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General Net Energy Metering Questions

How does the Net Energy Metering program work?

Net Energy Metering (NEM) is a program designed to benefit our customers who generate their own electricity using eligible renewable technology.

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.

Standard Solar & Renewables NEM Fuel Cell NEM Virtual Net Metering
You receive credit at the same rate you would have been charged had you purchased the electricity from us. Read the NEM Rate Schedule. You receive credit based on the applicable energy rate of your time-of-use rate schedule. Read the FC-NEM Rate Schedule. You receive credit at the same rate you would have been charged had you purchased the electricity from us.
Read the NEM-V Rate Schedule.

Read the MASH-VNM Rate Schedule

For additional details, please refer to the NEM Fact Sheet (PDF).

What are the NEM program eligibility requirements?

To be eligible for NEM, your system must be sized to your historic electric use up to 1,000 kilowatts, located on your premises and interconnected to operate in parallel with our electrical system. We offer several NEM programs:

Standard Solar & Renewables NEM Fuel Cell NEM Virtual Net Metering (VNM)
For 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
For 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.
Under Virtual Net Metering, the owner or operator of a multi-tenant property designates the percentage of the total metered output of the generator or generators, to be allocated to each tenant service account known as ‘Benefitting Accounts’.

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.

3Qualifying “solid waste conversion” is defined pursuant to Public Resources Code Section 25741(b)(3).

Do you pay me money for excess energy I produce?

In accordance with Assembly Bill 920, signed into law on October 11, 2009, customers on the NEM Rate Schedule are eligible to receive compensation for net surplus electricity in 2011. For more information, see the AB290 FAQs below.

Are there any Incentive Programs available to Customers interconnecting a renewable generator under the Net Energy Metering program?


CSI is available to customers installing an eligible solar electric generating system with a nameplate rating up to 1000kW [CEC-A/C]. Incentives are paid either as a lump sum payment for smaller systems, or over the course of five years for larger systems. The program's two incentive payment types are:

Expected Performance Based Buy Down (EPBB): Pays a one-time lump sum payment ($ per watt) based on the system's estimated future performance. EPBB is available for systems under 30kW (CEC-AC) beginning in January 2010.

Performance Based Incentive (PBI): Payments will be made over a 5-year period on a monthly basis ($ per kilowatt-hour). As of January 2010 all systems >30kW (CEC-AC) must be on the PBI incentive structure.

For more information, visit our California Solar Initiative site.

NSHP is available to customers installing eligible solar photovoltaic (PV) systems on new residential buildings. The NSHP program provides two incentive structures, one for conventional or market rate housing and another for qualified affordable housing projects.

Additional information is available online on the NSHP website.

How do I apply for Net Energy Metering (NEM)?

Refer to NEM Documents and Forms for required documents by NEM program type, to download forms and other resources.

1. Submit the initial Application Packet. This will consist of the application, Single Line Diagram and Plot Plan. Please submit as early as possible, before the system is installed and the final inspection by the local building and safety department is scheduled. 

To expedite processing, we recommend you submit a signed NEM Interconnection Agreement with the Initial Application Packet.Notes:
We no longer require an original signature on The Interconnection Agreement for Renewable Technologies (Form 16-344) or The Agreement for Solar & Wind up to 10 kW (Form 14-923) so the signed Agreement may be faxed or mailed to us. For all other NEM programs, the original customer signature must be mailed to SCE NEM Program, P.O. Box 800, Rosemead, CA 91770. If we have not received a signed Agreement by the time we review the Application Packet, we will mail one to the customer to sign and return to us.

The individual signing the Interconnection Agreement must be duly authorized to bind the Customer of Record to its terms.

Residential customers: if the individual is not the person listed on the electric bill, they must be listed as a spouse on the service account. To add a spouse to an account, please call our Customer Service at 866-701-7868. Non-residential customers: unless the individual is an owner of a proprietorship, officer of a corporation, "director” or general manager of an agency, or an equivalent official. Please submit documentation showing the signature authority of the individual who does sign on behalf of the "Customer of Record."

2. Submit a copy of the Final Electrical Inspection and Approval from the local jurisdictional authority, typically the Building & Safety department, as soon as it is issued.

Application documents may be submitted via email to customer.generation@sce.com or by fax to 626-571-4272. As of March 31, 2011, we will no longer accept documents via mail except for original signed Agreements, when required, which may be mailed to:

Attn: NEM Program
SCE Customer Solar & Self-Generation
Southern California Edison
P.O. Box 800
Rosemead CA 91770-0800

Once your application packet has been reviewed and accepted, and the final electrical inspection of the system by the local building & safety department has been verified, you will receive a Permission to Operate (PTO) letter with an NEM tag for you to place on your meter to notify our field personnel about the presence of your generating system and as proof of your permission to operate.

For regulatory and safety reasons, your generating facility must not be interconnected prior to your receipt of the PTO letter and placement of the NEM tag on your meter. 

On June 22, 2011, we hosted an NEM Interconnection Paperwork webinar for employees of installers who handle interconnection paperwork. The webinar covered important tips and tools to avoid returns and speed through interconnection. View the webinar.

How long does the NEM application process take?

The NEM review process can take 2-5 weeks depending on the complexity of the system and how early in the process the paperwork is submitted.  

We strongly recommend that you submit the application, Single Line Diagram, Plot Plan, and signed Interconnection Agreement as early as possible, at least 30 days prior to scheduling an inspection by the local jurisdictional authority.   This allows ample time for us to evaluate program eligibility, conduct a technical review of the proposed system and initiate a meter change, if necessary.   With this approach, We will be ready to issue a Permission to Operate (PTO) letter quickly upon receipt of the final electrical approval issued by the local jurisdictional authority.

Within 30 days of the date we receive your complete application, you will be enrolled in the NEM program, which will include a meter change if one is required and transition to the appropriate NEM rate schedule.

What happens once I’m enrolled in the NEM program?

Once you are enrolled in the NEM program, you’ll continue to receive monthly bills listing non-energy related charges, such as taxes and fees. On an annual basis, your bill will also include ‘net’ electricity charges – i.e. charges for the amount of energy you used minus the energy you produced.

If you have additional questions about your meter or bill, please contact our Net Metering Customer Call Centers:

Residential Customers: 1-866-701-7868

Commercial Customers: 1-866-701-7869

What type of metering is required and do I have to pay for it?

All customers participating in Net Energy Metering (NEM) must have a bi-directional meter, one that measures electricity flow in two directions. If your current meter is not bi-directional, we will replace it with a bi-directional meter as part of enrolling you in an NEM program. Note: We charge Direct Access customers for meter replacement. 

I received my Permission to Operate (PTO) letter, but it took a while before I started receiving kWh credits. Why?

Within 30 days of the date SCE receives all required paperwork, you will be enrolled in the NEM program, which will include a meter change if one is required and you’ll begin to the billed on the NEM Rate Tariff.

I installed a solar system, why is my bill so high?

The weather conditions play a key role in solar generation system kWh production. If weather conditions are cloudy or rainy, the system will not generate as much as it would during clear and sunny conditions. You should also be conscious of the energy that you are using such as air conditioning, pool filters, etc. 

I’m moving into a house with a self-generation system already installed. What do I need to do to benefit from the NEM program?

If there have been no modifications to the original installed system, and the system size is less than 30 kW, you don’t need to do anything. You will be automatically enrolled in the NEM program, and you will receive additional information via mail.

If your system is > 30 kW, or modifications are made to the original installed system, you will need to sign a new NEM Interconnection Agreement (Form 16-344). If the system is over 3 years old, it must be inspected (Form 14-903) before you can enroll in the NEM Program. We will mail an Agreement and Inspection Form soon after you move in, or you can download the forms and email to customer.generation@sce.com

What is Virtual Net Metering?

Under Virtual Net Metering, the owner or operator of a multi-tenant property designates the percentage of the total metered output of the generator or generators, to be allocated to each tenant service account known as ‘Benefitting Accounts’.  The kilowatt-hours (kWhs) allocated to each Benefitting Account is subtracted from the tenant’s consumption resulting in a credit in the same manner as under Schedule NEM.  If kilowatt-hours (kWh) credits exceed kilowatt-hours (kWh) use, those credits are carried forward to the next billing cycle, until the conclusion of the tenant’s 12-month ‘Relevant Period’.  Learn More >

Changes to Net Energy Metering (NEM) Net Surplus Compensation Rate (NSCR)

What is AB 920?

Assembly Bill 920 (AB 920 – Huffman – Solar and Wind Generation) addresses several aspects of renewable energy in California, specifically the way we handle Net Energy Metering (NEM) net surplus generation. On October 11, 2009, Governor Schwarzenegger signed AB 920 into law. This changed the law that governs NEM for solar and small wind generators. Before the change, customers received no compensation at the end of their Relevant Periods for electricity exported to the grid beyond their own annual usage. As a result of AB 920, beginning January 1, 2011, customers can receive compensation for net exports to the grid at the time of their annual true up.

Who is affected by AB 920?

AB 920 applies to our Net Energy Metering (NEM) customers who produce solar, wind or hybrid energy (not biogas or fuel cell energy).

What is net surplus generation?

Net generation occurs when, over the course of your Relevant Period, your solar or wind generator exports more to the grid than you receive from us.

How can I tell if I have generated surplus electricity?

On your annual Relevant Period true-up statement, if the Total Energy Amount (kWh) is negative, you have generated surplus electricity and are entitled to compensation. If the Total Energy amount is positive, you used more electricity than you produced over the course of your Relevant Period.

How long will this program be in effect?

AB 920 has no identified end date at this time; however, the Legislature can make changes to any existing law, including AB 920, at any time.

How does AB 920 affect our NEM customers?

One provision of AB 920 directly affects SCE’s NEM customers by requiring SCE to offer compensation for any net surplus electricity that occurs during a customer’s Relevant Period. Customers must complete and return a Net Surplus Compensation Rate Selection Form (PDF) to receive compensation.

When will AB 920 take effect?

AB 920 provides that the program became effective as of January 1, 2011. The California Public Utilities Commission (CPUC), however, had to work with us to determine an appropriate Net Surplus Compensation Rate (NSCR) before we could begin compensating eligible NEM customers. We expect to begin compensating customers for their excess energy, retroactive to January 1, 2011, after the CPUC approves our regulatory filing, setting the NSCR sometime in 2011. We will notify eligible NEM customers when this occurs.

How did you handle surplus energy before AB 920 went into effect?

A customer’s NEM account has a designated Relevant Period of 12 months, based on the date the customer’s renewable energy generation system was interconnected to our system. Before AB 920, at the end of the Relevant Period, we reconciled the customer’s electricity consumption against accrued energy credits for the preceding Relevant Period, and zeroed out any remaining surplus energy credits.

How does AB 920 change the way surplus energy is handled?

AB 920 allows SCE to offer customers the option to receive compensation for any remaining net surplus energy generated during each 12-month Relevant Period. Customers can choose to receive compensation in the form of a check or rollover credits to be used to reduce future energy charges.

Is compensation for surplus energy automatic for our NEM customers?

To ensure that customers do not miss an opportunity to receive Net Surplus Compensation (NSC) we automatically enroll all of its NEM customers in the program and each customer will become eligible for payment starting with that customer’s 2011 true-up bill. However, customers may elect to opt out of the program and receive no compensation.

If you have net surplus electricity at the end of your typical 12-month Relevant Period starting in 2011, you will qualify for compensation for any surplus electricity.

If you do not have surplus electricity at the end of your typical 12-month Relevant Period, you will not be eligible for compensation and you will experience no change from the current NEM program. If you have net surplus electricity in any subsequent 12-month Relevant Period, you will qualify for compensation and will be notified of your eligibility.

The value of the NSCR is established on a monthly basis, view the NSCR.

What are RECs, and what do I need to do to receive payment for my RECs?

REC stands for Renewable Energy Credit and represents the renewable attributes of your solar or wind energy generation. Each REC represents one MWH of renewable generation and it is tracked and recorded by the Western Renewable Energy Generation Information System. We must obtain ownership certification of RECs from an NEM customer before providing compensation for any RECs. The CPUC has not yet established the value of RECs. When the REC program takes effect, you may become eligible to receive a subsequent payment, in addition to the payment you will receive for any net surplus electricity you generate, based on the value of the RECs.

If you are interested in seeking NSCR compensation for any renewable attributes of your generation, you must certify that you own the RECs associated with your generating facility and your net surplus generators must be certified as Renewable Portfolio Standard (PRS) eligible by the California Energy Commission (CEC). Your net surplus generator must also meet CEC-approved REC tracking requirements for your generation to be counted for RPS purpose. To be compensated for renewable attributes of your generation in the form of RECs, you must create RECs and transfer them to us. You must submit documentation before we can evaluate any NSC payment for REC attributes. This process has not been fully developed and may require CPUC and/or CEC approval.

What payment will I receive? How is it determined?

We will use a simple rolling average of day ahead “default load aggregation point” electricity prices from 7:00 a.m. to 5:00 p.m. corresponding to each customer’s 12-month Relevant Period, as the value of electricity portion of each customer’s individual NSCR. The NSC may fluctuate monthly, as it is based on a rolling 12-month average of spot market prices and will be posted electronically on a monthly basis. Based on current market prices, the rate would be approximately 4 cents per kWh.

How will I get compensated for the surplus electricity I generate?

At the end of your Relevant Period, if you have generated more kWh than used, we will send you a selection form that must be completed and returned to us before any compensation can be made. Your compensation selection will be noted on your electric bill and kept in your billing records until you decide to change your selection. The selection form describes your compensation options. There are two ways an NEM customer can receive NSC:

1. The customer may receive a check through the mail for the value of the net surplus generation, excluding any amount owed to us. At the end of each Relevant Period, the customer’s account will be zeroed out, and the new Relevant Period will begin on the next regularly scheduled meter read date.

2. The customer may roll the credit over to the next Relevant Period. We will reconcile the customer’s account and apply the NSC earned toward the customer’s next Relevant Period. At this point, the account will be zeroed out and the new Relevant Period will begin on the next regularly-scheduled meter read date. Any NSC credit can be applied to energy or non-energy charges. We will maintain a customer’s NSC credit indefinitely, until it is fully used, or until the account is closed. If your account is closed, we will return any unused credit in your account in the form of a check to the mailing address identified on your account.

Is there a minimum amount that you will compensate me for?

No, there is no minimum payment. We will compensate you for any NSC credit. Please refer to your tax advisor or the IRS for any rules related to the NSCR compensation.

When will I receive payment?

All customers who qualify as net surplus generators on or after January 1, 2011 are eligible to receive payment for their surplus electricity at the end of their Relevant Period. To receive compensation, you must submit your selection form to us. The form will be sent to you prior to the end of your Relevant Period. We expect to be able to start issuing payments sometime in third quarter of 2011. We will communicate with eligible NEM customers as soon as the CPUC approves our NSCR.

Sometimes I have a monetary credit at the time of my Relevant Period. Does this mean I will get credit?

Not necessarily. Payment is issued only if the customer has surplus net electricity (i.e., the customer exports more kilowatt-hours (kWh) to the grid than the customer uses over the Relevant Period). It is rare for a customer to have a monetary credit at the time of a Relevant Period and not actually have exported net surplus electricity. This can happen, however, with solar energy systems that export to our grid during peak periods when electricity is more expensive, and use energy from our grid during off-peak periods when electricity costs less.

What will happen if I install a larger-than-necessary solar system?

The NEM solar program is designed to enable customers to offset their usage, not to generate surplus energy to sell to us. To be a participant in the NEM program and NSCR, you are required to install a system that is sized to offset your annual onsite consumption.

If I change my mind about the type of compensation I want to receive, can I change my selection?

Yes. A customer can submit a new selection form once every 12 months to cancel participation in the program or to change the method of compensation. They must complete and return the Net Surplus Compensation Rate Selection Form (PDF).

If I download the NEM Surplus Electricity Compensation Form, how can I return it to you?

Please mail the form to:
Net Energy Metering – NSCR Southern California Edison 
1551 Walnut Grove Avenue 
Rosemead, CA 91770-9810

What will happen if I don’t send a selection form to you?

If an eligible customer does not complete the form and select a compensation type for NSC, we will track and maintain a record of any NSC credit earned. Customers are not paid until we receive a completed selection form for the account.

How will you prompt customers when it is time to make a selection?

Before the end of each customer’s Relevant Period, we will send a notice reminding the customer that they may change the compensation selections.

Can I enroll in NSCR if I am a Direct Access customer?

At this time, the CPUC does not allow Direct Access customers to participate in this program. Direct Access customers’ ESPs may choose to offer NSC to their customers.

Can I enroll in NSCR if I am a Community Choice Aggregators or Energy Service Provider customer?

Customers of Community Choice Aggregators and Energy Service Providers are not eligible to receive payments from us for any NSC.

Can I enroll if I am a MASH / NSHP low income customer?

Yes. Each owner of either a tenant unit account or a common area account who receives credit under our NEM Virtual Net Metering (VNM) tariff is eligible for NSCR. If the customer’s electricity (in kWh) allocated to their account exceeds their usage during the Relevant Period, the customer may receive NSC.

What if I add more solar panels?

If you add solar panels after you receive your Permission to Operate, you must submit a revised Interconnection Application for your new system, including all additional equipment, to our Generation Interconnection Services. We will perform an engineering analysis to ensure our facilities can accommodate the increased generation capabilities of the new system. You must still meet all the requirements of the NEM program to continue on the NEM rate, including the size limitations. If you received a CSI or SGIP incentive for your solar or wind installation, you must also satisfy the requirements of those programs.

I moved into a house that has a solar system. How do I enroll in the program?

Most customers who move into homes with previously interconnected solar PV systems are automatically enrolled in our NEM program and are therefore eligible for the NSCR. If your PV system is larger than 30 kW, you must submit an Interconnection Agreement Form and if the solar system is over three years old, it must be inspected before you are enrolled in the NEM program. If you meet the program requirements you can qualify for the NSCR.

What if my panels are owned by a third party?

If you are an NEM customer, you will still be eligible to receive compensation for any net surplus electricity you generate. However, if you have relinquished ownership of your RECs to your system’s third party owner, you will only be paid for the wholesale value of the net surplus electricity and not for the associated REC. This is because payment for surplus electricity under this program is comprised of two components: the value of actual electricity generated and the value of the renewable attributes of this electricity (i.e. RECs). At this time, the CPUC and CEC have not determined the specific requirements of the REC certification.

What if I own the system and the renewable attributes as well? Will you pay me for both components?

The CPUC has placed a hold on any compensation for RECs until the CEC has set up a process to verify and track these attributes. Once this process is in place, the CPUC should allow us to make an additional payment to you in exchange for the REC value of your excess kWh.

I own more than one net energy metered property. Does this affect just me as the property owner, or each property I own?

Each NEM account is treated separately and cannot be combined. In addition, you must be the account holder of record to participate in the NEM program and participate in NSCR if eligible.

What would happen if I sold my house and moved out of your service area before my 2011 true-up? Would I still receive partial payment?

The legislation does not provide for pre-2011 compensation. If you moved before January 1, 2011, your account has been trued-up under the AB 920 program rules and you will not receive payment for any net surplus electricity you exported up to that time.

If I increase the capacity of my current system and become a net generator after the 2011 true up, will I be able to get a credit?

It depends on your continued eligibility for the NEM program. You will still need to qualify for NEM and file an amended Interconnection Agreement. If you meet the requirements for NEM and are a net surplus generator, you should be able to qualify for NSCR. Please see the question and answer above regarding adding more solar panels.

If I am temporarily unable to be a net generator due to circumstances beyond my control, such as fire, acts of nature, etc., and I cannot qualify for the new NEM program, will I still be able to participate in NSC?

Participation in the NEM program is a requirement for inclusion in the NSCR. If you subsequently re-qualify for NEM, then you will automatically be enrolled in the NSCR program.

What other incentives are available to me to increase my net generation capacity?

You can take advantage of any of our many energy efficiency program options.

Will this new program increase my rates?

We do not currently have information about how this program will impact electric rates.

Is the NEM tariff available for review?

Yes, a copy of the current tariff is available. Please always check the date on the tariff to ensure it is the latest version.

Will I be able to get a credit for net surplus energy I generated before this new legislation took effect?


AB 920 became effective January 1, 2011.

Where can I find more information about the NEM rate schedule, including the NSCR?

For more detailed information please review the rate schedule.

Who should customers contact if they have questions about choosing compensation?

For questions regarding the new NSC options, call our Customer Service at one of the following telephone numbers, Monday through Friday, 8:00 a.m. - 5:00 p.m.:
Residential NEM Customers: 866-701-7868 Business NEM Customers: 866-701-7869


Net Surplus Compensation Rate Selection Form (PDF)