The City of Palo Alto Utilities (CPAU) offers the NEM 2 program to all new rooftop solar customers. The NEM 2 program began on January 1, 2018 after the City reached its NEM 1 cap. If you signed up for NEM before that date, you may be part of the NEM 1 program.

How do I know if I am a NEM 2 customer?

If you currently have solar installed at your home and you are being served by CPAU’s NEM 2 program, you will see a line item labeled "EEC-1 Solar Export Credit" in the “ELECTRIC” section of your utility bill on page 2. The dollar value displayed in that line item is negative because it is a credit that CPAU subtracts from the total of your electric charges. If you are not sure whether you are a NEM 2 customer and would like to confirm, you can contact us by calling (650) 329-2241 or emailing

The EEC-1 rate compensates you as a NEM 2 customer for the value of your local energy, avoided capacity charges, ancillary service charges, avoided transmission and distribution system losses, and environmental attributes associated with the electricity you export to the grid. The EEC-1 rate is lower than retail rates in part because the electricity you export still travels through the utility's distribution system before being used at other sites, so some distribution costs are not included in the rate.

How NEM 2 works

NEM 2 rooftop solar systems require installation by CPAU of meters with two registers, called double-register meters. These double-register meters measure two quantities: export electricity and import electricity.

Any time electricity flows from the customer's property to the grid, the export register adds to its tally of export electricity.Any time electricity flows from the grid to the customer's property, the import register adds to its tally of import electricity. At the end of each billing cycle, a meter reader reads a value from each register and customers receive a credit for export electricity at the EEC-1 rate and pay for import electricity at retail rates.

What will my utility bill look like?

As a NEM 2 customer, your utility bill shows both the amount of electricity you export to the grid and the amount of electricity you import from the grid during that billing service period.

As a NEM 2 customer, you will see the amount of electricity you export (measured in kilowatt-hours, or kWh) labeled as "ELECTRIC - Export" in the "Service" column of the chart at the top of page 2 of your utility bill, and electricity you import will appear in the row labeled "ELECTRIC." On page 2 of your bill you can see credits associated with export electricity and charges associated with import electricity are listed in the “ELECTRIC” portion of your bill.

Sample Utility Bill - NEM 2 Customer

Get the most out of your rooftop solar system

As a NEM 2 customer, the best way to take advantage of your installed rooftop solar system is to use the electricity you generate while you generate it. In this way, you avoid paying retail rates for electricity imported from the grid. You can use the electricity you generate while you generate it by load-shifting your energy use to times of peak solar generation. You may also decide to install a battery system to store the electricity you generate for later use.

Load shifting: aligning electricity usage with peak solar generation hours

  • Run, or set a timer to run, energy-intensive electric appliances (high-efficiency electric heat pump water heater, dishwasher, washer/dryer, etc.) during peak solar generation hours.
  • Charge electric vehicles and electronics during peak solar generation hours.
  • Stagger your electricity consumption across peak solar generation hours by running one appliance at a time. This will help you use more of your solar electricity throughout the day and prevent having to import from the grid.


  • Improve your home’s efficiency before (and after) installing your rooftop solar system by getting efficiency advice from CPAU’s Home Efficiency Genie.
  • When retrofitting home energy systems and appliances, consider high-efficiency options with CPAU rebates or those certified by ENERGY STAR®.
  • Unplug your electronics when not in use. Many electronics and appliances draw power when plugged in, even when not in use.

System maintenance

  • Keep solar panels clean – rinse your solar panels every six months or so to ensure they are getting as much light as possible.

Energy storage

  • Evaluate the feasibility of a home energy storage system that can store electricity generated by your rooftop solar system.