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NEM 3.0 Will Bring Major Changes to Solar in California


Aerial view of new solar panels on a residential home in California.

If you currently have or are considering investing in solar panels, it’s critical to understand the latest Net Energy Metering (NEM) 3.0 proposal from the California Public Utilities Commission (CPUC).

Combined with a drastic bill credit reduction for customers who sell electricity back to the grid, this proposal significantly increased the payback time for a solar project. The NEM 3.0 proposal is expected to go into effect on April 15, 2023.

NEM 2.0 vs. NEM 3.0

Net Energy Metering started in 1996 with California Code SB 656. The original idea was to stimulate solar growth by incentivizing renewable energy installations with bill credits for selling energy back to the grid.

  NEM 2.0 NEM 3.0
Average per kWh bill credit $0.25–0.30 $0.05 – 80% reduction in credit value
Average savings per month for a 10kw system $204 $48–64 – 70% reduction in savings per month
Average return on investment Six years for residential projects At least nine years for residential projects

 

NEM 3.0 Could Remove the Economic Incentives of Residential Solar Installations

If passed, NEM 3.0 will:

  • Reduce net metering bill credits: NEM 3.0 would reduce the average $0.25–0.30 per kWh bill credit to about $0.05 per kWh, an 80% reduction.
  • Increasing payback period: With substantial monthly savings under NEM 2.0, current customers can expect to break even on their solar investment in as little as six years. New customers with identical systems operating under NEM 3.0 will take nine years to see a return on their investment.
  • Increase installation costs: Reducing the value of grid-exported energy forces solar-only systems to be built smaller to maximize onsite energy consumption. Unfortunately, this wipes out the cost-effectiveness of large-scale projects and leads to higher installation costs.

NEM 1.0 & 2.0 Grandfathering

Customers with a signed contract and a completed NEM application before the expected April 15, 2023, deadline will be grandfathered in under NEM 2.0 for 20 years.

What Can Non-Solar Customers Do Before NEM 3.0 Goes Into Effect?

Since passed on Dec. 15, 2022, NEM 3.0 will take effect on April 15, 2023. In other words, the time to go solar is now!

Battery storage will make the NEM 3.0 rates much more cost-effective for customers, so we encourage all new solar customers to add a battery to their solar system.

Contact TENCO SOLAR at 888-507-6937 today to start the process of adding solar to your home or business.

We can help grandfather you into NEM 2.0 to maximize the benefits of your solar panels for years to come.

our process

We Make Switching To Solar Simple
Consultation

Begin your switch to solar energy by starting with a TENCO SOLAR consultation. Our team will schedule a pre-site inspection to understand your needs and identify solutions helping you save on your energy expenses while reducing your carbon footprint. We make the process simple by completing permitting on your behalf.

Installation

Working around your schedule, our team will make a solar panel installation appointment that’s convenient for you. We will professionally install all the necessary equipment for setting your home or commercial business up with solar energy access in one day.

Activation

Our team will guide you through the new features and functions of your solar energy equipment in addition to setting you up through Net Energy Metering allowing you to sell your excess energy produced to the grid. We will provide you any service or maintenance solutions you need to enjoy solar connectivity for years to come.

our process

We Make Switching To Solar Simple
Consultation

Begin your switch to solar energy by starting with a TENCO SOLAR consultation. Our team will schedule a pre-site inspection to understand your needs and identify solutions helping you save on your energy expenses while reducing your carbon footprint. We make the process simple by completing permitting on your behalf.

Installation

Working around your schedule, our team will make a solar panel installation appointment that’s convenient for you. We will professionally install all the necessary equipment for setting your home or commercial business up with solar energy access in one day.

Activation

Our team will guide you through the new features and functions of your solar energy equipment in addition to setting you up through Net Energy Metering allowing you to sell your excess energy produced to the grid. We will provide you any service or maintenance solutions you need to enjoy solar connectivity for years to come.