The new net energy metering (NEM) policies have officially gone into effect in California as of April 13, 2023. Known as NEM 3.0, these new policies bring substantial changes to net metering incentives for solar owners throughout the state. We’ve broken down exactly what these changes are and will go over tips for how you can adapt to them.
Whether you already have solar or are wondering if it’s still a smart choice for your Monterey Bay home, Premo Solar can guide you through solar incentives to make sure you’re maximizing your savings on solar.
What’s Changed With NEM 3.0
California has the largest solar market in the United States, supplying more than 20% of the state’s electricity. Much of solar’s success has been attributed to long-standing incentives like net metering, which will be changing with NEM 3.0.
Here’s what’s different with NEM 2.0 vs NEM 3.0 in California.
Lower Export Rates
One of the biggest net metering 3.0 changes is the decrease in rates for solar owners sending electricity back to the grid. Each utility company will have a new retail structure that includes an increased monthly fixed charge and the California Solar & Storage Association (CALSSA) estimates that the value of exports will be reduced by 75%.
NEM 2.0 worked like most traditional net metering policies where solar owners would receive a one-to-one credit for the amount of electricity they export to the grid, regardless of the time of day or year. With NEM 3.0, solar owners must sign up for a Time of Use (TOU) rate plan where exported electricity will be worth more during peak consumption times, which is usually in the evenings or during the summer.
Battery + Net Metering
Solar plus battery storage will have a crucial role in helping solar owners maximize their savings with the NEM 3.0 policy. The new net metering rate structure pays more for electricity sent to the grid in the evening, when the panels aren’t generating electricity but consumption is at its highest. Having the ability to store electricity in a solar battery until it’s more valuable will decrease your solar payback period and help with adapting to the lower net metering rates. Solar batteries also have a variety of other benefits, including:
- Blackout protection
- Higher real estate value
- Electricity bill savings
Policies Staying the Same With NEM 3.0
While the NEM 3.0 update seems scary, solar incentives aren’t going away completely. Here’s what’s staying the same:
No Changes in Solar Taxes
Before NEM 3.0 details were released it was anticipated that additional fees would be added to the cost of solar. This series of fees was known as solar taxes and would have ended up costing the average solar owner an additional $60 a month in utility costs. Fortunately, the solar taxes were not included in the final tariff and are not present with NEM 3.0.
Net Metering Isn’t Going Away
Even though the rates have decreased, net metering is still happening in California. Solar owners will still be paid for electricity sent to the grid and with battery storage, they can send it when the demand is highest.
Why Solar Is Still Worth It in California
Solar is still beneficial to California homeowners despite the policy changes of NEM 3.0. Electricity costs are rising, and although net metering incentives are decreasing, they aren’t going away. Residential and commercial solar energy provides several advantages, like:
- Reduced electricity costs
- Energy independence
- Sustainable, clean energy
- 30% Inflation Reduction Act solar tax credit
As a trusted name in Monterey Bay since 1983, Premo Solar can help you navigate through the transition from NEM 2.0 to NEM 3.0. Whether you’re looking to install solar for the first time or want to add battery storage to your system, we’re here for you.