Complete guide to New York net metering

New York’s got it all - the Big Apple, the rolling Catskill Mountains, and a thriving solar industry. Despite not being the sunniest place, high electricity rates and solar-friendly policy has allowed homeowners across the state to enjoy all the benefits of installing solar panels. 

One of the biggest contributors to solar’s success in New York is net metering, which requires utilities to purchase the extra energy homeowners’ solar panels produce, at the full-retail price of electricity. With that said, there have been a few changes, and while net metering in New York is still technically in place, some of the details are different now.

Don’t worry - solar is still a worthwhile investment in New York, and the savings are great. But things will only continue to change in the future, so if you’re considering solar, you’ll probably want to get it installed sooner rather than later. 

New York’s transition away from net metering

Net metering, sometimes referred to as NEM, was established in the Empire State way back in 1997, and just like a bad fashion trend, something that worked back then, probably doesn't work now. While net metering does offer amazing savings to solar homeowners, it also puts stress on the utilities and the grid.

To mitigate some of the cost-related issues caused by net metering, the state’s Public Service Commission (PSC) devised a new solar billing system - the Value of Distributed Energy Resources (VDER), or Value Stack. 

The VDER rate structure was designed to reflect both the benefits and costs of home solar, in order to provide a more accurate billing rate for excess solar energy and to prevent shifting additional costs onto non-solar homeowners. VDER works much differently than net metering, but we’ll get into the specifics later. 

To prevent any fallout from forcing the solar industry to switch from net metering to a completely different rate structure, the PSC has allowed for the development of transition programs to help ease into VDER. Now, homeowners can choose to either use the current transitional net metering program, called “Phase One plus CBC”, or they can opt into the VDER program. 

How New York’s net metering program works

New York’s current net metering program is just plain old regular net metering. You can learn all about how it works from solar expert Will White: 

The basic gist of net metering is this: solar panels are installed on your roof, and any energy produced first gets used by your home.

If your solar array makes more electricity than your home needs at the time, it gets sent to the grid, and you receive a kilowatt-hour (kWh) credit on your electricity bill to offset kilowatt-hours you use from the grid in the future.  

For example, if your home used 100 kilowatt-hours from the utility and your solar system sent 25 kilowatt hours of excess solar energy to the grid, you would only be billed for 75 kWh at the end of the month.

Customer Benefit Contribution charge

While the way energy is credited and netted lines up with the definition of net metering, New Yorkers who installed solar panels after January 1, 2022 have to pay a new monthly charge called the Customer Benefit Contribution (CBC) charge. 

The value of the charge depends on your utility company and the size of your solar system. The following table outlines the CBC rates for solar homeowners: 

Utility company	CBC rate $/kW per month
Central Hudson	$1.23
Con Edison	$0.94
LIPA	$0.30
National Grid	$0.88
NYSEG	$0.72
Orange and Rockland	$1.33
RG&E	$0.87

_{*Rates may change for 2024}

Say you’re a Con Edison customer and you install a 7 kilowatt (kW) solar system - you would have a monthly CBC charge of $6.58. That’s about $79 per year. 

Term length

Homeowners who install solar after January 1, 2022 will participate in the current net metering program for 20 years. After the 20-year term, you will then use whatever solar billing structure is in effect at that time. 

Electricity rates

Throughout the 20-year term, you will be able to choose your electricity rate plan and remain on it for its entirety. 

For instance, National Grid customers could choose to use standard, Time of Use, or standby rates offered by the utility. You can also switch to a different rate plan if new ones become available in the future. 

Most solar homeowners will see the biggest electricity bill savings by sticking with their utility’s standard term.

Credit rollover

Net metering credits will roll over from one billing period to the next. At the end of the yearly billing cycle, any remaining credits will roll over to the start of the next year. 

However, after the 20-year net metering term, any leftover credits will expire without payment. 

Should you consider New York’s VDER program instead of net metering?

New Yorkers who install solar on their roofs can choose between opting into the VDER program or enrolling in net metering. 

Under the VDER program, excess solar energy is purchased at the Value Stack rate. The Value Stack rate is made up of four different components, including:

• The wholesale energy rate

• How much the project decreases grid demand

• How much the project reduces the need for future utility upgrades

• The environmental benefits of installing solar on the grid and society 

 Because the Value Stack is dependent on so many factors, and can even be different between specific locations within utility territories, it’s difficult to pin down exactly what the rate would be equal to. 

In general, though, you can expect the Value Stack rate to be less than the retail rate of electricity. However, residential customers who choose VDER only have to pay half of the CBC charge. 

So, which should you choose: net metering or the VDER Value Stack?

The answer to this question is going to depend on what Value Stack rate you qualify for and exactly how much lower it is than the retail rate of electricity. 

Overall, net metering will probably save you more money on your electricity bills. At the very least, going with net metering will save you a headache, since the program is way more straightforward than the VDER Value Stack.

How much can net metering save you in New York?

The exact amount that you’ll save with net metering depends on your energy usage, the solar energy system you install, and the electricity rate offered by your utility provider. It is possible to eliminate all of your electricity costs with a solar system in the Empire State. 

Let’s look at an example. You install an 8.14 kW solar system to cover your $150 electricity bill. With net metering, instead of paying $150 a month, you would only pay about $11 per month (because of the CBC charge). 

So, instead of paying your utility $1,800 over the course of the year, you’ll only have to pay them $132 in CBC charges for the year, and maybe some additional taxes that cannot be offset by solar.  

Should New Yorkers install solar batteries with their solar panels?

Since New York still offers a net metering policy, installing energy storage with a solar installation to store excess electricity doesn’t make a whole lot of sense from a financial perspective. 

You see, solar batteries cost a pretty penny, typically a minimum of $10,000. So, you would be spending thousands of dollars on a battery that won’t save you any additional money.

However, if you want to maximize the amount of clean energy your home is using, or if having emergency battery backup during power outages is important to you, then the investment in a battery may be worthwhile.

Ultimately, it’s up to you! You can use our solar calculator to see how much money a solar battery would add to the cost of your installation to help you decide if energy storage makes sense for you. 

Is going solar in New York worth it?

The short answer is yes, going solar in New York is worth it, especially right now. 

The current net energy metering transition program credits you at the full-retail rate for excess energy sent to the grid, and New York has two awesome solar incentives: aside from the 30% federal solar tax credit, New York state homeowners can also take advantage of the New York State solar tax credit, which is worth up to $5,000. 

But it doesn’t stop there - New Yorkers can also get an incentive through NY-SUN. It is a megawatt-block incentive program offered by the New York State Energy Research and Development Authority (NYSERDA), in collaboration with the Long Island Power Authority and New York Power Authority. 

In total, you have the potential to earn over $10,000 in savings from all of the solar incentives offered in New York right now.

The combination of utility bill savings, the great incentive programs available for rooftop solar, and the full-retail net metering program, you could see a solar payback period of less than 6 years - even with the CBC charge!

You can use our solar calculator to get a better understanding of what kind of savings you can expect, and even connect with vetted local solar installers to get your solar project started.