California’s Net Metering 3.0 – What You Should Know About New Net Energy Metering Policy and Why You Should Switch to Solar Now

By January 12, 2022 July 6th, 2022 Solar Articles, Solar Education

Net Metering 3.0 in California

California’s new Net Energy Metering 3.0 regulations are expected to take effect within 6 months of a final California Public Utilities Commission decision that is expected to take place in approximately 2-3 months.  The new policy will take some of the current policy’s solar benefits away from homeowners and business (commercial) owners. But don’t worry! Homeowners and business owners that go solar and are able to get their interconnection agreement signed before the new policy implementation takes place, will be “grandfathered in” to the current policy and will be protected from any other new rulings for the next 15-20 years. 

How Does Net Metering Work?

Simply stated, solar net metering is the difference between what your solar system produces and what you use over a year’s time. If you use more power in a year than your system generates in a year, you pay a “true-up” charge. If you use less, then the utility provider may pay you a small nominal fee per kW hour underused. 

California's Current Net Energy Metering Policy

California’s current Net Energy Metering 2.0 policy incentivizes homeowners to go solar through the use of a crediting system. Basically, homeowners pay a one-time interconnection fee and then can earn credits for excess energy that they generate.

The generated excess energy, i.e., energy not used in the home, goes to the grid. Those credits offset the cost of the energy that the customer gets from the grid and lower or even eliminate the electric bill. 

Net Metering Explained

What Is Changing in Net Energy Metering 3.0?

One of Net Energy Metering 3.0 major changes is a significant reduction in credit value for exported energy. Under the current policy, NEM 2.0, homeowners are credited at the retail rate per unit of energy excess production and are able to roll over credits for up to a year. However, under NEM 3.0, homeowners can expect to be credited at a much lower rate and their credit balance will reset at the end of each month.

That being said, you would no longer be able to “save up” credits month to month and choose to be paid out in cash at the end of the year as you can under the current NEM 2.0 regulations. 

Finally, NEM 3.0 could make solar customers pay a monthly “grid benefits charge.” It is expected to be about $8 per kW each month for residential solar systems and $13 per kW for commercial solar systems.

What does that mean for an average residential or commercial solar system?

Say, for example you had a 10kW system size. That would mean you’d need to pay $80 per month under NEM 3.0.

Say, for example you had a 1MW (1,000kW) commercial solar system. That would mean you’d need to pay $13,000 monthly under NEM 3.0.

Why Is NEM 2.0 to NEM 3.0 Transition Happening?

Simple answer – net metering is great for homeowners, but utilities hate it. Net metering has helped thousands of California homeowners get more value out of their solar systems and take control of their energy. That is why the utilities are now trying to change net metering to make it less advantageous for homeowners and slow down solar adoption in California. 

Is Going Solar Still Beneficial in California?

Absolutely, yes. But homeowners have to act now and get their panels installed. An Interconnection Application needs to be submitted prior to the NEM 3.0 implementation – which is expected to take place in 2-6 months! Now might be the best time to jump on solar train and get the maximum benefits out of your solar system and be protected from NEM 3.0 for the next 15-20 years.

However, even under NEM 3.0, homeowners will still save money and get benefits with going solar (ex., 26% Tax Credit & more – read more about benefits of going solar in California).

Solar panels

Get Your Free Solar Quote Today

Don’t regret missing out on the value of NEM 2.0, go solar now! Soleeva Energy will help you with all your questions regarding going solar and Net Metering. We also offer $0 down and 0% APR financing options – don’t wait, give us a call at 833-820-8080 or fill out the form below. 

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