer month true-up would not be ideal, as too many NEM credits would be credited at the low wholesale rate.
To play it safe, Palmetto LightReach recommends watching your utility bills for at least 12 months with net metering before deciding which Anniversary Month is best for yourself, since the utility will only allow you to change it once.
“The best month for your Anniversary True Up is the month before you begin to accumulate the most electricity credits to use towards months in which you may need electricity from us.” - PSEG NJ
Sample NEM Bill
Sample Anniversary Month Bill
Sample Anniversary Month Bill
In this Atlantic City Electric bill, the Anniversary Month is July. The customer consumed 527 kWh (net consumption) that month. Since they had 1340 kWh in the NEM bank, they were only charged the fixed Customer Charge $6.88.
If this were not the Anniversary Month, then 813 kWh credits would rollover to be used in the future.
Since this is the Anniversary Month, 813 kWh were credited to the account for -$42.03 (or 5.1 cents per kWh). This is a significantly lower credit value than offsetting the next month's usage at the retail rate. The customer should contact the utility to change their Anniversary Month to February.
FAQs
1. Will I receive SRECs?
1. Will I receive SRECs?
No. As the system owner, Palmetto LightReach owns the SRECs and all incentives. These incentives enable us to provide lower rates on your Power Purchase Agreement (PPA).
2. How do Time of Use rates work with NEM?
2. How do Time of Use rates work with NEM?
In New Jersey, each Time-of-Use period has its own Energy Credit Bank. Excess generation during a "Peak" period is credited to the "Peak" period energy bank, and can only offset future "Peak" period usage. Similar energy banks are created for other periods. “Peak” and “Off Peak” energy banks cannot be combined.
Palmetto LightReach does not recommend Time of Use (TOU) rates with NEM in New Jersey as it is likely you will end up with a large On-Peak bank balance while being charged for Off-Peak consumption.