Following years of policy skirmishes, revisions, and a mad dash to grandfather systems into the previous net metering plan, a new solar billing structure — known as NEM 3.0 — is in effect for California’s three investor-owned utilities.
NEM 3.0 features a 75% reduction in export rates (the value of excess electricity pushed onto the grid by solar systems), thereby reducing the overall savings and increasing the payback period of home solar. This new policy was designed, in part, to encourage homeowners to pair battery storage with their solar panels to become more self-sufficient and contribute to a more resilient electricity grid.
While NEM 3.0 is undoubtedly less favorable to solar-only customers than previous net metering policies, it’s important to note that NEM 3.0 solar systems in California will still largely provide greater energy cost savings than in any other state, especially when paired with home battery storage.
NEM 3.0 key takeaways:
- Solar systems placed in service prior to April 15, 2023 will remain under their existing net metering policy for 20 years from their interconnection date
- Solar systems under NEM 3.0 billing will earn, on average, 75% less for the excess electricity they push onto the grid
- Under NEM 3.0, the payback period for solar and battery storage systems will be roughly equal to the payback period of solar-only systems
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