From VNEM to VNBT: What California’s Solar Transition Means for Developers?

[Radwan]

The CPUC's transition from Virtual Net Energy Metering (VNEM) to the Virtual Net Billing Tariff (VNBT) officially took effect on Feb 15, 2024, marking a major policy shift in how exported solar energy is valued.

Here's what fellow developers, EPCs, and policy watchers need to know:

From VNEM to VNBT: What Changed?​

VNEM allowed a single solar system to allocate credits across multi-tenant properties (e.g., apartments, low-income housing), making solar accessible to renters.
Under Decision 23-11-068, VNBT replaces retail crediting with value-based compensation using the Avoided Cost Calculator (ACC). The result? Exported energy is now compensated at significantly lower rates, especially during non-peak hours.

Industry Impact Snapshot (2023–2024)​

• 80% decline in rooftop solar installations
• Over 17,000 solar jobs lost
• Interconnection applications dropped by 66–83% (depending on utility)
• Developers shifting toward battery storage to navigate tariff changes

LADWP VNEM Pilot – Still Open​

If you're working in LA:
LADWP continues offering a VNEM pilot for multifamily projects. Key terms:

• 40% of solar energy benefit must go to tenants
• LADWP buys all output at fixed rates:

• 14.5¢/kWh for 30–500 kW
• 14.0¢/kWh for 500 kW–3 MW

• Total pilot cap: 5 MW (274.7 kW active as of July 2023)
• Required docs: VNEM app, PPA, interconnection form, energy profile

Equity Lens: SOMAH & MASH Still Active​

Although VNEM is phasing out, California’s SOMAH and MASH programs remain in place, continuing to support solar access for low-income and disadvantaged communities.

Useful References:​

• CPUC VNEM Page
• CPUC Decision 23-11-068 (PDF)
• CPUC VNBT Fact Sheet
• PV Mag coverage of the 80% drop

Have you had success (or trouble) applying under LADWP’s VNEM? Are your customers adjusting to VNBT? Let’s share updates, strategies, and questions below.