Institute of the Environment

In April 2023 the California Public Utilities Commission adopted the Net Billing Tariff (NBT) replacing the NEM2 rate structure governing net energy metering for distributed generation. In this study California residential photovoltaic (PV) interconnections data for a 5-year period are utilized to retrospectively analyze trends in battery storage (BESS) adoption, average system size, third-party finance, and electric vehicle use, comparing customers on NBT to those on NEM2. An economic benefit-cost model is then set up to explain the observed trends in terms of payback period and ROI of PV and BESS investments facing a middle-income California homeowner. NBT is found to provide strong incentives for pairing PV solar with storage that were absent from the NEM2 policy. Bidirectional EV charging is then introduced into the model by setting up and solving an optimization problem to simultaneously determine least-cost EV and BESS hourly dis/charging schedules. We find that under both NEM2 and NBT, an EV-owning homeowner with bidirectional charging infrastructure has lower annual electricity costs than a homeowner running PV solar without storage.