What is NEM?

Much like an owner occupied building, solar production gets distributed to the multi-tenant building using Net Energy Metering (NEM). NEM is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. If solar generated exceeds the building use during daylight hours, the electricity meter will run backwards to provide a credit against what electricity that is consumed at night or other periods when the building’s electricity use exceeds the system’s output.

Option 1: Net Energy Metering Aggregation (NEMA)

NEMA is a product offered by the local utility company that allows a customer to aggregate the electrical load from multiple meters and offset this load with solar production fed into a single meter.

Requirements

1. System must be sized to the customer’s recent annual load.
2. Accounts have to be located on the same property as the renewable generator or on properties adjacent or contiguous to it.
3. The customer of record for all meters must be under the same name.

Benefits

1. Easier to size system. Solar production is shared, so the system is sized for the entire property rather than each individual tenant. Even as tenants come and go, the average electricity usage for the entire building stays relatively constant, so there is less likelihood of overproduction or underproduction as compared to creating a Dedicated solar system for each tenant (see below).
2. No extra equipment needed. Since all panels feed into a single meter, there is no need to add extra inverters or hardware to connect panels to multiple meters. There is also no requirement to install a utility provided Net Generation Output Meter (NGOM), which measures the solar production output and adds $1k-$5k of cost to the solar system.

Fees

1. One time NEM interconnection fee: $132 or $800 for > 1MW systems
2. Aggregation — $5 per account per month

Option 2: Virtual Net Energy Metering (VNEM)

VNEM or VNM allows multi-tenant building owners to install a single solar system to cover the electricity load of both common and tenant areas connected at the same service delivery point. The electricity does not flow directly to any tenant meter, but feeds directly back onto the grid. A percentage of solar production is then allocated to each meter.

Requirements

1. Building tenants are sub metered
2. Meter can remain in tenant’s name
3. Net Generation Output Meter (NGOM) must be installed to track solar production
4. The net balance of all charges owed to local utility must be paid monthly — normally NEM accounts true up once a year.

Benefits

1. Meter remains in Tenant’s name.
2. Reduced risk of nonpayment. If the tenant doesn’t pay the bill, the percentage of solar production dedicated to that tenant can be reduced to 0%. The nonpayment then becomes an issue with the utility company, which can then decide to disconnect power for nonpayment, etc.
3. Reallocation of solar production possible. If the electricity usage per meter changes, perhaps due to tenant turnover, the solar production can be reallocated to better fit electric consumption from each meter in the building. Unlike NEMA (see above), which distributes solar across meters automatically, reallocation of solar power under VNEM requires filling out a solar allocation request form provided by the local utility.

Fees

1. One time NEM interconnection fee: $132 or $800 for > 1MW systems
2. One time service origination set-up fee of $25 per meter, $500 cap
3. Solar allocation request fee — $0 per meter per 12 month period. Subsequent changes to solar production allocation will cost $7.50 per meter modified.
4. Installation of NGOM: $1k to $5k of additional cost to system

Option 3: Dedicated solar system for each tenant

Another way of distributing the solar energy is to create a separate solar system for each tenant. Dedicated solar systems have the following complexities:

1. Solar system must be correctly sized. Energy usage is specific to how the current tenant is using the space. Will the tenant be using the power for the next 25 years? If a new tenant arrives, will they have the same energy demands? Will the local utility company pay a reasonable price for any excess power that is fed into the grid, while the space is vacant, or when a new tenant arrives with less power need? These questions become more complex to answer when you are building a dedicated solar system for each tenant, as you are unable to spread the excess production power to other tenants in the building.
2. Extra equipment may be needed. Feeding an array of solar panels into a single meter is less expensive and requires less equipment and wiring than dedicating a set of panels and inverters to each tenant meter.
3. Local utility bills are paid yearly instead of monthly. The new bill will be on NEM schedule which delays payment for the bill until the true up date, typically one year from start of service. NEM has the advantage of balancing out any overproduction during the summer months to offset underproduction during the winter months.

Option 4: Behind-the-meter solar sharing

With this option specialized hardware is installed, behind the meter, to share a single solar system to multiple, separately connected units, while conforming to all safety and network regulations.

By sharing power behind the meter, property owners can maximize their solar value, and avoid using the grid, which can incur extra grid fees and surcharges from the local utility. Behind-the-meter technologies also help in certain areas where either VNEM or NEMA are not offered, or when alternative approaches fail to maximize profits.

Which option is best for you?

Having trouble deciding which option is best for you? We can help direct you to one of our partners that specialize in solar installations for each of these scenarios, including office buildings, multi-family, warehouse space, cold storage, medical, shopping centers, etc.

Interested in learning more? Check out Energy311’s Blog!