NEM 3.0 and Its Effect on California Solar Panel Users

NEM 3.0 is a new standard for calculating energy use in California, and it's bringing some big changes to the solar energy world. Net Energy Metering, or NEM, is the system by which solar panel users get paid when they produce energy and sell it back to the grid. NEM 3.0 is a new version of the NEM system, and it impacts future solar energy adopters beginning in April 2023. In this blog post, we want to give you everything you need to know about NEM 3.0, including how to save money if you are considering adopting solar energy. 

NEM 3.0 Basics

The California Public Utilities Commission (CPUC) has set the ground rules for NEM 3.0. This new system replaces the current NEM 2.0. NEM 3.0 was passed in order to incentivize solar panel users to install battery backups and store their excess energy for a rainy day (literally and figuratively). This storage option helps California reach its climate goals faster. Essentially, NEM 3.0 cuts the payback amount by about 75 percent for energy sold to the grid. 

If you are considering adopting solar energy, then NEM 3.0 is something you should know about. The lower costs affect the payback periods for solar systems, making them longer than they are currently on NEM 2.0.

Current Solar Panel Owners

NEM 3.0 is a new program that changes how solar panels are valued, and thus, how they are compensated. It affects homeowners by providing them with more incentive to invest in battery backups for their homes by offering less money for the power sold back to the grid. However, NEM 3.0 takes effect in the middle of April, and mostly for new solar panel consumers. If you currently have solar panels, you are grandfathered into the NEM 2.0 system for 20 years from the date of solar system installation. 

This means if you installed your solar panels in 2019, you continue to receive the same rate until December 2039. It is not 20 years from the implementation of NEM 3.0 in April of 2023. If you install solar panels in the future, they are subject to NEM 3.0 rules.

New Solar Panel Owners

If you are looking to purchase solar panels, you’re automatically entered into the NEM 3.0 system. However, save some money and get on the NEM 2.0 system if you submit a final interconnection application that includes a signed contract, a single-line diagram, and an attestation before April 13, 2023, when NEM 3.0 goes into place. Your system needs to be installed within 3 years in order to stay on NEM 2.0. 

NEM 3.0 is a new system for net energy metering for solar panel users and energy companies in the state of California. The system essentially incentivizes users to install battery backup systems in their homes by reducing the amount of money individuals receive for their excess energy. While the downside to NEM 3.0 is the reduction in payment and therefore longer payback periods, the benefit is that this shift to energy storage helps California reach its climate goals faster and more efficiently. 

If you are interested in solar panels for your home, contact our team at SolarRepair. We answer all your questions regarding solar energy and installation! 

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