NEM 3.0:  Key Takeaways

As you may know, the California Public Utilities Commission is implementing a new policy called NEM 3.0 (Net Energy Metering). This new policy will change the way that homeowners with solar panels are compensated for the excess energy they produce.  Below are 5 important things to know about the upcoming changes.


1. Homeowners with solar panels will receive a significantly lower amount for excess energy sent back to the grid.

Under the current NEM 2.0 policy, homeowners with solar panels are credited at the retail rate for excess energy that they send back to the grid. This means that they receive the same amount for the excess energy as they would for the energy they purchase from their utility company.

However, under the upcoming NEM 3.0 policy, the credit for excess energy will be based on the wholesale rate, which is significantly lower than the retail rate. This represents a major reduction in the net metering value of solar electricity, as homeowners will receive less financial compensation for the excess energy they produce.


2. No new fees (solar taxes)

Under NEM 3.0, there will be no new charges or fees for homeowners with solar panels, also known as “solar taxes.” This means that homeowners will not be required to pay any additional fees on top of their regular energy bills when they generate and use solar energy.

This is a positive aspect of NEM 3.0, as it allows homeowners to continue using solar energy without incurring any additional costs.


3. Solar panels + battery storage will be more advantageous under NEM 3.0.

Combining solar panels with battery storage allows homeowners to store excess energy rather than sending it back to the grid. This means that they can use the stored energy to power their home during non-peak hours or during a power outage, rather than purchasing energy from the grid.

By using battery storage to maximize their use of solar energy, homeowners can offset the reduction in net metering value and potentially save even more on their energy bills under NEM 3.0. In other words, pairing solar panels with battery storage will be more beneficial under NEM 3.0 because it allows homeowners to get more value out of the solar energy they produce and reduces their reliance on the grid.

4.  You can still be grandfathered into NEM 2.0 for 20 years by submitting an interconnection application by April 1, 2023.

Solar customers who submit an interconnection application (the process of connecting a solar panel system to the grid) before April 13, 2023, will be grandfathered into NEM 2.0 for a period of 20 years. This means that they will continue to receive the higher retail rate credit for excess energy rather than the lower wholesale rate credit under NEM 3.0.

This is a limited-time opportunity for homeowners to maximize their savings.  If you are considering installing solar panels, it is important to act quickly and submit your interconnection application before the deadline to take advantage of this opportunity.


5. You can be grandfathered into NEM 2.0 and add battery storage later. 

If a customer who has been grandfathered into NEM 2.0 decides to add battery storage to their system at a later date, they will still be able to remain on NEM 2.0 and continue receiving the higher retail rate credit for excess energy. This allows homeowners to take advantage of the benefits of battery storage while still enjoying the financial incentives of NEM 2.0.

It is important to note that this grandfathering opportunity is only available to customers who submit their interconnection application before the April 13, 2023 deadline.


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