How to Get Grandfathered in to NEM 2.0
NEM 2.0 (Current)
With California’s current (grid-tied) net metering protocol, known as NEM 2.0, solar customers receive a retail credit for excess energy produced by their solar panels which is transported back to the grid. This retail credit is used to offset the homeowner’s bill during times when solar production is insufficient (night-time and winter months) and customer’s draw energy from the grid (utility).
Net Energy Metering (NEM) 2023 – Transitioning to NEM 3.0
NEM 3.0 (Beginning April 14, 2023)
The California Public Utilities Commission has authorized (by law), the existing California utility companies to make adjustments to the current Net Energy Metering billing schedules via NEM 3.0. NEM 3.0 introduces several changes to the existing net metering program after April 14, 2023 that will dramatically impact a solar customer’s savings and value.
NEM 3.0 IMPACT
One of the major changes is the homeowner’s excess credits will be credited at much lower rates (not the retail value). The expected percentage drop in value for these credits is about 75% of retail rates. This means, that unless a customer can store more solar energy in a battery which they can then run off of at night, the average size system won’t likely be able to produce enough excess credits to provide the standard 100% net energy offset customers have come to expect. Systems will have to be designed larger than normal if a homeowner wishes to have 100% offset – and be without a nasty “True-Up Bill” (reconciliation of their net energy) at the end of each year.
Another ding into customer’s solar energy savings will come as another non-bypass-able energy surcharge in the form of a grid-access fee based upon the size of the customer’s system. This feels like just one more way for the utilities to “maintain a level playing field” and keep control of their power monopoly. The new protocols also limit the system size eligible for net metering, with a cap of 11 kilowatts for residential customers and 1 megawatt for non-residential customers. Remember, they are in the business of making money off of you and I, and not the other way around!
CONCLUSION
Overall, NEM 3.0 aims to more accurately reflect the value of solar energy produced by customers and its impact on the grid, while also ensuring that non-solar customers aren’t unfairly subsidizing solar customers. Regardless, we expect energy prices to climb and solar to continue to be an attractive way to combat this inevitability.
WHAT CAN YOU DO?
If you are a current homeowner on SDGE, SCE or PGE electricty, you literally only have weeks (not months) to get grandfathered in to the great NEM 2.0 program which will save you about 40-60% more than a solar system on the new NEM 3.0 schedule. Contact us for a free estimate and solar energy evaluation for your home or business today. Special incentives are available until March 31.