NEM Reservation

Click here to access the online Net Energy Metering Reservation application.

here for the NEM Reservation Application instructions.

Questions? Need help? Call 650-329-2241, or send an email to

Net Energy Metering program status

As of August 9, 2017, there are 1,017 kilowatts (kW) remaining for new NEM Reservations before Palo Alto reaches the NEM cap of 10,800 kW.

CPAU expects to reach the NEM cap in the next six months. The remaining capacity will be updated weekly. Click
here to see a table with monthly PV installations.

Net Energy Metering Description

Net energy metering (NEM) is a billing mechanism designed to promote the installation of renewable distributed generation by allowing customers to be compensated at the full retail rate for electricity generated by their on-site systems, such as solar photovoltaic (solar PV) systems. State law requires all electric utilities to offer NEM to Customers with eligible renewable distributed generation up to a maximum “NEM cap”, which in Palo Alto is 10.8 megawatts (MW). Customers within the NEM cap remain subject to the requirements set forth in Rule 29 through a period of twenty (20) years from the original date of Interconnection of the eligible solar PV system.

Please note that existing solar customers do not need to take action to remain on Net Energy Metering. 
The NEM Reservation program is for new solar installations or for expansions to existing solar systems.

Net Energy Metering Successor Rate Description

Once CPAU has reached the NEM cap, customers with newly approved solar PV systems will be served by the NEM Successor rate. The NEM Successor rate was developed to continue support for solar PV deployment while ensuring that CPAU’s electric rates are based on the cost to provide service in compliance with state law. Under the NEM Successor rate, customers would receive a credit for all electricity sent to the grid based on the Export Electricity Compensation rate

On August 22, 2016 the Palo Alto City Council approved the NEM Successor program with an Export Electricity Compensation rate of 7.485 cents per kilowatt-hour (kWh). The Export Electricity Compensation rate will be updated annually to reflect the value of solar energy production.

Net Energy Metering Reservation Program

CPAU is offering a NEM Reservation program to allow customers who are planning to install solar PV system in the near future to reserve a spot in the NEM program until the NEM cap has been reached. Customers may apply for a NEM Reservation after signing a contract to purchase or lease a solar PV system that will be installed and approved for interconnection within 6 months.

NEM Reservation applications will be reviewed and approved on a first-come, first-served basis up to the NEM cap. Once the available NEM capacity has been reserved, CPAU will maintain a waitlist in the event that NEM capacity becomes available. Once the NEM cap has been reached, customers without an approved NEM Reservation will be placed in the NEM Successor program. 

NEM Reservation FAQs

1. When can I apply for a NEM Reservation? 
        When you have signed a contract to purchase or lease a solar PV system and expect to have it installed and approved for interconnection within 6 months of the approval date of your application.

2. Who can fill out the NEM Reservation application
        The solar contractor may initiate the application and save it for the customer to complete. The customer will be required to upload a copy of the purchase or lease contract and agree to the terms and conditions before submitting.

3. How long is the NEM Reservation period? 
        The NEM Reservation period begins on the date that CPAU approves the NEM Reservation application and expires in 6 months. 

4. What is the NEM Reservation approval process?
        CPAU will notify the applicant of the NEM Reservation status within 10 business days by email. CPAU will send a Net Energy Metering and Interconnection Agreement for the solar PV system capacity approved in the NEM Reservation.

5. What is the PV interconnection approval process?
         In Palo Alto, the Building Inspector issues interconnection approval (also known as “permission to operate”) of the PV system at the final inspection. Please note that the City of Palo Alto Utilities electric meter inspection must be scheduled PRIOR to the final building inspection.

6. What are the permit requirements? 
       See or contact Palo Alto Development Services at 650-329-2496.

7. What if my system doesn’t pass final inspection before my NEM Reservation expires?  
        You must schedule the final inspection prior to the NEM Reservation expiration date. If the Palo Alto Building Inspector requires corrections, CPAU will offer a NEM Reservation extension of up to 10 business days to make the required corrections to your system and pass the final inspection. Applicants are encouraged to schedule the final inspection at least 2 weeks before the NEM Reservation expiration date. If you are unable to complete the installation before the NEM Reservation expires, you may reapply after your NEM Reservation expiration date.

8. What if I want to change the amount of PV capacity for my approved NEM Reservation? 
        If you wish to change the PV system capacity, please submit a new NEM Reservation application for a modified confirmed Reservation and attach an updated purchase or lease contract showing the equipment change. If there is remaining capacity in the NEM program, your request will be reviewed and CPAU will send a notice of approval for the increased NEM Reservation. If the second NEM Reservation is denied due to a lack of available capacity in the NEM program, you may a) install the amount of capacity approved in the first NEM Reservation, b) join the waitlist to see if additional NEM capacity is made available from cancellations, or c) install the larger PV system and be placed on the NEM Successor rate.

9. What happens when the Reservation list closes? 
        CPAU will open a waitlist and if any NEM program capacity is released, CPAU will notify the applicants on the waitlist on a first-come, first served basis.

10. What happens if I am placed on the waitlist and decide to install my PV system before getting notified that there is NEM capacity available for my project? 
        Customers who are on the waitlist may proceed with their PV installation and will be placed on the NEM Successor rate. If they are moved off the waitlist, CPAU shall change out the meter and place them on NEM. Please note that it may take up to six months to place all customers moved off the waitlist onto the NEM rate. The start of the 20 year NEM grandfathering term will begin on the date the customer is placed on NEM rate.

11. What if I want to add capacity to my existing PV system that is currently on NEM? 
        Existing solar customers on Net Energy metering will be able to expand their systems by any amount, and CPAU shall adjust the amount of time the customer is allowed to remain on NEM.   The adjustment will be based on the ratio of the expanded and original system sizes, according to the following formula: New Remaining NEM Term = Original system’s remaining NEM term X (Original system size in kW / New system size in kW). Customers wishing to make expansions to their existing PV system may elect to apply for a NEM Reservation. See FAQ #1.
Last Updated: Aug 9, 2017