In late 2022, The California Public Utilities Commission (CPUC) passed the long-awaited NEM 3.0 bill. The new bill will create several major changes to California’s net metering policy and will be a big departure from the previous NEM 2.0.
As a homeowner interested in solar, you might be wondering what the biggest changes are and how they will affect you. In this article, we will outline the biggest differences of NEM 2.0 vs. NEM 3.0 to help you understand the new net metering rules in California.
Key Differences of NEM 2.0 vs. NEM 3.0
NEM 3.0 will make several notable changes to California’s net metering policy and the benefits it brings to homeowners. Some of the most important differences between NEM 2.0 v.s NEM 3.0 include:
- The value of export rates
- Instantaneous netting
- Removal of the grid participation charge
Keep reading to learn more about how these changes will affect you and your decision to go solar.
1. The Value of Export Rates
NEM 3.0 will reduce the value of net metering credits and extend the solar payback period for customers who generate electricity with their renewable energy sources. This means it will take longer for homeowners to receive a positive return on their investment in solar energy.
With NEM 2.0, customers received a full retail rate for any excess electricity they exported to the grid. This allowed them to pay off their solar system more quickly.
Under the new NEM 3.0 rules, export rates are being reduced by about 75%. This means you will receive less money for the energy you sell back to your utility company, making it harder to pay off your system.
2. Instantaneous Netting
Under NEM 2.0, electricity rates were calculated every hour based on a user’s net generation and usage during that hour. This is considered to be more favorable toward solar customers since peak hours of consumption (Such as night) can be offset by higher levels of production during the day.
NEM 3.0 will enact instantaneous netting (or rapid cycling), allowing meters to communicate in real-time instead of hourly. Instantaneous net metering will benefit customers less and be more complex to calculate.
3. Grid Participation Charge
NEM 3.0 will introduce a “Mandatory Grid Participation Charge,” which requires all participants to pay a fee for using the network’s resources and services. Solar customers can expect to pay an extra $8 charge per kilowatt (kW) of solar power capacity. This means the average homeowner will have to pay an additional $48 per month, further reducing the amount of savings received from solar energy.
Get NEM 2.0 Before It’s Too Late
California’s NEM 3.0 is bringing sweeping changes to the state’s net metering policy. When comparing NEM 2.0 vs. NEM 3.0, it is clear that the current 2.0 rules are more beneficial to solar customers than the new policy that will be enacted in April 2023.
But there’s still time to secure the more favorable NEM 2.0 rates! The new policy will take effect on April 14, 2023, so act now to get their new system installed and approved before the April 13 deadline. Once installed, homeowners will be grandfathered into the current NEM 2.0 rules for 20 years after the installation date.
Contact Solar Optimum today to get the ball rolling in time to claim your savings. Or if you just want to learn more about the difference between NEM 2.0 and NEM 3.0, our Energy Consultants are available to answer your questions.