Solar Policy

Depending on your location, some of the following solar policies may be available. Visit the DSIRE website to find out what is available in your area.

Net energy metering

Net energy metering (NEM) is for customers who generate electricity by solar PV, wind or other eligible generating systems. If your system produces more energy than you use, you can earn bill credits for the excess power your system sends into the utility electric grid. You can later use that credit to cover the cost of power you may need from the utility at times when your generating system doesn't fully meet electricity needs.

Benefits for NEM customers

  • The customer can receive up to full retail value for the production of the system. NEM allows the customer to use the power that the solar PV system generates to offset any consumption beyond what the system produces. The utility acts as a bank to store the excess production, then allowing the customer access to that power to offset their own consumption. Check the local utility net metering rules to understand if there are additional fees or charges included in the service.
  • The customer can receive wholesale value for the annual excess production of the system. If the solar PV system produces more kWh than the customer consumes annually, the utility may purchase excess energy at a wholesale rate.
  • No need to store excess solar energy onsite. Because you get credit for excess power generation, it is not necessary to install a battery storage system. However, some may still decide to install a storage system to offset time-of-use rates, demand charges or for a battery backup. Through net metering, the utility acts as your “battery bank” and provides you credits for solar kWhs generated.

Value of solar tariff

The value of solar tariff (VOST), also called a feed-in tariff, is specifically separated from the retail rate, unlike net energy metering, which is valued based on retail rates, and instead provides value based on the attributes of the solar generation. Specific aspects include the following.

  • Avoiding electricity purchases from dirtier sources of power
  • Eliminating infrastructure upgrades such as new distribution and transmission lines and centralized power plants
  • Providing consistent source of clean energy for the lifespan of the PV system

Virtual net metering

Virtual net energy metering (VNEM) is a billing arrangement that allows a property to offset both common area and tenant loads with a common solar electric system. The illustration shows how solar electricity is produced, where the energy flows and the bill VNEM crediting mechanism. With VNEM, all of the solar electricity produced is sent onto the grid, and then virtually allocated out to each of the benefitting utility accounts.


  1. Individual photovoltaic (PV) cells are embedded onto panels. Sunlight striking the panels is chemically converted into direct current (DC) electricity.
  2. The DC electricity goes to an inverter that transforms it into alternating current (AC) electricity.
  3. The total solar production is recorded by a generation meter and sent onto the grid to be virtually allocated out to each benefitting utility account at the property.

Meter aggregation

With the meter aggregation tariff, a property owner can offset multiple meters on adjacent parcels with one solar PV system. The parcels must be adjacent, but a road or body of water can run in between, and have the same owner or renter as the meters on the utility account.

The total solar production is recorded by a generation meter and is sent onto the grid to be virtually allocated out to each of the owner’s benefitting utility accounts.

Property assessed clean energy

Property assessed clean energy, or PACE, financing allows property owners to fund energy efficiency, water efficiency and renewable energy projects with little or no upfront costs. With PACE, residential and commercial property owners living within a participating district can finance up to 100% of their project and pay it back over time as a voluntary property tax assessment through their existing property tax bill.

PACE can be combined with net energy metering, value of solar tariff and meter aggregation policies for a quicker payback period.

CSE offers information on PACE loans, including a map identifying where they are available in California.