The California Public Utilities Commission (CPUC) has made a crucial decision, voting unanimously to revise the state's solar energy programs and create a new net billing successor tariff. This affects the Virtual Net Energy Metering (VNEM) and Net Energy Metering Aggregation (NEMA) programs. Here's what this means for shared real estate owners:
What's Changing?
- Reduced Compensation for Exported Solar Energy: The CPUC's decision reduces the value of export solar energy for customers, particularly for multi-tenant housing, businesses, and farms by lowering the compensation for excess solar power sent back to the grid.
- Timeline for New Projects: These changes will start impacting new solar projects with major utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric) in February 2024.
Ivy Energy’s Achievement in the CPUC Proceedings
Together with other stakeholders, Ivy Energy has played a pivotal role in influencing the CPUC NEM 3.0 proceedings. The CPUC revised its initial proposal to allow residential customers to receive full credit for the solar power they use directly (netting), rather than treating all solar power as exported. This is a significant win for multifamily property owners and renters, keeping solar investments more financially attractive.
Understanding the VNEM Successor Tariff
- Netting at Unit Level for Residential Meters: Under the new VNEM net billing tariff, solar generation can now offset individual utility bills in multifamily buildings. This is great news as it makes investing in solar more appealing for residential properties.
- Commercial Meters Exclusion: Unfortunately, commercial meters (like those in shared common areas of buildings) are excluded from this benefit, which might lessen the incentives for installing solar in these areas. While this is one of the negative results of the new tariff, solar contractors are exploring different options to optimize projects for mixed-use buildings.
- Grandfathering Period: There’s a crucial 90-day period that has begun when the decision was adopted, during which new and existing projects can secure VNEM 2.0 rates if they get their applications submitted within the 90-day grandfathering period.
- Application Time Limits: From the submission of your interconnection application, there’s a three-year limit to get the final building permit to maintain eligibility.
The Strategic Advantage of Grandfathering
With the new successor tariff coming into effect, it’s vital to consider grandfathering your existing or planned solar projects under the current, more favorable VNEM 2.0 tariff. This allows you to lock in the existing rates and conditions before the changes take place.
How to Grandfather Your Solar Projects:
To qualify for VNEM 2.0 and be locked in for 9 years, you need:
- 1. An Engineering Single Line Diagram and Site Plan.
- 2. An interconnection application with a contractor license.
- 3. A dry utility package and building service gear engineering.
- 4. To complete the project within three years from the application date.
Understand the Deadline:
Sunset Date: February 14, 2024 (90 days from vote on PD)
Legacy Period: Nine years for all projects submitted successfully between April 15, 2023 and the sunset date (February 14, 2024). After nine years, solar allocated to residential meters will continue to be netted, while solar allocated to nonresidential meters will be compensated at ACC export rate.
Evaluate Your Solar Projects: Look at your properties or upcoming projects and determine which ones could benefit from grandfathering VNEM 2.0.
Submit Your Interconnection Applications: Make sure your applications are complete and submitted before the deadline to qualify for grandfathering.
Prevailing Wage Grandfathering Scenarios
- NEM 2.0 for 9 Years Without Prevailing Wage: Grandfather projects between November 16th, 2023, and December 31st, 2023.
- NEM 2.0 for 9 Years With Prevailing Wage: Grandfather projects between January 1st, 2024, and February 15, 2024.
- NEM 3.0 for 20 Years With Prevailing Wage: This applies to projects submitted after February 15, 2024.
The CPUC’s decision is a significant change for shared real estate owners in California. While it introduces new challenges, understanding and utilizing the opportunity to grandfather projects under VNEM 2.0 is essential. At Ivy Energy, We recognize that the interconnection application process might seem intricate. That's why our team, backed by a strong network of partners, is prepared to guide you through each step, ensuring accuracy and timeliness in all documentation. Trust Ivy to be your advocate and partner during this pivotal time. Please reach out to our team, and let's discuss how we can assist you in starting the grandfathering process to secure the VNEM 2.0 tariff.
Pioneering the Future of Multi-Tenant Solar Energy Management
2024 was a trailblazing year for Ivy Energy, where we shattered barriers, redefined possibilities, and delivered innovative solutions to address the multi-tenant solar split incentive challenge. By driving product advancements, forging impactful partnerships, and scaling operational processes, we empowered multi-tenant properties to embrace clean energy with confidence.
A Year of Growth and Market Expansion
Ivy has grown its active project pipeline 450% compared to 2023, with a line of sight to clear +600% in active projects by the end of the year. Our tech-enabled solutions empower more communities than ever. With $18M in Series A funding (Read more) and the strategic acquisition of Glow Energy (Read more), we are poised for unprecedented growth and impact. This investment enables us to enhance our technology, streamline operations, and expand our reach into new markets nationwide.
Entering new markets with increased resources allows us to address diverse energy challenges and deliver tailored solutions to property owners and tenants. Additionally, the launch of our consulting arm provides expert guidance for our clients and partners to save money and enhance ROI while navigating intricate solar investments.
Meaningful Operational Updates
At Ivy, innovation isn’t just about technology—it’s about creating digital tools that empower our clients and their tenants:
- PropTech Integrations: Partnered with RealPage, Entrata, and Yardi to automate rent roll syncing, move-in/move-out updates, and direct charge posting to resident ledgers. These integrations reduce monthly processing time by up to 2 hours per property while enhancing data accuracy and operational efficiency.
- NEM Credit Delay Optimization: The Utility Coordination team adopted the CPUC informal complaint process to reduce delays in NEM activation after PV solar system commissioning. This improvement cut the average resolution time for delayed NEM credits from 123 days in 2023 to 49 days in 2024, allowing property owners to see Net Operating Income over two months sooner on average.
Platform Advancements that Lead the Industry
Our engineering team broke new ground, ensuring our platform stays ahead of the curve:
- Migrated to a new infrastructure processing system for faster processing and further automation improvements across operational features.
- Introduced IvyDual in response to regulatory requirements in California, which allows us to enter new markets where consolidated billing is not viable.
- Achieved SOC 2 Compliance, reaffirming our commitment to data security. (Read more)
- Built initial public API for Conservice integration and new utility data access pathways, strengthening our platform’s versatility and reliability.
Empowering Positive Experiences with CX
At Ivy Energy, our customers rely on us as true partners in their clean energy journey, helping them achieve long-term NOI growth while providing exceptional support for property owners and tenants. We consistently deliver this experience by simplifying complex utility processes and offering our white-glove service that ensures our clients feel supported, informed, and empowered to succeed. This year, Ivy’s Customer Experience Team launched two significant platforms:
- Ivy Implementation Portal: A step-by-step, transparent portal that simplifies solar implementation for our clients and partners across multiple organizations. (Watch a walkthrough of the new portal here.)
- Resident Help Center: Educate tenants about the solar program with helpful resources and offer direct support online or by phone. (Explore the Help Center)
Shaping the Future Through Thought Leadership
In 2024, Ivy Energy reinforced its position as an industry leader; our Virtual Grid 3.0 impressed the judges and earned first place in Solar Power World’s “Best in Show” award for large-scale solar innovation. (Read more)
Leadership team members Alex Dogan, Tanya Kuhn, and Sean Nam were celebrated in San Diego Business Journal’s Leaders of Influence in Technology 2024 for their contributions to advancing sustainable energy. (Read more) Ivy was also featured in Alt Energy Magazine (Read more), San Diego Business Journal (Read more), and on Solar Academy. (Read more)
Logan Carter showcased Ivy’s groundbreaking innovations in a main stage speech at Cretech NY (Watch here), an engaging appearance on the IMN Podcast (Listen here), and a deep-dive interview with Chris Moreno, also known as “Mr. PropTech.” (Watch here) Ivy’s policy team further expanded its influence by authoring a Model VNEM Whitepaper, a critical guide to enabling multi-tenant solar models nationwide. (Read the Whitepaper).
Measurable Environmental Impact
This year, Ivy Energy amplified its environmental contributions, with contracted units in implementation set to offset an astounding 109 million pounds of CO2. Meanwhile, active units have already offset 9 million pounds of CO2, demonstrating our ongoing dedication to reducing carbon emissions.
Looking Ahead to 2025
As we celebrate 2024’s successes, we are always looking to the future. In 2025, we’ll continue to push boundaries, deliver innovations that empower our clients, improve tenant experiences, and lead the multi-tenant housing sector toward a sustainable future.
A Message from Dover Janis, CEO of Ivy Energy
“2024 was a year of progress and adaptation. While utility-caused delays challenged our growing pipeline, our focus on agile problem-solving reduced their impact and kept the market moving forward. This is a testament not only to the dedication and focus of our team but also to the strong macro-level foundation that the onsite energy business model provides for real estate owners, even in the face of monopoly-driven resistance. With a large and expanding customer base and hundreds of projects, we have continued to validate the transformative potential of clean energy solutions for shared communities. I’m incredibly proud of our team—now among the most mature, knowledgeable, and experienced in the industry—as we trail blaze the path forward. The market is primed to grow and drive transformative change in local communities. I’m deeply grateful to our partners and customers, whom we have the privilege of serving every day as we continue to lead the way.”
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