Solar and Your Utility Bill


Installing rooftop solar at your home lowers the electricity portion of your utility bill. You are compensated for electricity that you export to the grid. Net Energy Metering (NEM) policies set terms for this compensation. 

 solar diagram


To learn more about the terms on this diagram and the background and benefits of solar, visit our Background and Benefits page.


Solar rates in Palo Alto 


The rate at which you are compensated for the electricity you export depends on which NEM program you are served by. Solar customers served by the City of Palo Alto's (CPAU) original NEM program, also called NEM 1, are compensated at retail rates for electricity they export to the grid. Solar customers served by NEM 2 (effective after the City reached its NEM 1 cap at the end of 2017) are compensated at the Export Electricity Compensation (EEC-1) rate for exported electricity.


What is Net Energy Metering?


NEM is a means for utility customers to be compensated for renewable electricity they export to the grid. NEM was originally developed to encourage private investment in renewable energy resources, and NEM legislation requiring utilities to compensate customers for renewable electricity that they export to the grid is in place in 38 states. California passed NEM legislation in 1996 (SB 656). Visit our history of NEM page to learn more.


Click the buttons below to learn more about NEM in Palo Alto.



 net energy metering 1    net energy metering 2


 If you have rooftop solar that was installed before November 2016, or if you submitted a NEM 1 Reservation before January 1, 2018, you may be part of the NEM 1 program.



If your system was or will be installed after January 1, 2018, and you did not submit a NEM 1 Reservation before January 1, 2018, you may be part of the NEM 2 program.



 If you are not sure whether you are a NEM 1 or a NEM 2 customer, call us at (650) 329-2241 or email


 To view Frequently Asked Questions, visit our Solar FAQ page.