Introducing NEM 3.0 - California's New Net Energy Metering Policy

Introducing NEM 3.0 - California's New Net Energy Metering Policy

Welcome to my website! I am David Moya, your Solar Pro, and I'm here to guide you through the recent changes in California's net energy metering policy, known as NEM 3.0. This policy, which went into effect on April 14, 2023, brings some significant changes for solar energy customers, but fear not, solar is still a very smart and worthwhile investment.

Net Energy Metering (NEM) is a program that allows businesses and homeowners to generate electricity with their own solar energy systems and send any excess power back to the grid for billing credits. These credits help offset nighttime electricity costs and reduce utility bills.

NEM 3.0 is the latest iteration of this program and makes some adjustments to how customers benefit from it. Unlike the previous versions, NEM 3.0 reduces the value of the bill credits for excess solar power exported during the day. As a result, the financial incentive to go solar has slightly decreased.

However, there are ways to maximize your savings under NEM 3.0. The key is to install solar power and battery storage systems. With a battery storage system, you can store excess energy produced during the day and use it in the evening, reducing the need to buy expensive peak-rate electricity from the utility.

Benefits of Net Metering:

Before we delve into the specifics of NEM 3.0, let's remember some of the significant benefits of net metering:

1. Cost Savings: NEM allows customers with residential solar panels to receive bill credits for excess power they produce, helping them offset their electricity bills and save money.

2. Carryover Credits: Credits operate in annual cycles, carrying over monthly for 12 months. This allows customers to use credits from solar overproduction in sunny months to cover energy costs during nighttime and winter.

3. Efficiency and Reduced Energy Loss: Excess energy is sent back to the grid and benefits neighboring homes, reducing energy loss during long-distance transmission.

4. Reduction in Greenhouse Gases: Solar energy is cleaner, leading to a reduction in greenhouse gas emissions associated with traditional energy production.

Impact of NEM 3.0 on Homeowners:

Now, let's explore how NEM 3.0 specifically affects homeowners in California:

1. Rate Structure Changes: Under NEM 3.0, the value of solar exports is around 75% lower than in previous versions. Export rates are based on an "Avoided Cost Calculator," closer to wholesale rates for electricity.

2. Grandfathering: If you already have a solar panel system installed under NEM 1.0 or NEM 2.0, you'll be grandfathered into those programs for 20 years from the system's installation date, and the changes won't apply to you.

3. Monthly Fixed Charges: NEM 3.0 introduces a monthly fixed charge of about $4.50 for all customers in addition to existing fixed charges.

4. Credit Reductions: Customers under NEM 3.0 may see credit reductions for excess solar energy sent back to the grid, making it less financially appealing.

5. Solar Tax Elimination: Although there were concerns about new solar taxes, they did not make it into the NEM 3.0 policy.

6. Pairing Solar with Battery Storage: With lower export rates, pairing solar with battery storage becomes more beneficial. Battery storage enables you to store and use your excess solar energy, enhancing overall cost savings and reducing grid dependence.

Why Going Solar Still Makes Sense:

Despite the changes brought by NEM 3.0, going solar remains a wise decision for California residents. Solar systems will still provide greater energy cost savings compared to most other states. The return on investment might take a little longer, but it's still among the best investment options for home solar.

In fact, the policy's focus on battery storage emphasizes its value in combination with solar. Not only can you save on energy costs, but you'll also increase your home's value, reduce carbon emissions, contribute to a resilient grid, and have backup power during outages.

Conclusion:

California's NEM 3.0 may have slightly changed the dynamics of solar energy savings, but it's still a highly valuable investment. By adding battery storage to your solar system, you can maximize your savings and enjoy the numerous benefits of clean, renewable energy. So, don't wait! Take the first step towards your solar project today. Give me a call at (626) 469-7652, and together, we'll design and install a solar power and battery backup system that suits your needs and saves you money.