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Learn everything you need to know about how NEM 3.0 will affect your Solar options
What is NEM 3.0?
NEM 3.0 is the third version of California’s rooftop solar rules, also known as “Net Energy Metering.” It was adopted by the California Public Utilities Commission (CPUC) in late 2022 and will take effect on April 15, 2023, after a grandfathering-in period of several months.
How is NEM 3.0 different from previous versions?
Under NEM 3.0, solar users will receive 75% to 80% less credit rates from utility companies for the extra energy they share with the grid. The compensation for that extra energy will decrease from an average of $0.30/kWh to around $0.05/kWh. Additionally, NEM 3.0 solar users will be placed on a rate plan with higher evening electricity rates, which will extend the payback period for a solar investment from an average of six years to over 10 years.
I don’t have solar yet, but I want to get it before the new rules take effect. Can I do that?
Yes, if you have a signed contract with a solar provider and submit a complete and correct interconnection application to your utility by April 14th, 2023, your solar system will be put on the current program, NEM 2.0, for 20 years.
In an attempt to reduce demand on the grid during peak hours, NEM 3.0 strongly penalizes not adding battery storage to new and existing systems. Under NEM 3.0, homeowners should store power generated during the day and draw on it in the evening instead of the grid.
If I already have solar (NEM 1.0 or NEM 2.0), will the new rules (NEM3.0) affect me?
The new rules will not affect NEM 1.0 and NEM 2.0 solar users until their lock-in period expires, unless they add more panels. The lock-in period, also known as grandfathering, is 20 years after the utility turned on their solar system.
What happens if I already have solar and want to add more panels?
After NEM 3.0 takes effect, existing solar users who increase their system size by 10% or 1kW will be forced onto NEM 3.0. To avoid this, they may want to consider adding panels before NEM 3.0 goes into effect in mid-April. A correct and complete interconnection application must be submitted to the utility by April 14, 2023 for this to be possible.
Yes, existing solar users can add a battery at any time without affecting their lock-in status.
If my NEM 1.0 lock-in period is about to expire, how do I avoid getting put on NEM 3.0?
If your 20-year lock-in period is about to expire, the only way to avoid getting put on NEM 3.0 is to completely remove your current solar system and replace it with a new one. A complete and correct interconnection application must be submitted to the utility by April 14, 2023 for this to be possible.
What happens if I have solar and sell my home?
If you are a NEM 1.0 or NEM 2.0 customer and you sell your home, the new owner will take over the remainder of your lock-in period. However, under NEM 3.0, the lock-in period is shorter at nine years and is lost when a home is sold.
Will the CPUC’s decision affect community energy providers or municipal utilities?
The CPUC’s decision does affect community choice energy providers, but some may choose to give their customers a higher credit. The decision does not affect locally governed utilities.