NEM 3.0 in California

Background:

On December 15, 2022, the California Public Utilities Commission (CPUC) approved updates to the state’s customer-owned solar energy generation program.

Links to information on NEM:

https://www.goeverbright.com/blog/impact-of-california-nem-3.0

https://www.cpuc.ca.gov/NEM/

What is net energy metering (NEM), and what is NEM 3.0?  

• Net energy metering (NEM) is a billing structure designed to provide incentives to utility customers who produce their own solar energy. These customers earn bill credits for the excess solar energy they produce and send to the grid.  

• NEM 3.0 is California’s transition from traditional net metering rates to a net billing structure (NBT). 

Why is this important?

• Under the previous NEM 2.0 policy, export credits were a one-to-one offset, so the price of a kWh of electricity produced from solar was equal to the price per kWh pulled from the grid. 

• Under NEM 3.0, the value of excess electricity that solar customers send to the grid is expected to drop considerably, which will likely extend the average payback period of a grid-tied-only residential system in California.  

  • California’s three investor-owned utility companies (PG&E, SCE, and SDG&E) will offer their own rate plans under NEM 3.0, with increased monthly fixed charges and reduced payments for excess solar energy

How can customers still save money by going solar?

• Grandfathering into NEM 2.0

  • Customers can receive NEM 2.0 for 20 years if they sign a contract with Everbright and have a complete interconnection application filed with their utility on or before April 13th, 2023. Additionally, the system must be fully installed within 3 years.

• System oversizing

  • A NEM 3.0 customer can install a system that will produce up to 150% of their previous 12-months’ energy usage as long as they attest they will increase their usage up to that amount in the next 12 months; for example, by converting natural gas appliances to electric or purchasing an EV they will charge at home.

• Battery storage

  • Adding battery storage to a solar system will allow the customer to export solar when local energy demand is at its highest.  Solar and battery owners can be credited more for their electricity during peak hours

  • Self-Generation Incentive Program (SGIP) provides rebates for installing energy storage technology (batteries) at both households and non-residential facilities.

    • All proposals in EverBright automatically include existing federal tax credits, but in California, having the CPUC's own Self Generation Incentive Program (SGIP) on the proposal will show the customer the additional rebates available for battery storage.  

    • SGIP Fact Sheet - https://www.cpuc.ca.gov/-/media/cpuc-website/files/uploadedfiles/cpucwebsite/content/news_room/newsupdates/2020/sgip-factsheet-124020.pdf

• ACC Plus incentive

  • PG&E and SCE residential customers who sign up for NEM 3.0 will have access to a new incentive called the ACC Plus, which adds a little value to each kWh of exported solar energy

Information Table