Let’s face it, living in New York is expensive. You’re probably tired of watching all of your bills increase year after year. But, you don’t have to sit around and watch it happen. You can take your electricity into your own hands and stop putting money in National Grid’s pocket by installing solar panels.
We know what you’re thinking - going solar isn’t cheap! Surprisingly, solar is probably the one thing that New Yorkers can get for cheaper than most people in the country. Between National Grid purchasing the excess solar energy you produce and the excellent state solar incentives available, National Grid customers can see thousands of dollars in utility bill savings.
We’ve laid out everything you need to know about going solar with National Grid so you can see if switching to solar is the right investment for you.
Going solar with National Grid at a glance:
- National Grid applies credits to your account for any excess solar energy sent from your panels to the grid that covers the full cost of future energy usage.
- National Grid solar customers must pay a Customer Benefit Charge of $0.88 per kilowatt of solar installed on their roof to help pay for social programs.
- Solar panels cannot eliminate all charges on an electricity bill, like the Customer Benefit or Service Charge, but they can greatly reduce how much you spend on energy.
- New York’s state solar tax credit and MW Block incentive program, combined with the federal tax credit, can cut the cost of installing solar by half.
- National Grid customers who install solar can get a short payback period of 8.5 years and enjoy over 15 years of free, clean energy.
Does National Grid buy excess solar energy?
National Grid does purchase excess solar energy from homeowners, which saves you even more money when you go solar. New York has uniform solar billing standards, called Phase One NEM, that all investor-owned utilities in the state, like National Grid, need to follow.
The energy produced by your solar panels will first be used by your home. When the panels produce more electricity than your home needs at the time, any excess is sent to the grid and applied to your account as a kilowatt-hour credit. That credit is applied to the energy you use later in the day when your solar panels aren’t producing electricity, completely covering the cost of electricity you use from the grid.
Here’s an example: your solar panels produced 20 excess kilowatt-hours over the course of the month. In that same month, your home used 35 kilowatt-hours from the grid. The excess energy generated by your solar panels will cover a portion of what you used from the grid, meaning you will only be charged for 15 kilowatt-hours of usage!
That’s the basic idea of how you’ll get billed by National Grid when you go solar. But, there are a few additional things you need to know about Phase One NEM and how they will impact your solar savings.
Customer Benefit Contribution charge
Part of New York’s Phase One NEM program is that solar customers must pay a monthly Customer Benefit Contribution (CBC) charge. This isn’t a new charge for solar customers - you’re already paying this charge right now as a National Grid customer, it’s just rolled into your electricity rate.
To make sure that solar customers still pay into Customer Benefit Contribution programs like energy efficiency and solar initiatives, the state requires that the charge be added to bills monthly.
The amount that you pay will depend on the size of your solar panel system and National Grid’s CBC charge rate. The current rate is equal to $0.88 per kilowatt (kW) of solar installed. So, if you install a 10 kW solar system, you’ll pay a CBC charge of $18 per month which cannot be offset by solar usage.
Term length and credit rollover
If your solar panels produced way more energy than your home used from the grid, you’ll have extra kilowatt-hour credits in your account. These credits will roll over and offset energy costs for the next billing cycle.
National Grid customers who install solar after January 1, 2022, are able to participate in the Phase One NEM program for 20 years. At the end of the 20-year term, any remaining kilowatt-hour credits will expire.
What is VDER? New York is transitioning to a new solar billing system called the Value of Distributed Energy Resources (VDER), or Value Stack, program. The program determines how much solar energy is worth via metrics like the wholesale price of electricity and the environmental benefits of going solar, among other things. Homeowners can currently participate in the VDER program; however, it can be hard to pinpoint what your solar savings will be because of how the Value Stack rate is calculated. However, VDER participants pay a lower CBC charge. Consult with your solar installer when deciding between VDER and Phase One NEM.
How much can solar save you on your National Grid bill?
Installing solar panels won’t eliminate your entire electricity bill because National Grid has some mandatory fees that solar energy can’t cover, such as the company’s Basic Service Charge and CBC charge. However, what solar can do is greatly reduce your electricity bill.
For example, let’s say your electricity bill was $150 before going solar, and you install a 10 kW solar system to help lower that bill. With the CBC and Basic Service Charge, you’ll still get a monthly bill of about $30, assuming the solar panels produce electricity to cover all of your energy charges.
So, while you still have to pay $30 to the utility company, that’s way less than the $150 you were paying before. In fact, it adds up to almost $30,000 in electricity bill savings over 20 years! You can use our state-of-the-art solar calculator to get an idea of how much solar panels can save you on your National Grid bill.
Does National Grid offer solar incentives or rebates?
National Grid does not have any incentives or rebates for its customers that go solar. But, the state of New York has some of the best solar incentives in the entire country.
The NY-Sun Megawatt Block Program is a huge incentive for those going solar. Right now, National Grid customers can earn $0.40 per watt of solar installed on their roofs. For a 10 kW system, that’s an incentive of $4,000!
New York also has a state solar tax credit that reduces how much you owe in state income taxes. The state tax credit is worth 25% of total installation costs, up to $5,000.
These state incentives can be combined with the 30% federal solar tax credit, which reduces a solar panel installation by thousands of dollars.
When you consider the NY-Sun Program, the state tax credit, and the federal tax credit, the price of a 10 kW solar installation goes from $30,000 to just $14,700.
Do National Grid customers need solar batteries?
Most homeowners in New York don’t need to install a battery with their solar panels. Batteries are very expensive, costing a minimum of $10,000, and they don’t provide any additional electricity bill savings thanks to Phase One NEM.
Some people may find adding battery storage helpful if they experience frequent power outages, as solar panels alone won’t keep your lights on when the grid is down. However, it’s up to you if the peace of mind of having a battery backup is worth the high price tag.
Should you go solar with National Grid in New York?
To put it simply, it’s definitely worth it for National Grid customers to switch to solar. The combination of Phase One NEM and the incredible state and federal incentives makes going solar an excellent investment in New York.
While you can’t get rid of your entire electricity bill, solar can still save you a substantial amount of money on your bills. Plus, all of the available incentives can potentially cut the cost of a solar installation in half! After 8.5 years, your solar panels will have saved you just as much as you spent on installing solar, giving you over 16 years of free electricity!
But, this might not always be the case. Phase One NEM is designed as a transition to the VDER program, meaning you might not get the same great savings that Phase One NEM provides. Not only that, but the NY-Sun MW Block incentive closes as soon as it reaches its cap, meaning it won’t be around forever. This means you’ll want to go solar sooner rather than later to lock in all of these great savings.
Jen Merithew
Written Content Manager
Catherine is the Written Content Manager at SolarReviews, where she has been at the forefront of researching and reporting on the solar industry since 2019.