AB 920: the California Solar Surplus Act of 2009

Making your utility pay you

Last October, California passed a bill requiring utilities to pay customers whose solar or wind systems produce more power than they use in a year. The law went into effect at the beginning of 2010. Previously, homeowners weren’t paid for extra energy they fed into the grid. Now, instead of sending a check to your electric company, they may be sending a check to you.

Net metering basics

When you get solar panels, in most cases you’ll still be connected to the power grid (grid-tie solar). When you generate extra energy during the day, it’s fed into the grid; when you’re home at night and your solar panels aren’t producing energy, you’ll get energy from the grid, like other utility customers. You’ll only be charged when you end up using more energy than you produce. This is called net metering. Now, if Californians end up generating more energy than they use over the course of a year, they’ll be paid for that energy at a particular rate set by the state’s Public Utilities Commission.

No more wasted energy

When a homeowner installs solar panels, California requires that it be just big enough to generate the amount of power needed for that house. But families can often reduce energy use, by getting energy-efficient appliances, new insulation, or by changing habits. Before, homeowners with solar power had no incentive to save energy, because they knew the energy would just be going back to the utility company if they didn’t use it. Now, because there will be payment for that extra power, there’s an incentive to make improvements. It also benefits families with children who have grown up and moved out, because they’ll now be compensated for their reduction in energy use.

How it works

The payment amount is still being determined by the Public Utilities Commission. They’re also still deciding how homeowners will be paid– whether by check or through a credit. The time that you’re eligible to start getting paid depends on the time of year that your solar system was installed. Every 12 months, net metering customers get a “true-up” bill that checks the amount of energy they’ve used against the amount that they’ve generated. If your solar panels were installed in April of a particular year, you’ll get your true-up bill every April.

Since the Solar Surplus Act took effect in January, customers whose true-up cycle starts in January automatically became eligible to be paid for energy generated starting then and ending in January 2011. For others, the compensation period begins with the month of their new true-up cycle in 2010 (customers can request that their cycle be moved to an earlier point in the year). Only those who actually have generated more energy than they used will be paid.