Net energy metering (NEM) is a program that helps people with solar panels get the most value from the electricity they produce. During sunny hours, solar panels often make more electricity than a home uses. Instead of wasting that extra power, it flows back into the electric grid, and the homeowner or business owner earns credits on their bill. These credits work like a savings balance. Later, when the home needs electricity, such as at night or on cloudy days, the homeowner can use the saved credits to offset some of the power they take from the grid. At the end of the billing period, they pay only for the electricity they used that was not covered by their credits. This makes solar energy more affordable and encourages people to produce clean energy.
Monthly generation credits and charges: SCP charges you for electricity generation each month to make payments easier and track how well your solar system is working. If your solar panels make more energy than you use, you’ll get credit for the extra energy, which goes toward future bills. If you don’t have enough credits, you’ll pay for the electricity you used that month. Remember, PG&E applies a monthly connection charge of about $10 (expected to rise to $24 in March 2026), with delivery and transmission charges billed once a year.
Annual cash out: Each spring, if you’ve sent extra energy to the grid, you’ll be paid at the Net Surplus Compensation rate, up to $5,000 per year. If the amount is over $200, you’ll receive a check; if it’s $200 or less, it will appear as a credit on your electric bill.
Monthly vs. annual billing cycles: Your electric generation is billed monthly, so you won’t face a large true-up bill for generation at the end of the year. However, it’s important to note that PG&E’s delivery and transmission charges are billed annually.
