You may have heard of NEM 3.0 and might be wondering how that will ultimately affect you and your household. Below, Geneverse provides more information regarding NEM 3.0, discussing the advantages and disadvantages related to Net Energy Metering in the state of California.
On December 15, 2022, the CPUC voted unanimously, approving NEM 3.0 – also called the Solar Billing Plan. This new policy took effect as of April 15, 2023, following a grandfathering period of 120 days.
What is NEM 3.0 Exactly?
In short, NEM 3.0 ultimately reduces the export rate for residential solar electricity – by around 75% as a matter of fact. Monetarily speaking, the export rate will go from an average of 30 cents per kWh to 8 cents per kWh. Solar owners will experience an increased payback period as a result of lower export prices under NEM 3.0, which will ultimately result in decreased overall savings.
NEM stands for “Net Energy Metering”, and NEM 3.0 presents both challenges and opportunities for homeowners and those who take advantage of solar power.
When you hear “decrease the overall savings,” you’re probably not stoked about this sort of vernacular. That 75% reduction in export rates and the increased payback period regarding home solar is a way to encourage homeowners to pair their own battery storage with solar paneling, which results in increased self-sufficiency. In the end, this particular effort will result in a far more resilient electricity grid, which is key for the state of California.
Some Key Points Regarding NEM 3.0
NEM 3.0 will result in a reduction in the net metering value of solar electricity. However, there will be no new charges or fees (also commonly referred to as solar taxes). NEM 3.0 will also result in a beneficial pairing of solar with battery storage.
Those who submitted their interconnection applications before April 14th, 2023 are grandfathered into NEM 2.0 for 20 years. Those who are grandfathered into NEM 2.0 can add battery storage and remain on NEM 2.0.
Exported energy value will be compensated based on an hourly Avoided Cost Calculator (ACC), which are values that are averaged across days in a month, differentiated by weekdays and weekends. Residential customers will be locked in as far as ACC values are concerned for 9 years and float thereafter. After this lock-in period, export rates will be based on hourly ACC values from the most recently run ACC adopted as of January 1. Customers also have the choice to opt out of the lock-in period.
NEM 3.0 Advantages and Disadvantages
Homeowners face certain advantages and disadvantages under NEM 3.0. This program will likely result in increased energy independence per household, which is ultimately beneficial. Households can now enroll in Grid Services programs, gaining income from unused stored energy. Households will also gain emergency backup energy from storage systems.
Disadvantages include a more complicated process from a sales, design, and installation standpoint. There is a potential for logistic issues due to more components (batteries, transfer
switch, conduit, etc.), more distributors, and more manufacturers.
Remember that NEM 3.0 Incentivizes Storage
NEM 3.0 gives customers the ability to discharge energy from their batteries when export rates are higher, which provides an opportunity for maximizing return on investment. Inherently, when taken advantage of correctly, storing excess solar surplus energy on-site will maximize the value of your solar power while at the same time minimizing what you export to your utility company.
You can increase savings potential by pairing your solar panel system with a battery. Under NEM 3.0, payback periods for a solar-plus-storage installation are going to be faster than it would be for solar-only installations.
As NEM 3.0 gets underway, we’re sure you’re going to have questions about how to get the most out of your solar energy system. Geneverse is here to provide valuable information that will help you gain and maintain energy independence.
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About Geneverse: Geneverse is the most reliable source of emergency backup power for your home and community. From the HomePower ONE power station providing portable access to electricity, to the SolarPower ONE as a source for recharging, never be disconnected from what matters most to you. Choose the size of Solar Generator perfect for you and your family. Learn more about how Geneverse and its industry-leading 5-year limited warranty can bring protection and security to your family on our website. Never face a power outage alone with a backup battery generator and solar panel from Geneverse.