On December 15, 2022, The California Public Utilities Commission (CPUC) unanimously voted to pass the new Net Energy Metering (NEM) 3.0 policy. The decision will significantly impact net billing rates for solar and reduce the monthly savings that customers will receive from their investment.
Keep reading for more details about NEM 3.0, how it will affect residential solar moving forward, and what you can do now to reduce the impact.
What is NEM 3.0?
NEM 3.0 is an amendment that was first proposed by the CPUC in late 2020. According to the CPUC, the goal is to generate revenue for public service programs in the state of California.
Under NEM 3.0, the benefits of current Time-of-Use (TOU) rates would be diminished and payments for excess solar sent back to the grid would be reduced by 75%. However, NEM 3.0 is not retroactive, meaning that customers who have already gone solar will be grandfathered into the previous NEM 1.0 and NEM 2.0 rules.
How will NEM 3.0 affect me?
For new customers of solar energy in California, NEM 3.0 will reduce the amount of savings you receive and extend the solar payback period significantly. The most significant change is that the value of energy exports will drop from approximately $0.30 per KWH to around $0.08 per KWH. This means a 75% reduction in the value of energy exported back to the grid.
If you are currently a homeowner in California considering solar energy, here are some key things you need to know:
- NEM 3.0 will reduce the value of electricity you send back to the grid and eat into the total savings you receive from solar.
- Under NEM 3.0, there will be a required “Mandatory Residential rate” of $14 monthly fixed charge for SCE. $15.00 for PG&E and $16.00 SDG&E
- Using battery storage to store your excess energy will become even more beneficial
- NEM 3.0 is not retroactive. Current solar customers will be grandfathered into NEM 1.0 or NEM 2.0 for 20 years after the original PTO date.
- New solar customers can still receive the benefits of NEM 2.0 if they submit their interconnection application before April 13, 2023.
- Additional “solar taxes” that were included in early versions of the bill are now off the table.
What can I do right now?
There is some good news for homeowners interested in going solar. NEM 3.0 will not take effect until April 14, 2023. This means that you can still receive the benefits of NEM 2.0 if you submit your interconnection paperwork before the deadline.
According to CALSSA, your completed interconnection application should include the following elements:
- Signed contract from your installer
- Single Line Diagram (SLD)
- Contractors State License Board disclosure (CSLB)
- Consumer protection guide
- Oversizing attestation (if applicable)
Start The Transition Today
The new NEM 3.0 ruling will certainly have an effect on interested homeowners and the solar industry as a whole. However, you can still maximize your savings and receive the more favorable benefits of NEM 2.0 by acting now.
Contact Solar Optimum today to get the ball rolling and finalize your interconnection paperwork before the April 13 deadline. Our Energy Coordinators are standing and ready to answer any questions or concerns you may have. Give us a call at (800) 552-9970 or submit your request online and we will be in touch shortly.
