Since the Net Billing Tariff (NBT) went into effect on April 15th, 2023, many solar developers and customers in California have wondered what the program’s future will look like. The 2024 update to the Avoided Cost Calculator (ACC) for the 2025 interconnection year gives us a glimpse into what’s in store. In this blog, we’ll break down the ACC, the likely impact of this update, and how we’re handling it all in ETB Developer.
What is the ACC
The ACC is a tool used by California utilities and regulatory agencies to estimate the costs that utilities avoid by investing in distributed energy resources (DERs), like solar, battery storage, and demand response programs, rather than relying solely on traditional electricity sources. Developed and updated by the California Public Utilities Commission (CPUC), the ACC provides a standardized method to calculate the financial benefits of DERs. The avoided costs are calculated using several factors including wholesale energy costs, generation capacity, greenhouse gas emissions, and other factors.
The ACC is recalculated every two years to align with current market conditions, regulatory changes, and California’s ever-evolving clean energy policies. For instance, updates reflect changes in fuel prices, capacity needs, and environmental goals, ensuring that utility planning stays relevant to the state’s long-term objectives.
California investor-owned utilities like Pacific Gas & Electric (PG&E), Southern California Edison, and San Diego Gas & Electric use the ACC outputs to guide their rates and incentives for their DER programs like the NBT. The hourly export rates ($/kWh) that NBT customers receive for compensation are based on hourly ACC values averaged across days in a month, differentiated by weekdays and weekends.
The Different Tracks of Export Rates for NBT Customers
It’s important to note the two different tracks for export rates that NBT customers can be on: those with locked-in values or those with floating values. Customers who receive permission to operate (PTO) in a certain year will lock in the estimated export rates for the next nine years based on that current year’s version of the ACC. (The ability to lock in nine years of export rates only applies to customers that PTO within the first five years of the NBT program.) The year that a customer locks in their export rates is referred to as their vintage year. All other customers that either opt out of the locked-in values or PTO after the five-year cutoff will receive the floating export rates that change every year when the ACC is updated. The update to the ACC that goes into effect in January 2025 will provide a new set of nine-year export rates for customers to lock in for vintage years 2025 and 2026, and it will provide new floating export rates for customers that do not have locked–in rates.
What is the Impact of the 2024 ACC Update?
The exact impact of this update remains to be seen since it depends on how the IOUs set their export price sheets based on the newest ACC version. Fortunately, the California Solar and Storage Association (CALSSA) summarized the ACC values for the three IOUs and provided their estimates that we can use for comparison. Consider the following heat maps of PG&E’s weekday export rates for the vintage year 2024 and CALSSA’s estimated values for the vintage year 2025:
Figure 1: A heat map of export rates for PG&E’s 2024 interconnection year
Figure 2: CALSSA’s estimated heat map for PG&E’s 2025 interconnection year
These estimates demonstrate changes in export rates throughout the year. If we focus on certain hourly windows like 7 a.m.- 4 p.m., we see there is a mixture of increases and decreases with an average percentage increase of approximately 0.55%. Narrowing that window to prime solar hours like 10 a.m.- 2 p.m. or 4 p.m., we see a significant reduction on average, but again, with a mixture of increases and decreases. Also, we do see a modest increase in some export rates outside of prime solar hours. These estimates reinforce the value of battery storage since that is the only way to capture the higher export rates outside of peak solar-producing hours. Our ETB Controller™ energy management system is unparalleled in its ability to target the most lucrative export hours to maximize savings and system performance, making it an invaluable tool for any solar and storage project.
Again, these estimates are subject to change, but they can provide some insight into the direction that NBT export rates are going in California. We will analyze the export rates and measure the impact once they are made available by the IOUs.
How we use NEM Programs in ETB Developer to Handle NBT Export Rates
We recently implemented our NEM Programs feature for ETB Developer that includes pre-configured net metering or net billing programs that can be easily selected. A rate schedule that includes a year’s worth of export rates can be attached to a NEM Program, meaning we can create NEM Programs for all five of the possible vintage years for NBT customers, as well as a NEM Program for customers that receive the floating export rates that update annually.
We can also create NEM Programs that include estimated export rates like those summarized by CALSSA for scenarios like the current one when the IOUs take longer than expected to get their export credit sheets finalized. That is why we created a NEM Program called “Proposed 2025 ACC (CALSSA)”:
This optional NEM Program includes energy export credits analyzed and published by CALSSA. These export credits are our best estimate as to what the export credit values will be from the IOUs. We want our users to have access to the best estimates possible while we wait for the finalized values; therefore, this NEM Program will be available until the utilities publish their actual export credits.
We’re always looking for ways to give our users an edge. As the California solar and storage market continues to rapidly change, we’re doing our best to stay on top of it all and give our ETB users access to the most recent features and information. That is why we’re hosting a webinar to discuss the ACC update, NEM Programs, updates to the Self-Generation Incentive Program rules, and how to improve project financials by enrolling in Demand-Side Grid Support programs. Join us on December 12 for our ‘Navigating the 2025 California Solar + Energy Storage Market’ webinar as we cover all these topics and demonstrate how it all works in ETB! Register here for free.
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