Pacific Gas & Electric met it's 5%* (2409 MW) 'NEM Cap' on December. As a result, all new rooftop solar interconnects fall under the successor NEM2 program. Thanks to the efforts of a united front of distributed solar advocates, including Solar Sonoma County and CALSEIA, NEM2 preserves full retail rate for solar credits -- a very good thing! There are however some new costs associated with going solar at your home or business. Going solar is still the best thing you can do at your home to reduce greenhouse gases. And it *still* makes a lot of financial sense!
NEM is the program, established by the state regulators, that determines the compensation rate for solar energy that is generated by rooftop solar 'behind the meter'. It is defined as the 'net' of energy consumed from the grid, less energy produced by the panels.
Read about the NEM2.0 changes here
A more thorough treatment of the subject, including the definition of NEM -- or 'Net Energy Metering' -- can be found here
*5% of aggregate customer peak demand for the PG&E service area