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Get a Read On Net Energy Metering

House with solar panels

Net Energy Metering

Customers with solar panels should enroll in our Net Energy Metering (NEM) rate option. We’ll deduct the energy you export to the grid at times when generation exceeds on-site demand from your bill, and you may even earn surplus credits.

Net Energy Metering Watch Video   NEM Cap Data

The Current NEM 1.0 Program

SCE customers who produce their own electricity, have eligible renewable energy generation systems connected to SCE’s system (interconnected) and meet program requirements, are eligible for a rate option called Net Energy Metering (NEM). The NEM option allows you to receive a credit for the surplus electricity you supply to the electric grid. This credit will then be applied to your energy bill, to offset all or part of the costs associated with the energy you consume each month.

To be eligible for the current NEM 1.0, your system must be sized to your historic electric use and cannot exceed 1,000 kilowatts.

Plug-in generation systems that have the ability to interconnect onto the customer’s facility electrical system through an electrical outlet are not approved to operate in parallel with SCE’s Distribution Grid. These types of interconnections pose a safety and reliability concern to the public and SCE employees due to the ability of the end user to move the plug and play generator to any electrical outlet, thereby, violating NEC code 705.12(D)(1).


How to Request Interconnection for NEM

Step 1: Submit an Application (Your contractor will probably do this on your behalf)

NEM 1.0 Online Interconnection Application System
Program Application Documents
NEM Checklist
Generation Meter Adapter Fact Sheet
Users Guide for the Online Interconnection Application System
NEM Fact Sheet
NEM Standard Interconnection Workshop Materials 
NEM Non Standard Interconnection Workshop Materials

Step 2: Understand Your NEM Bill after Receiving Interconnection Approval

Understanding Your NEM Bill (Domestic and Small Business Accounts)
NEM Fact Sheet

Step 3: Understand Net Surplus (NSC) and Renewable Energy Credits (REC) Compensation
Request REC compensation after ownership transfer of your REC certificates for Only the REC’s created by your Net Surplus Energy
NSC Compensation Rate
REC Compensation Rate
NEM Fact Sheet

NEM 1.0 Programs

Standard NEM 1.0

The NEM program uses a bi-directional meter to track the "net" difference between the amount of electricity you produce and the amount of electricity you consume during each billing period. This can be accomplished on a cumulative basis or on a time-of-use basis, depending upon your rate schedule.

As a Residential/Small Commercial NEM customer, you will continue to receive monthly bills, but only for non-energy related charges such as taxes and fees. On an annual basis, you will be billed for electricity based on your net use for the previous year – for example, the amount of electricity you used minus the amount you generated. Large Commercial/Industrial NEM Customers will continue to receive monthly bills, which will require payment of the monthly non-energy related charges (taxes and standard billing fees) and “Net” energy charges.

For SCE customers who install renewable energy system using:

  • Solar Photovoltaic
  • Wind
  • Fuel Cell1
  • Biogas
  • Biomass
  • Digester Gas
  • Geothermal
  • Hydroelectric up to 30 MW2
  • Landfill Gas
  • Municipal Solid Waste Conversion3
  • Ocean Thermal
  • Ocean Wave
  • Solar Thermal
  • Tidal Current


1 To qualify for standard NEM, a fuel cell system must be powered solely with renewable fuel. 
2 A “small hydroelectric” generating facility is not an eligible renewable generating facility if it will cause an adverse impact on in stream beneficial uses or cause a change in the volume or timing of stream flow.
3 Qualifying “solid waste conversion” is defined pursuant to Public Resources Code Section 25741(b)(3).

NEM 1.0 with a Paired Energy Storage Device

For an NEM eligible generator that has an integrated or directly connected energy storage device (e.g., a battery) behind the same revenue meter.

NEM 1.0 Aggregation

An eligible NEM customer-generator with multiple meters can elect to aggregate the electrical load of the meters located on the property where the Renewable Electrical Generating Facility is located and on all property adjacent or contiguous to that property, provided those properties are all solely owned, leased or rented by the eligible customer-generator. Under NEM Aggregation, the renewable generating facility must be sized to not exceed the annual on-site load of all the aggregated accounts and must have a total generating capacity of not more than one megawatt (MW).

Fuel Cell NEM

For SCE customers on a Time-of-Use (TOU) rate who:

  • Install a system using technology that the CPUC has determined will achieve reductions in emissions of greenhouse gases pursuant to subdivision (b) of PU Code § 2827.10, and
  • Meets the emission requirements for eligibility for funding set forth in subdivision (c) of PU Code Section 379.6, and
  • Commence operation on or before January 1, 2015.


Virtual Net Metering (VNM) 1.0

Virtual Net Metering (VNM) allows energy produced by a renewable generating facility to be credited to individual tenant and/or common area utility accounts.

We offer two VNM options: Schedule NEM-V (Virtual Net Energy Metering for Multi-Tenant and Multi-Meter Properties) and Schedule MASH-VNM (Multifamily Affordable Solar Housing Virtual Net Metering). Schedule NEM-V is available to an owner or operator of a multi-tenant, multi-meter property where the owner or operator elects to allocate a percentage of the total metered output of a renewable generating facility to service accounts that are located behind the same Service Delivery Point (SDP) as the renewable generating facility, which are referred to as “Benefitting Accounts”1. Schedule MASH-VNM is available to owners or operators of multifamily affordable housing properties where tenants are individually metered by us. Solar energy produced by the solar generating facility is credited to common area and/or tenant service accounts, as designated by the owner or operator, that are located at the same income-qualified residential complex as the solar generating facility.

Learn more about VNM 1.0


1 SDP is as defined in SCE’s Rule 16, where SCE's Service Facilities are connected to either the Owner or Operator’s conductors or other service termination facility designated and approved by SCE. Customer-owned line extensions that deliver power to other meters on the same property are not considered separate SDPs.


General Market

The NEM-V Rate Schedule allows energy produced by a renewable generating facility to be credited to individually metered tenants who are connected at the same service delivery point1

1 For purposes of VNM service the Service Delivery Point (SDP) is defined as the point where the distribution extension line drops from the utility’s primary distribution lines to deliver power to the customer. Extension lines that deliver power to other meters on the property are not considered separate service delivery points.

The combined capacity of generator(s) is limited to the cumulative coincident peak load of all Benefitting Accounts.

Multifamily Affordable Solar Housing (MASH)

The Multifamily Affordable Solar Housing (MASH) program, part of the California Solar Initiative (CSI), is designed to subsidize PV systems in multifamily housing which will offset electricity loads and provide economic benefits for housing property owners and managers as well as building tenants. Learn More about the MASH program.

The MASH-VNM Rate Schedule allows MASH program participants to apply the credits from a single solar system to multiple accounts at an eligible low income building.

NEM 1.0 – Military (Senate Bill 83)

On February 10, 2016, SCE’s Advice Letter 3282-E “Tariff Modifications Necessary to Implement the NEM Provisions of Senate Bill (SB) 83 for the U.S. Armed Forces” was approved by the California Public Utilities Commission with an effective date of November 1, 2015.

SB 83 expanded the definition of an NEM Eligible Customer-Generator to include an establishment under the jurisdiction of the United States Army, Navy, Air Force, Marine Corps or Coast Guard (hereinafter referred to as an “Armed Forces base or facility”) when using a renewable electrical generation facility (REGF), or a combination of those facilities, with a total capacity that does not exceed the lesser of (a) 12 megawatts (MW) or (b) 1 MW greater than the minimum load of the Armed Forces base or facility over the prior 36 months.

The statute includes the following additional provisions, which are applicable only to NEM Eligible Customer-Generators as newly defined under Section 2827(b)(4)(C):

  • The REGF must be located on premises owned, leased or rented by the Armed Forces base or facility, be interconnected and operate in parallel with the electrical grid, and be intended primarily to offset part or all of the Armed Forces base or facility’s own electrical requirements.
  • Unless prohibited by federal law, a REGF shall not be eligible for NEM for privatized military housing if the REGF was procured using a sole source process. A REGF procured using best value criteria, if otherwise eligible, may be used for NEM for privatized military housing.
  • The Armed Forces base or facility shall not receive compensation for exported generation.
  • Notwithstanding paragraph (2) of subdivision (e) of Section 2827,2 an electrical corporation shall be afforded a prudent but necessary time, as determined by the executive director of the California Public Utilities Commission (Commission or CPUC) but not less than 60 working days, to study the impacts of a request for interconnection of an REGF with a capacity greater than 1 MW.
  • If the study reveals the need for upgrades to the transmission or distribution system arising solely from the interconnection, the electrical corporation shall be afforded the time necessary to complete those upgrades before the interconnection and the costs of those upgrade projects shall be borne by the NEM Eligible Customer-Generator.
  • Upgrade projects shall comply with applicable state and federal requirements, including requirements of the Federal Energy Regulatory Commission (FERC). For any REGF that interconnects directly to the transmission grid or that requires transmission upgrades, the Armed Forces base or facility shall comply with all FERC interconnection procedures and requirements.
  • An electrical corporation shall make a tariff, approved by the Commission, available to implement these new NEM provisions for an Armed Forces base or facility by November 1, 2015.


For questions regarding the NEM Provisions of Senate Bill 83 for the United States Armed Forces, please email NEM@sce.com.

Additional Information

Have Questions about your NEM application? See FAQs

Metering & Rates

For NEM customers, SCE provides a meter capable of measuring energy flow in two directions, known as a bi-directional meter. SCE will reprogram (Smart meters can be programmed to be bi-directional) or swap your meter as needed at no charge after receiving a complete NEM application, or apply a credit based on estimated generation during any delay.

Direct Access Customer Eligibility

As of June 23, 2013, Direct Access (DA) customers are eligible to request and receive service on our Net Energy Metering (NEM) rate schedule.

Prior to June 23, 2013, DA customers were only eligible to receive monthly Generation credits from their ESP, if offered. Now, DA customers are also eligible to receive monthly Delivery Service energy credits, when applicable, from us. However, DA customers remain ineligible to receive net surplus compensation (NSC) from us at the end of their NEM Relevant Period.

In order for a DA customer to be served on our NEM tariff and receive Delivery Service credits from us, their ESP must also offer an NEM rate - which will be verified by our Customer Choice Services (CCS) organization.

DA Service Accounts with NEM Interconnection Agreements approved after June 23, 2013 will be placed on Schedule NEM effective with the date that Permission to Operate is issued and/or metering upgrades are completed.

DA Service Accounts that installed NEM-eligible generating facilities prior to June 23, 2013 must submit a rate change request to be placed on our NEM tariff. After ESP approvals and/or metering upgrades are completed, our NEM tariff will be established on a going forward basis from the approval date of the rate change request. Any applicable Delivery Service credits will be calculated and applied by us on our monthly billing statement. Similarly, any applicable Generation credits will be calculated and applied by the ESP on their monthly billing statement.

For additional information, please call us at 1-800-799-4723.

Option R Tariff

Effective January 1, 2015, the enrollment cap for Option R of Rate Schedules TOU-GS-2, TOU-GS-3 and TOU-8 was increased from 150 MW to 400 MW. As a result, customers meeting the eligibility requirements for Option R may now have their eligible accounts placed on this rate option after receiving written Permission to Operate (PTO) their Generating Facility from SCE. Customers cannot “reserve” capacity under the Option R enrollment cap prior to receiving PTO.

Customers receiving service under the TOU-8 Option A Special Solar Allowance may request to take service on Option R beginning January 1, 2015, and will not be subject to the 12-month requirement of Rule 12, Section D.2.a provided they transition prior to July 1, 2015.

Interested customers should work with their SCE Account Representative to receive an Option R rate analysis so that they can ascertain the how the rate option may impact them. Customers who request to move forward with receiving service on Option R should complete and submit Form CSD-179-A, Request for a Change of Rate Schedule to MCB SPOCs .

Additional Information

To qualify for Option R tariff, your account must meet the following eligibility criteria:

  • Account must have annual peak demands greater than 20 kilowatts (kW) but not exceeding 4 MW
  • Account must have an approved generating facility interconnected that is powered by solar, wind, fuel cells or other eligible onsite Renewable Distributed Generation Technologies as defined by the CSI or SGIP
  • Eligible generating facilities must have a net renewable generating capacity equal to or greater than 15 percent of the customer’s annual peak demand, as recorded over the previous 12 months
  • For customers without 12 months of demand data, SCE will determine the annual peak demand once the customer has three months of demand data
  • Account must qualify for service under Rate Schedules TOU-GS-2, TOU-GS-3 or TOU-8
  • No other non-renewable generators on site
  • Permission to Operate (PTO) letter issued

Option R will be closed to new service accounts when the 400 megawatts (MW) enrollment cap is reached. After the 400 MW cap is reached, service accounts placed on Option R cannot increase the generation system size above what was previously approved. If the generation system size is increased, the account will be removed from Option R.

Below is the cumulative total.

Option R Tariff
(Date as of December 15, 2016)
Approved to Transition to Option R Tariff (MW) Available Megawatts
261.59 138.41

This figure is currently updated quarterly. The frequency of the updates will increase as the available capacity decreases.

Net Energy Metering Cap Data

Legislation (Assembly Bill 327) passed in 2013 requires large electrical corporations to file a monthly report with the CPUC detailing the progress toward meeting the NEM program limit established in Public Utilities Code Section 2827. The information filed monthly with the CPUC is also posted below for reference purposes. The NEM program limit is currently set at five percent (5%) of each large electrical corporation's aggregate customer peak demand, and for SCE may never be lower than 2,240 MW.

View report here >

NEM Monthly Growth

Recent historical approved monthly interconnections. Learn more

Get Ready for NEM 2.0

The current Net Energy Metering 1.0 program will soon be closing to new customers, either on July 1, 2017 or earlier if SCE reaches its 2,240 MW NEM 1.0 program limit. At this time, we do not expect to reach the cap before July 1, 2017, but you can check status on an ongoing basis. Applications are considered eligible for NEM 1.0 only if:

  1. All documentation needed to provide approval for Permission To Operate (PTO), is submitted to SCE by 11:59 p.m. on June 30, 2017. Granting of PTO itself is not required on or before this date, but all documentation must be received and acceptable by this date.
  2. The cap has not been reached.

Customers who are already participating in an NEM 1.0 program (i.e., Net Energy Metering (NEM), Virtual Net Energy Metering for Multi-Tenant and Multi-Meter Properties (NEM-V), Multifamily Affordable Solar Housing Virtual Net Metering (MASH-VNM), or NEM Aggregation (NEM-A)) will be allowed to continue taking service on their current program for a transition period of up to 20 years before they will be transitioned to a new program.

Note: The transition period is directed by the California Public Utilities Commission (CPUC), pursuant to Assemble Bill 327 and CPUC Decision 14-03-041.

Differences Between NEM 1.0 & 2.0

  NEM 1.0 NEM 2.0
Retail Rate Credit for Export Yes Yes
Grandfathering Period 20 Years 20 Years
Nonbypassable Charges (NBCs) Based on the "netted out" quantity of energy consumed from the grid Based on the "netted out" quanity of energy consumed in each metered interval**
1 MW-AC System Cap Yes*, but the system must be sized to the customer's onsite load No, but the system must be sized to the customer's onsite load
Interconnection Fee Waived Yes,
$75 for systems 1 MW-AC or less
$800 for systems > 1MW
Mandatory TOU Rate No Yes, certain exceptions apply***


*Schedule NEM includes provisions for the California Department of Corrections and Rehabilitation (CDCR) and Armed Forces (including United States Arny, Navy, Air Force, Marine Corps or Coast Guard) that allow these entities to exceed the 1 MW system cap.

**Calculation of NBCs for MASH-VNM, NEM-V and NEM-Agg is based on each kWh consumed from the grid or Channel 1 (imports only).

***The exception only applies to residential customers who do not have a TOU rate available to them (e.g., master-metered customers served on a DM/DMS rates)

Nonbypassable Charges - For the purposes of the NEM Successor tariff, the relevant NBCs are: Public Purpose Program Charge; Nuclear Decommissioning Charge; Competition Transition Charge; and Department of Water Resources bond charges.

NEM 2.0 Mandatory Time-of-Use (TOU) Rate Requirement for Residential Customers

As a requirement for participation in NEM successor tariff (“NEM 2.0”) programs, residential customers must take service on a TOU rate.* You will be billed on Schedule TOU-D, Option A (TOU-D-A) unless you elect to switch to another TOU rate option for which you are eligible. Learn more information on the various TOU rate options available to you. If you would like to select a TOU rate other than TOU-D-A, please call us at 1-866-743-1645. Keep in mind that if you do switch to another TOU rate option that you are eligible for, you will not be able to switch your rate plans again for 12 months.

With a TOU rate plan, the price of electricity varies by time-of-day and with the season. When you’re able to reduce your usage during on-peak hours (i.e., highest priced periods) or shift your usage to lower cost periods, you can potentially save money and better control your monthly electricity bill. View the time periods for each TOU rate options.

*There is one exception to the mandatory TOU requirement for residential customers who have no TOU rates available to them (e.g., master-metered customers served on a DM/DMS rates).

Note: the mandatory TOU requirement also applies to all non-residential customers served on NEM 2.0 programs, but non-residential customers have been required to be on mandatory TOU rates since at least 2015.

NEM Successor Tariff (NEM 2.0) Application Documents

In accordance with Resolution E-4792, SCE is making the NEM Successor Tariff ("NEM 2.0") interconnection documents available effective September 1, 2016.

How to Apply for Interconnection under NEM 2.0
All NEM 2.0 Interconnection Applications must be submitted online using the NEM 2.0 Interconnection Online Application System. Please note that there are two concurrent NEM Interconnection Application online systems available (i.e., one for NEM 1.0 interconnection requests and another for NEM 2.0 interconnection requests). Please make sure that you are in the correct online application system.

Start the application process here: NEM 2.0 Interconnection Online Application System

The customer or applicant will be required to pay an interconnection fee. For an interconnection request where the total generating capacity is 1 MW or smaller, the fee is $75. For an interconnection request above 1 MW, the fee is $800.

Until an electronic payment option is available, interconnection fee payments must be paid via check made payable to Southern California Edison. An interconnection fee invoice with instructions for payment will be sent to the applicant once the application has been received.

Note, although SCE will accept and process NEM 2.0 interconnection requests prior to the date that NEM 2.0 is effective in our service territory, SCE will not be able to issue a Permission to Operate for these generating facilities until the earlier of SCE hitting its 2,240 megawatt (MW) NEM 1.0 cap or July 1, 2017.

Interconnection Documents

Customers interconnecting a NEM 2.0 generating facility sized >1 MW must enter into one of the following interconnection agreements, as applicable:

  • Form 14-971, Multifamily Affordable Solar Housing Virtual Net Metering and Generating Facility Interconnection Agreement for Generating Facilities Sized Greater Than One Megawatt
  • Form 14-972, Generating Facility Interconnection Agreement for Multiple Tariffs Using a NEM-ST Generating Facility Sized Greater Than One Megawatt
  • Form 14-973, Virtual Net Energy Metering For Multi-Tenant and Multi-Meter Properties Interconnection Agreement For Generating Facilities Sized Greater Than One Megawatt
  • Form 14-974, Southern California Edison Company Net Energy Metering and Renewable Electrical Generating Facility Sized Greater Than One Megawatt Interconnection Agreement

Customers interconnecting a NEM 2.0 generating facility sized ≤1 MW must enter into one of the following interconnection agreements, as applicable:*

  • Form 14-653, Multifamily Affordable Solar Housing Virtual Net Metering and Generating Facility Interconnection Agreement for Generating Facilities Sized One Megawatt and Smaller
  • Form 14-773, Generating Facility Interconnection Agreement Multiple Tariffs
  • Form 14-909, Virtual Net Energy Metering for Multi-Tenant and Multi-Meter Properties Interconnection Agreement for Generating Facilities Sized One Megawatt and Smaller
  • Form 16-344, Southern California Edison Company Net Energy Metering and Renewable Electrical Generating Facility Interconnection Agreement for Generating Facilities Sized One Megawatt and Smaller

*There is no benefit for customers with generating facilities sized ≤1 MW to apply early for the Successor Tariff. Instead, customers should apply for service under NEM 1.0 using the online application system.

The following additional forms may apply depending on the interconnection request:

  • Form 14-654, Multifamily Affordable Solar Housing Virtual Net Metering Allocation Request Form
  • Form 14-910, Virtual Net Energy Metering for Multi-Tenant and Multi-Meter Properties (NEM-V and NEMV-ST) Allocation Request Form
  • Form 14-912, NEM Customer-Generator Warranty That It Meets The Requirements For An Eligible Customer-Generator And Is An Eligible Renewable Electrical Generating Facility Pursuant To Section 2827 or Section 2827.1 Of The California Public Utilities Code
  • Form 14-937, Net Energy Metering Aggregation Account Information
  • Form 556, Federal Energy Regulatory Commission’s (FERC) Certification of Qualifying Facility (QF) Status for a Small Power Production or Cogeneration Facility

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