Net Energy Metering (NEM) Successor Tariff

On October 7, 2013, Governor Brown signed Assembly Bill (AB) 327 (Perea) directing the CPUC to develop a successor tariff for eligible customers with a renewable electrical generation on their property.  The CPUC opened Rulemaking (R.)14-07-002 on July 10, 2014 to investigate the best path forward for NEM, pursuant to Public Utilities Code 2827.1.

On January 28, 2016, the CPUC approved Decision (D.) 16-01-044, adopting a NEM successor tariff that continues the existing NEM structure while making adjustments to align the costs of NEM successor customers more closely with those of non-NEM customers. The Utilities filed Advice Letters with the CPUC implementing the new requirements on February 29, 2016. The Advice Letters were approved by the CPUC in June 2016 in Resolution E-4792. The NEM successor tariff is currently in effect in SDG&E, PG&E and SCE's service territories. 

On June 24, 2021, the CPUC approved D.21-06-039, extending the statutory deadline in this proceeding to October 1, 2021.

To receive up-to-date information on this proceeding, please join the service list for R.14-07-002.For information on the new NEM Revisit Rulemaking (
R.20-080-020), please visit this webpage.


Pursuant to Public Utilities Code 2827.1 requires the CPUC to do the following:

  • Ensure that customer-sited renewable distributed generation continues to grow sustainably;
  • Include specific alternatives designed for the growth of distributed generation among residential customers in disadvantaged communities;
  • Ensure that the successor tariff is based on the costs and benefits of the renewable electrical generation facility;
  • Ensure that the total benefits of the tariff to all customers and the electrical system are approximately equal to the total costs;
  • Allow distributed generation projects sized to customer load that are greater than 1 MW in size to interconnect under reasonable charges if they do not have significant impact on the distribution grid; and,
  • Establish terms of service and billing rules for eligible customer generators, consistent with all other relevant statutory requirements.

AB 327 mandated each large investor-owned utility to adopt the successor tariff either on July 1, 2017 or when NEM generating capacity exceeded 5% of their aggregate peak demand.  SDG&E and PG&E hit the program limit on June 29, 2016 and December 15, 2016, respectively, and SCE rolled over on July 1, 2017.  For details on the current NEM successor tariff, please see our NEM Overview page.  Energy Division Staff led a robust public process, including numerous public workshops, to develop and gather public input for the development of proposals of NEM successor tariff.  Information and supporting documents on the process and workshops can be found on the page Public Process to Develop Proposal for the Net Energy Metering Successor Tariff.

Current Policy Issues

The CPUC has addressed, or is currently addressing, a number of issues related to the NEM successor tariff as part of Rulemaking (R.)14-07-002.  These issues are summarized below.  To join this proceeding or any other proceeding's service list, please visit our Service List page.  For more information on how you can participate in this proceeding, please visit the CPUC's Public Advisor page.

  • NEM Consumer Protections - D.16-01-044 directed Energy Division staff, in collaboration with R.14-07-002 parties, to consider further NEM consumer protection measures.  In September 2018, the CPUC adopted Decision (D.)18-09-044, which establishes a process for creating a solar information packet for consumers.  The Decision also requires that solar providers upload three documents before interconnecting a residential solar customer to the electric grid in the large investor-owned utility (IOU) territories.  These documents include:  the solar installation contract, a signed copy of a CPUC solar information packet officially called the "California Solar Consumer Protection Guide"), and the Contractor State License Board (CSLB) Solar Disclosure Document.  See this page to access the California Solar Consumer Protection Guide. In August 2020, the CPUC adopted D.20-08-001, which adopts standardized inputs and assumptions to be used by solar providers in the calculation and presentation of expected electric utility bill savings to residential consumers of photovoltaic solar energy systems. In June 2021, the CPUC adopted D.21-06-026, which directs the electric investor-owned utilities to each establish a search engine for regulatory agency staff to retrieve NEM interconnection application documents, authorizes a public list of solar providers with recent interconnection application(s) or associated project(s) in non-compliance with state law or regulatory agency rules and regulations, and modifies the semi-annual spot audits originally required by D.18-09-044
  • Alternatives for Disadvantaged Communities - D.16-01-044 directed CPUC's Energy Division to explore the design and implementation of alternatives for disadvantaged communities (DAC) in a second phase of the proceeding. In June 2018, the CPUC created three programs to increase access to solar for residents of DACs located within PG&E's, SCE's, or SDG&E's service territory in Decision (D.)18-06-027. See this page for more details. 
  • Solar on Mulitifamily Affordable Housing (SOMAH) - Assembly Bill (AB) 693 (Eggman) created the SOMAH Program.  SOMAH is intended to provide financial incentives for the installation of solar PV systems on multifamily affordable housing properties throughout California. In December 2017, the CPUC issued D.17-12-022 which outlines the program design for the Solar on Multifamily Affordable Housing (SOMAH) Program. See here for more details.  
  • Evaluation of Successor Tariff Rate - Pursuant to direction in the NEM Successor Tariff Decision, the CPUC is currently reviewing a successor to the current NEM 2 tariff. For information on the new NEM Revisit Rulemaking (R.20-080-020), please visit this webpage.


    NEM Consumer Protection Workshops

    Workshop onStandardized Solar Energy System Electric Bill Savings Inputs and Assumptions

    The purpose of this workshop was to build understanding of the elements in the CPUC Energy Division's staff proposal on standardized solar energy system electric bill savings inputs and assumptions so that comments are as informed as possible.

    Workshop on Draft Solar Information Packet  

    The purpose of this workshop was to seek stakeholders' feedback on a draft solar information packet that will enable consumers to make a more informed decision about installing solar on their single-family homes.

    Update on Solar Information Packet

    On April 26, 2019, the Energy Division distributed a Revised Solar Information Packet to service list R.14-07-002 and R.12-11-005.  The Energy Division asked for written comments about the content of the Revised Solar Information Packet and proposed implementation.  The Final Solar Information Packet -- officially called the "California Solar Consumer Protection Guide" - now is available and can be accessed at this webpage.

    Contact Us


    If you have any additional questions about information on this webpage, please contact the CPUC Energy Division at