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What is the NEM 3.0 impact on California Homeowners?

Updated: Jul 21, 2023

Net Energy Metering (NEM) is a billing system that allows homeowners with solar panels to send excess energy back to the grid and receive credits for it. When your solar panels generate more electricity than you use, the excess electricity is sent back to the grid. The utility company then credits you for this electricity, which can be used to offset your electricity bill on days when your solar panels do not generate enough electricity.

NEM 3.0 is the third iteration of net metering in California. It was approved by the California Public Utilities Commission (CPUC) in 2022 and went into effect on April 1, 2023. NEM 3.0 makes some significant changes to the way net metering works, including:

  • A reduction in the value of exported solar energy: Under NEM 2.0, homeowners were paid the retail rate for any excess solar energy they exported to the grid. Under NEM 3.0, the value of exported solar energy will be reduced to a wholesale rate. This means that homeowners will receive less money for their excess solar energy.

  • A cap on the amount of solar energy that can be exported to the grid: Under NEM 2.0, there was no cap on the amount of solar energy that could be exported to the grid. Under NEM 3.0, there will be a cap of 1.1 times the average annual electricity consumption of the home. This means that homeowners with large solar systems may not be able to export all of their excess solar energy to the grid.

  • A requirement to purchase backup power: Under NEM 3.0, homeowners with solar panels will be required to purchase backup power in case of a power outage. This backup power can be in the form of a battery, a generator, or a combination of both.

The impact of NEM 3.0 on homeowners: The impact of NEM 3.0 on homeowners will vary depending on the size of their solar system and their electricity usage. Homeowners with small solar systems and low electricity usage may not see a significant impact from NEM 3.0. However, homeowners with large solar systems and high electricity usage may see a significant decrease in the amount of money they save on their electricity bills.

If you are considering installing solar panels, it is important to understand the impact of NEM 3.0. You should consult with us to get an estimate of how much money you can save on your electricity bills under NEM 3.0. You should also consider purchasing backup power if you are concerned about power outages or want to get the highest rate back from PG&E.

MOST IMPORTANT: Solar is still cheaper than renting your solar from PG&E.

We are here to explain all of this to you.

women reading electric bill next to electricity meters

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