Why Are My NEM Charges So High?

Ever wondered why your NEM charges are so high even with solar panels? Let's break down how Net Energy Metering (NEM) works and what might be driving those costs up.

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How Net Metering Works

Net Energy Metering (NEM) is like a give-and-take system with your utility company. When your solar panels crank out more juice than you need, the extra power goes back to the grid, and you earn credits. These credits can then offset your future electricity use.

NEM can slash your energy costs and sometimes even give you a zero or negative balance on your bill. For more nitty-gritty details, check out our net energy metering article.

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Why Are Your NEM Charges So High?

Ever wondered why your Net Energy Metering (NEM) charges are through the roof? Let's break it down so you can get a grip on your energy usage and save some bucks.

Here are some big reasons why your NEM charges might be higher than you expected.

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1. Changes in NEM Policies (NEM 2.0 and NEM 3.0)

• Time-of-Use Rates (TOU): Many utilities now require NEM customers to be on TOU rate plans, where energy costs vary by time of day. If you're using electricity during peak hours (typically late afternoon to evening), you’ll pay much higher rates for grid energy, even if you produce enough during the day.
• Reduced Export Credit Rates: Newer policies (like NEM 3.0 in California) often lower the value of the credits you earn for sending excess power to the grid. This means you’re getting less compensation for the solar energy you export, increasing your overall costs.

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2. Solar System Size and Design Issues

• Undersized Systems: If your solar panels were designed to cover less than your total annual usage (perhaps based on past energy habits), they may not generate enough energy to meet your current needs, leading to higher grid reliance.
• Shading or Inefficiency: Shading, dirt, or equipment degradation can reduce system output, increasing the gap between what you produce and what you consume.

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3. Utility Fees and Non-Bypassable Charges (NBCs)

• NBCs: Even with solar, utilities charge fees for services like grid maintenance, public programs, and wildfire prevention. These charges are applied to all energy pulled from the grid and often cannot be offset with solar credits.
• Minimum Bill Requirements: Some utilities require NEM customers to pay a minimum bill or additional fixed charges, regardless of solar credits or usage.

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4. Overconsumption During Cloudy or Winter Months

• Seasonal Mismatches: Solar systems often overproduce in summer and underproduce in winter. If your system can’t generate enough in low-sunlight months, you’ll pull more energy from the grid, increasing your charges.
• Misaligned Usage Habits: Using energy-intensive devices during times when your panels aren’t generating (like at night) forces reliance on grid energy, which may be charged at peak rates.

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Want to see how your energy habits have changed since you got solar panels? Check out our comparison of electric bills before and after solar panels. It’ll show you where you can make some tweaks to save more.

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Pro Tips to Lower Your NEM Charges

• Install a Battery: Store excess solar energy for later use and minimize reliance on grid electricity during peak hours.
• Optimize Appliance Use: Shift energy-hungry activities to off-peak times.
• Perform System Maintenance: Regularly clean and inspect your solar panels to maximize production.
• Upgrade System Size: If feasible, consider adding more panels to match current usage habits.

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Try running your big appliances during off-peak hours to take advantage of lower rates. For more tips on managing your energy, check out our article on why your distribution charge is so high.

Understanding these factors can help you get a handle on your NEM charges and make the most of your solar energy system. For more info on NEM, dive into our articles on net energy metering, NEM 2.0, and NEM 3.0.