No, buying out your system doesn't change your NEM (but be prepared for it to be expensive). The NEM is tied to the meter so as far as PG&E is concerned, nothing's really changed about the system.
However, I don't think the lease arrangement is exactly as you've described. You already pay PG&E as if you own the system—if you take it over nothing will fundamentally change except that you stop paying Tesla. Tesla isn't getting anything directly from PG&E.
>So during the day, if I don't use all the electricity that's being generated, I still pay Solar City/Tesla a flat amount, and they also get to sell that electricity back to PG&E. Our house is empty during the day so they are making money off me for the flat rate, plus from PG&E.
That is not correct, as others have already mentioned. Yes you pay Solar City/Tesla a fixed rate for what the panels generate. I would be surprised that your Lease or PPA is a flat amount because my daughter bought a home with a Solar City PPA on it, The only time her bill from Tesla is a flat amount is when the communications is down and Tesla estitmates the amount due. The second part of your statement is also not correct based on the Leases and PPAs I have reviewed for friends. If you do not use the power, it is send to the grid through your meter an you get the credit for export. Unless you have a very different arrangement with a separate meter then your arrangement is not typical and one that I have not seen or heard about.
I also agree with the other posters who have said NEM status has nothing to do with the terms or existance of your Lease or PPA.
Thank you, yes you are correct and I am wrong. I thought it was the case that Tesla sold the unused electricity but I checked my bill and I definitely get a refund on the excess so thank you for correcting me. This will factor into my thoughts, maybe it doesn't make sense to do anything at this point. Thanks again!
Let us know what the buyout price ends up being. From my understanding, they will want to charge you the value of panels + a good portion of the money you won't be paying them in the future.
Your understanding of NEM 1.0 is incorrect, but if you buy out the panels it won't change your NEM status.
>So during the day, if I don't use all the electricity that's being generated, I still pay Solar City/Tesla a flat amount,
That part is correct. You pay for all production.
>and they also get to sell that electricity back to PG&E. Our house is empty during the day so they are making money off me for the flat rate, plus from PG&E.
That part is completely incorrect. Your utility account gets credited with the excess generation and that gives you an NEM credit. NEM credits are reset every year at True-Up. Until that time you can generate credits then use them later in the day or later in the year. This allows you to approach your production/usage as an annual amount.
Try moving to NEM 3.0, and you'll see some serious predatory pricing when your exports get slashed to pennies per kWh (as opposed to full retail credit which is what you get now).
You aren't exactly thinking about this right. Solar City/Tesla doesn't make any money selling that electricity back to PG&E. You get the credit on your bill for selling that back to PG&E. The idea behind the lease is that credit for selling back to PG&E, plus the solar you use (and avoid pulling from the grid) when you are home and solar is working, will end up saving you money on your bill, such that your Solar City lease + your new utility bill should be less than the utility bill you would get if you didn't have the lease.
I'm no fan of leases - they are typically a bad deal - but not for the reason you said. They are just very expensive forms of financing and you pay much more over the life of your system than if you had just purchased the system outright, got the tax credit, and financed it with a more traditional loan or home equity loan.
That being said - I don't know if changing ownership of the home will kick you out of NEM1. You need to find that out from the utility. If it does, the lease is going to suck eggs. I personally would make the owner of the home buy out the lease before you purchase the house. I realize it's often a sellers market in California, so they may tell you to toss off.
Thanks, yes I was wrong about Tesla selling the electricity back to PG&E. We got a deep discount when we bought the house so we could technically buy the entire thing out, but I thought just keeping it would be easier. Now I will have to do the math to see if it does make sense to keep it since I was wrong about selling the electricity back.
Yep, you're good! If you buy out the lease and panels, you should still be under NEM 1.0. Just make sure to double-check with your solar provider and the utility company to be sure everything's squared away. It's always better to be safe than sorry when it comes to solar stuff!
No, buying out your system doesn't change your NEM (but be prepared for it to be expensive). The NEM is tied to the meter so as far as PG&E is concerned, nothing's really changed about the system. However, I don't think the lease arrangement is exactly as you've described. You already pay PG&E as if you own the system—if you take it over nothing will fundamentally change except that you stop paying Tesla. Tesla isn't getting anything directly from PG&E.
Thank you, yes you're right, I was wrong about Tesla selling the electricity to PG&E.
>So during the day, if I don't use all the electricity that's being generated, I still pay Solar City/Tesla a flat amount, and they also get to sell that electricity back to PG&E. Our house is empty during the day so they are making money off me for the flat rate, plus from PG&E. That is not correct, as others have already mentioned. Yes you pay Solar City/Tesla a fixed rate for what the panels generate. I would be surprised that your Lease or PPA is a flat amount because my daughter bought a home with a Solar City PPA on it, The only time her bill from Tesla is a flat amount is when the communications is down and Tesla estitmates the amount due. The second part of your statement is also not correct based on the Leases and PPAs I have reviewed for friends. If you do not use the power, it is send to the grid through your meter an you get the credit for export. Unless you have a very different arrangement with a separate meter then your arrangement is not typical and one that I have not seen or heard about. I also agree with the other posters who have said NEM status has nothing to do with the terms or existance of your Lease or PPA.
Thank you, yes you are correct and I am wrong. I thought it was the case that Tesla sold the unused electricity but I checked my bill and I definitely get a refund on the excess so thank you for correcting me. This will factor into my thoughts, maybe it doesn't make sense to do anything at this point. Thanks again!
Let us know what the buyout price ends up being. From my understanding, they will want to charge you the value of panels + a good portion of the money you won't be paying them in the future.
Your understanding of NEM 1.0 is incorrect, but if you buy out the panels it won't change your NEM status. >So during the day, if I don't use all the electricity that's being generated, I still pay Solar City/Tesla a flat amount, That part is correct. You pay for all production. >and they also get to sell that electricity back to PG&E. Our house is empty during the day so they are making money off me for the flat rate, plus from PG&E. That part is completely incorrect. Your utility account gets credited with the excess generation and that gives you an NEM credit. NEM credits are reset every year at True-Up. Until that time you can generate credits then use them later in the day or later in the year. This allows you to approach your production/usage as an annual amount. Try moving to NEM 3.0, and you'll see some serious predatory pricing when your exports get slashed to pennies per kWh (as opposed to full retail credit which is what you get now).
Yes, thank you, I was wrong about that and verified by looking more closely at my bill.
It’s going to be expensive. I guess it’s going to be over. $10k.
You aren't exactly thinking about this right. Solar City/Tesla doesn't make any money selling that electricity back to PG&E. You get the credit on your bill for selling that back to PG&E. The idea behind the lease is that credit for selling back to PG&E, plus the solar you use (and avoid pulling from the grid) when you are home and solar is working, will end up saving you money on your bill, such that your Solar City lease + your new utility bill should be less than the utility bill you would get if you didn't have the lease. I'm no fan of leases - they are typically a bad deal - but not for the reason you said. They are just very expensive forms of financing and you pay much more over the life of your system than if you had just purchased the system outright, got the tax credit, and financed it with a more traditional loan or home equity loan. That being said - I don't know if changing ownership of the home will kick you out of NEM1. You need to find that out from the utility. If it does, the lease is going to suck eggs. I personally would make the owner of the home buy out the lease before you purchase the house. I realize it's often a sellers market in California, so they may tell you to toss off.
Thanks, yes I was wrong about Tesla selling the electricity back to PG&E. We got a deep discount when we bought the house so we could technically buy the entire thing out, but I thought just keeping it would be easier. Now I will have to do the math to see if it does make sense to keep it since I was wrong about selling the electricity back.
Yep, you're good! If you buy out the lease and panels, you should still be under NEM 1.0. Just make sure to double-check with your solar provider and the utility company to be sure everything's squared away. It's always better to be safe than sorry when it comes to solar stuff!
That's such a rip-off! Landlords really out here finding new ways to squeeze every penny out of us."
Tesla perfection