Net Energy Metering (NEM) 2.0

We’re committed to remaining a leader in carbon reduction and have supported our customers in adopting rooftop solar for many years. We’ve also invested in utility-scale renewable energy, including solar, and provided important support to the solar industry.

As a result, there’s more than 210 MW of customer-owned rooftop solar in our service area.

We’ve started a public stakeholder process to look at Net Energy Metering (NEM). This process will help us develop a new NEM rate.

The process begins in October 2019 and includes:

  • Engaging with the solar industry, stakeholders and the community.
    • October – January 2020: Technical Working Group sessions to provide input on the components of a study on the value of solar and solar-plus-storage.
    • 2020: Independent third party to conduct value of solar and value of solar-plus-storage studies.
    • Fall 2020: Broader outreach to customer and community stakeholders.
  • Analyzing the costs and benefits related to customer-owned self-generation systems.
  • Addressing issues related to solar energy to support the state’s and SMUD’s carbon reduction goals and provide customer choice in a way that’s financially sustainable over the long term.

Once we complete the public stakeholder process, we will develop a NEM rate structure that’s as fair and equitable as possible to all customers. Rate options will be presented to the SMUD Board of Directors for their vote in late 2021. The new NEM policies and rates would be effective as early as 2022.


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  • A critical part of the process is to conduct a detailed study of the value of solar and solar-plus-storage. We recognize there are many views on how to approach valuing solar energy and solar-plus-storage.
  • We’ve invited technical experts representing a diverse range of views to form a Technical Working Group to provide input on the components to consider in the valuation study.
  • The Technical Working Group will meet several times between mid-October and January 2020.
  • We’ll engage an independent third party to conduct the valuation study, which we expect to be complete in mid-2020.
  • We’ll begin broader outreach to our customers and community stakeholders once the valuation study is complete.
  • The Technical Working Group, valuation study and customer and community feedback will inform our proposal for a new NEM rate and related policies and programs.
  • Once we complete the public stakeholder process, we will develop and present new NEM rate options to the SMUD Board of Directors for their vote in late 2021. 
  • The new NEM policies and rates would be effective in 2022.

SMUD’s current rates and compensation for customers who install rooftop solar follow the California Public Utilities Code named “NEM 1.0,” which include paying customers full retail rates for excess generation.

Established in 1996 to encourage the adoption of solar, NEM 1.0 was required to remain in place until total NEM generation capacity reached 5% of SMUD’s peak load. SMUD met the 5% threshold in 2017 and can now adopt a new NEM rate.

SMUD has provided safe, reliable and affordable power to our customers and community for over 70 years. As a community-owned, not-for-profit utility, it’s our obligation to deliver responsible, financially sound and environmentally progressive solutions that provide value to all our customers and community.

We appreciate your interest in this process and look forward to working together with stakeholders to find a solution that’s fair and equitable for everyone.

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We'll occasionally send out updates on the public stakeholder process, including community meeting dates and when NEM will be discussed by our Board of Directors. To receive these updates, please submit the form below.