For the last few years, California homeowners received an impressive incentive if they decided to install solar panels in their homes. Under the California Public Utilities Commission’s (CPUC) second iteration of net metering, or NEM 2.0, California residents that used solar energy received around $0.30 cents per kWh that they put back into the grid.
But recently, a new policy was voted into action that the CPUC refers to as NEM 3.0. Under the new policy, customers will now only be able to receive around $0.08 per kWh that is pushed back to the grid.
That’s bad news for solar customers. But the good news is that it’s not too late to take action. NEM 3.0 won’t go into effect until April 14, 2023. Homeowners have until April 13 to submit their interconnection paperwork and be grandfathered into NEM 2.0 for another 20 years.
NEM 3.0 Timeline
The new NEM 3.0 policy has been in the works since the summer of 2020. In August of that year, the CPUC decided to revise its current NEM policy. The entire process took about a year and a half to finalize and vote into law. Here is a look at some of the key points that happened during this time:
- Winter of 2021: The CPUC concludes its impact study and now has enough data about how net metering affects consumers and the grid. Also, some of the core principles of the new policy are finalized.
- Spring of 2021: The CPUC holds hearings to take input from various groups and organizations about what changes need to be made to the policy.
- Summer of 2021: There is one last hearing before the CPUC makes its final decision.
- Early Winter of 2022: CPUC decides to postpone its plan after the governor criticized the new plan and stated that more work needed to be done before it could be finalized.
- End of the year in 2022: The new NEM 3.0 policy is finally released and ready to be voted on.
- December 2022: The new policy was approved in a unanimous vote by the CPUC.
During deliberations, the CPUC had a hard time deciding on whether or not new existing customers would be able to keep the current benefits that NEM 2.0 offered. In the end, it was decided that California residents could grandfather into the NEM 2.0 policy if they fill out and submit the correct paperwork before the April 14 deadline.
NEM 3.0 Is Bad For Solar Customers
New and existing solar customers are understandably angry about this change in policy. Some of the most common reasons why customers are not happy about the new policy include:
- Reduced solar export rates: Instead of receiving around $0.20 per kWh, customers will now only receive $0.08. On average, the new rates will decrease by about 75%.
- Longer payback period: With the current incentive program, it only takes about six years before customers start to see a return on investment (ROI). With the new policy, it could take nine years or more before they receive enough payback from their solar system.
- Grid participation fee: Under the new NEM 3.0 policy, customers will now be charged around $8.00 per kWh each month according to the Grid Participation Plan implemented by CPUC.
It’s Not Too Late! Act Now to Beat NEM 3.0
Luckily, the NEM 2.0 policy is still available for new and existing solar customers. The CPUC has agreed to give new solar customers until April 13, 2023, to sign up for the existing NEM 2.0 program. You will need to complete and submit an application by this date in order to be eligible for the NEM 2.0 benefits. However, if your application is accepted by the deadline, you could be eligible for NEM 2.0 for the next 20 years.
Don’t Hesitate, Become a Solar Energy Customer Today
Solar customers in California benefit much more from the NEM 2.0 policy. If you would like to receive higher export rates, get a faster ROI, and eliminate high grid participation plans, you will need to act fast. Contact us today to start your solar energy application process.
